Provincial Human Settlements Department on Municipalities Annual Performance Plans Day 1

Meeting report

The Chairperson said the provinces would be presenting their business plans and be interrogated. Gauteng province would be the first to present, and then Eastern Cape, Mpumalanga and Northern Cape.

Presentation: Gauteng Province

Mr N Changa, Assistant Deputy Director General, said the Department had now started at looking at how to turn around the situation because it had not done very well in the last quarter of the 2015/2016 financial year. It wanted to double its delivery programmes and improve from the last quarter.

There had been 40 344 targets for the 15/16 financial year, and only 24 708 had been delivered.  Mr P Mashatile, MEC for Human Settlements in Gauteng, had recognised that he had to make sure that the targets were achieved.  The integrated residential programme aimed to integrate and restructure states. The Department had a target of 12 317, but was able to deliver only 8 429. Even though they did not do well, they had accomplished some targets and delivered housing in some of the informal settlements.

The Department had received an allocation of R5.022 billion for the 2016/2017 financial year. It had been requested to focus on:

• Adherence to the medium term strategic framework (MTSF) targets and outputs;
• Key programmes  -- the Finance-Linked Individual Subsidy Programme (FLISP), social and rental housing, Upgrading of Informal Settlements (UISP), the Integrated Residential Development Programme (IRDP) and title deeds;
• Relevant protocols to be entered into with the Housing Development Agency (HDA) for the acquisition of land;
• The alignment of the Human Settlements Development Grant (HSDG) and Urban Settlements Development Grant (USDG) business plans.

For the 2016 – 2017 Business Plan, extensive engagements had been undertaken with the respective municipalities of Gauteng to ensure alignment primarily with the Integrated Development Plan’s (IDP’s) Municipal Infrastructure Grant (MIG) and USDG. The state of readiness of the projects had been scrutinised and had reached a satisfactory level for implementation. Projects that required the final appointment of contractors would be managed by Supply Chain Management, ensuring that all outstanding projects would be awarded contractors and valid contracts by the end of April 2016.

Additions from Tshwane Metropolitan Municipality

The most important aspect was how the metro was spending the USDG. This budget would be 100% spent. At the moment, they were sitting on 58% of budget. In terms of a recovery plan, the metro had had a session with the Gauteng province where they had assisted with implementing the total structures of the housing plan. Over 1 800 houses had been built, and they were working with the province to ensure that water was provided and houses were available for handover. In terms of HSDG targets, they would provide 1200 houses in Refilwe manor. In Zithobeni Extension 9, they were performing very well. They had implored all their contractors to work even weekends due to the rainy season that was fast approaching. In terms of the urban settlements grant, they were now at 58%, with the public transport grant at 60%. The neighborhood development partnership grant stood at 67.5%, but the metro was not doing very well and they needed to improve on this grant. The metro was doing quite well in terms of the national electrification programme, which was currently at 25%. The biggest issue was the use of borrowing, which complicated their spending as a city in terms of expenditure and approved budgets. There was a need to have synchronized planning at both the provincial and local government level. The city was always spending on the USDG, so it was appropriate that had been were awarded the Govan Mbeki award. They would utilize all the monies they received to provide houses for the people.

Additions from Ekurhuleni Metropolitan Municipality;

With regard to the HSDG, the Ekurhuleni municipality was accredited with five projects, with total units of 2 577. Contractors were building on sites. In the 2016/2017 financial year, the Metro would install services and toilets, as well as rehabilitate services that were dormant. Regarding the USDG, the city of Ekurhuleni had not performed and this was a source of concern with regard to finance. A total capital budget of R4.6 billion had been allocated, and the amount spent to date was R2 billion.

The Ekurhuleni metro had been allocated a total USDG of R2.3 billion, and to date it had spent only R1 billion. What they had done, in consultation with the MEC, was that projects currently in progress (amounting to R1 billion) would be completed, and what would not be spent at the end of the financial year for contractors (amounting to R192.4 million) would not be put aside. The metro had embarked on the land and buildings acquisition, amounting to R1 billion. Cumulatively speaking, the city had R306 million that might not be spent. It wanted to use this budget for hostel development because design for hostels in Ekurhuleni was not fit for purpose, and they wanted to address the issues in hostels.

In the 2016/2017 financial year, which would be commencing at the beginning of July, the city did not want to experience what they had in the previous financial year. It had 91.83% of the USDG allocated to human settlements, water and sanitation, energy, roads and storm water. The critical question posed was, what would be the state of readiness of the Ekurhuleni municipality for the 2016/2017 financial year?

Land evaluation projects amounted to R150 million. For social housing, there were two projects which were continuity projects, so there were no problems. In summary, they had 18.93% of projects without ready-made contracts. They had learnt from the previous financial year and mechanisms were in place to address these previous issues.

Additions from Mr P Phophi, Acting Executive Director, City of Johannesburg;

The City of Johannesburg was on course regarding the provision of services, and they were ensuring that residents had services. They aimed to relocate 12 000 beneficiaries to affordable housing. The city had identified two portions of land that would be extended and relocated. The city had identified Adelaide Tambo informal settlement as an area needing to be extended. The city had promised to deliver 5 000 units and was currently sitting on 4 000, so they were on course.

The city had been allocated R1.7 billion and would spend the funds as allocated in line with the estimates for the next three years. In terms of the HSDG, they had the potential to deliver 12 000 units, but had been able to deliver only 4 084 within this financial year due to certain challenges. There was potential to deliver military veterans’ housing. The city had spent 63% of theUSDG so far.

The city was committed to deliver what had been projected, but would be able to deliver more if need be.

Discussion on Gauteng province presentation

Mr K Sithole (IFP) asked what the financial plan for 2016/2017 was, because Gauteng had failed to meet targets in the past two financial years.  What was Ekurhuleni going to do, as they were lagging behind? They had more hostels than other metros -- what were they going to do to redevelop these? In Tshwane, there was no bulk infrastructure in Dark City or Zithobeni, -- what was the plan as a district? There were also still concerns about the Kliptown informal settlement.

Ms T Gqada (DA) said that Tshwane were currently on 58%, and how were they going to ensure that 100% of the USDG was used with just two months left?  She was concerned that when a project was about to start in some areas, an environmental impact assessment (EIA) would halt the project, so it was clear that the province and the city of Johannesburg were not communicating. In Ekurhuleni it was a fact the city was not spending, and the Committee had not received details oif the planning. It seemed like it had been realised the R306 million that apportioned to hostels would not be spent, and now it was being fiscally dumped on to hostel development. Out of the 91% target for human settlements, only 31% had been achieved, which was very low. The City of Johannesburg was doing fairly well in terms of presenting, but she was concerned with the issue of title deeds and where the Department was in terms of historical deeds? Why was money being spent on unfunded mandates such as libraries?

Ms L Mnganga-Gcabashe (ANC) was glad that the province had acknowledged that they had not done well. The provinces and metros needed to be cautioned that if they did not spend at the beginning of the financial year and waited till the last quarter, they would end up under-spending. They needed to ensure that projects were in the pipeline so that by the coming financial year, the building/construction was off the ground. Gauteng spends a lot of money. They must talk to departments and the province so that environmental planning and related issues were dealt with and delays were avoided. To be specific, the Committee was not happy at all with Ekurhuleni. What was important was that they needed to get off the ground. Pipeline planning needed to be done properly. Land had been bought, but planning issues had not been finalised in order for implementation to be done.

Mr S Gana (DA) said the hostels in Soweto had been standing empty, and asked if the Committee could trust that in the next financial year the hostels in Dube and Diepkloof would be occupied. The same applied to Johannesburg -- hostels needed to be occupied. Which informal settlements was Johannesburg planning to clear? The province had been allocated R400 million and given it to the Nelson Mandela Bayay metro -- and then said it had no funds for stock. How could one say this when one was giving money to other metros?

The Chairperson commented that the presentations indicated most of the projects failed because of a lack of bulk infrastructure. The USDG was supposed to be mainly about bulk infrastructure, so the Committee needed to understand how they were failing. When conducting oversight in Tshwane last year, there had been blocked projects, and the Committee needed to understand what was happening on those projects. Most of the focus on Gauteng province was on the Johannesburg metro and Ekurhuleni, because Tshwane was doing fairly well.

Response:

The Department responded that it wanted to shift the R300 million from Ekurhuleni to Johannesburg. It had active projects in Johannesburg that could have been achieved with that R300 million. National Treasury had been unable to reallocate the amount to Johannesburg due to time constraints, so this had now been allocated towards hostel upgrades within Ekurhuleni.

With regard to accreditation, the first thing Minister Sisulu had done was to meet with all the mayors and review how accreditation was awarded.

On the Joe Slovo park court ruling, this had huge implications country wide and they were discussing it with provincial MECs and metros on how to respond to this particular judgment.

In order to move away from huge under-spending, they had undertaken early planning for the 2016/2017 financial year. By May of this financial year, most contractors would be on site. They wanted to commit a lot of money right at the beginning and manage possible over-expenditure, instead of the other way around. There was a need to work closely with other departments to work with issues of planning. They were confident that this year the Department would be coming back to ask for money instead of giving it away to Nelson Mandela Bay.

Most people in hostels were not having a problem with being relocated to Reconstruction and Development Programme (RDP) houses, but renovating hostels and then asking people to pay more for them was not possible.

Hostels were indeed a troublesome prospect. Time had been taken to allocate people into hostels. This process had taken two years and within those two years, people had invaded illegally. A further challenge had been that human rights organisation had taken the Department to court, and this had further delayed the process.

Hostel units were costing roughly R600 000 to build, with rentals of between R1 000 and R2000, and often tenants could not pay, so the Department was looking to move these people into RDP houses. The biggest issue being experienced was that of land transfer.

On the last visit of the Committee to Winterfeld, those houses were being completed and tenants had been moved into mud houses temporarily while they were being completed. This was similar to Soshanguve, where contractors had been told to unblock the houses. In terms of expenditure, Tshwane was confident that they would spend all their money. Currently they were at 58% of budget, but by end of April they would be on 80%.

In terms of EIA and Water Use Licence Applications (WULAs), there was a need to have synchronised planning so that this issue did not catch them off-guard.

Eastern Cape Province

Mr Gaster Sharpley, HOD: Eastern Cape Department of Human Settlements, said key achievements for the past financial year had been:

• Additional funding of R500 million.
• M3 (Minister, Metro, Mayor) agreements between the three spheres of government within the Eastern Cape, leading to a reduction in the revolving fund for work done in the metro rather than planning for work to be done, establishment of a credible contractor database, stability in the administration, and hands-on support from the national department.
• De-commissioning of non-active projects.
• 100% expenditure, with a bias on value creation.
• Over-achievement on housing.
• A strong pipeline of social housing. They were not doing too well on social awards, but they won the awards due to the quality of their housing.
• The deeds were ready for issuing in the metro, with over 400 000 title deeds ready to be handed over.

During the 2015/2016 financial plan, the province planned to build 13 100 units, despite their budget being reduced by R100 million. The delivery of services was sitting at 10 361, compared to the target of 10 231. The target had been 18 informal settlements to be upgraded, and the province had upgraded 20. Emergency housing programmes and military veterans were not doing so well, but were showing improvement. The 11 Enhanced Peoples Housing Process (EPHP) projects were running, but were not doing too well on delivery, while social housing was not doing as well as in the past financial year.

The province had been allocated a total budget of R1.9 billion, with additional funding of R500 million. Total expenditure had come to R2.4 billion. The business plan and targets for 2016/17 financial year would be financed by an overall budget of R1.99 billion, with a regional budget of R1.82 billion, including R100 million for areas in declared disaster zones. They were aiming to deliver 12 426 RDP housing units. The provincial department was servicing 10 606 sites and rectifying 1 899 defective units with a budget of R170.31 million.

Advice from the National Department of Human Settlements was that the Eastern Cape seemed to be spending more money on rural areas than urban areas. The Nelson Mandela Bay metro budget had been amended to R602.39 billion, and Buffalo City metro to R227.74 million.

The Department had 611 projects, of which 106 were to deliver units and were spread across various regions. Social housing and rentals were going to be under extreme pressure due to the projects. Some contractors had chosen to install roof tiles, even in cases where the Department had indicated they could pay them only so much, which was commendable. There were 265 contractors currently on site, and he was quite confident that within the next three years houses which were scheduled for completion, would be delivered. Currently 590 houses had been finished..

The 106 projects mentioned earlier were at various stages of development. Planning had been slowed down. 80 projects were at the supply chain management (SCM) stage, from terms of reference (TOR) to the bid adjudication committee (BAC). There was a bias to the metros, with Alfred Nzo and OR Tambo budgets being reduced. The Nelson Mandela Bay budget had been increased from R450 million to R602 million, and the Buffalo City budget increased to R227 million. From discussions with the national Department, it appeared they were still budgeting according to previous financial year plans, so there was a need to relook at budgets to complement the need at the moment.

Key issues included the budget reduction, the reduced equitable share of informed apex priorities, beneficiary administration ownership, bulk services and municipal readiness. Opportunities included catalytic projects, deeds of sales should be issued with National Home Builders Registration Council (NHBRC) enrollment, the M3 agreement, the social housing pipeline, the closing of projects, value for money, and the Duncan Village Redevelopment Initiative (DVRI).

Additions by Mr Mthunzi Ngonyama, Branch Head: Housing Project, Buffalo City;

Mr Ngonyama said the total budget for Buffalo City was R1.3 billion, with emphasis on a reduction of grant reliance. Various services -- roads, water and human settlements -- had been approved by the council, and included expenditure per quarter. The budget for roads was R600 million, and only 40% had been used so far. Only R71 million of the R116 million adjustment budget had been spent.

42% of the R126 million for sanitation projects had been spent so far, 29% of the R25 million for electricity projects, and 78% of the R34 million for solid waste management. There was no budget for land issues, because most land had been transferred from various departments, like Public Works. Socio-economic amenities were spread out in terms of achievements per quarter. The medium term strategic framework (MTSF) target was 18 980 units, with a budget of R828 million. The municipal human settlement grant was for capacity, with various project descriptions lined up as indicated, and in the last quarter the metro had spent roughly R334 000.

Challenges, and remedial actions, included:

• Introduced Standard Chart of Accounts (SCOA) which helped their system to align;
• Shortfalls in terms of critical infrastructure projects;
• Various issues in relation to bids expenditure in terms of agreements with the provincial Department of Human Settlements;
• Zwelitsha was one of the projects blocked due to litigation.

Mechanisms were in place to deal with these challenges.

Additions by Ms Dawn McCarthy, Nelson Mandela Bay Metro;

Ms McCarthy said Nelson Mandela Bay, the biggest municipality in the province, was experiencing a slow growth problem resulting in a slow rate of change. Over the five-year MTSF period, the metro would have delivered in excess of the target. The metro’s 2016/2017 HSDG portion, indicated as R500 million, had now been extended to R600 million.

Nelson Mandela Bay’s targets were:

• Land acquisition prioritization.
• In term of USDG targets and land development -- 95 hectares increasing to 120 hectares.
• Informal settlement upgrading (the discrepancy between Nelson Mandela Bay figures and census figures was due to backyard shack dwellings. Essentially they were almost in line with the census figures, and were dealing with the backlog).
• Upgrading 34 informal settlements.

The USDG targets aimed over the next four years to upgrade four informal settlements annually. In terms of amenities, they wanted to transfer 600 title deeds per annum to eligible beneficiaries. For basic services, the USDG target was to meet the requirement of a 200m radius for informal dwellers’ access to water services, and sanitation points had been upped from 75 to 150. Catalytic projects had been identified. The budget for the next four years for human settlements and engineering was R900 million, the majority of which came from the USDG. The metro was moving away from being dependent on grant funding. The percentage spent by the end of the third quarter on water facilities was improving steadily.

Targets were being achieved on all issues except relocations, which was being addressed to make sure the annual target was met. Electricity and energy were on target, except for some supply chain management issues regarding contracting and the awarding of tenders. A title deeds handover ceremony had been set for 12 April -- the deeds would be handed over, and specific issues might arise. All of the targets were being met and they were confident that they were on track.

There were challenges in the areas of small, medium and micro enterprise (SMME) contractors and supply chain management, where there was poor project planning and administrative instability. The link between the USDG and HSDG showed that they were servicing sites within the regulations and always had sufficient sites available to accept top structure funding should this be made available

Discussion

The Chairperson addressed the issue of whether coordination between the province and the metros had improved, particularly in respect of planning.

Mr H Mmemezi (ANC) said the Eastern Cape was naturally a poor province, so improving the budget was important. Middle class people wanted to be assisted as well, and not just the poor. Looking at Buffalo City, he was glad to see that Duncan Village had not been forgotten. The fact that there was a programme to address issues in the C section in particular was commendable, and the Committee would like issues to be attended to as soon as possible. With regard to the province, the title deeds programme should not be left to the metros, but should rather be a joint effort so that people were attracted to working for the title deeds. He was disturbed by the SMME stoppages -- the mayor and portfolio head were not doing what they were supposed to be doing.

Mr M Shelembe (NFP) said the province had spoken of the de-commissioning of non-active projects, and asked how one declared a project as non-active in terms of the integrated planning of the municipality. What was the strategy to engage with beneficiaries on de-commissioned projects?

Mr Sithole said the focus should rather be on rural areas, and not urban areas, as had been indicated in the presentation. What was the time frame for the handover of the title deeds? How did Buffalo City appoint contractors when there was low capacity?

Mr L Khoarai (ANC) asked what Nelson Mandela Bay metro’s time frame was for studies to determine backyard shack dwellers.

Mr Gana said her understanding was that R4.6 billion had been awarded to Nelson Mandela Bay, but in the slides the municipality had indicated that they wanted R8 billion. She was not sure if this was over and above the R4.6 billion already planned for the metro, or whether the R4.6 billion the department planned for Nelson Mandela Bay was what had been accounted for. Since the national Department had gone to Nelson Mandela Bay, how had the human development problems in relation to contractors been dealt with?

Ms V Bam-Mugwanya (ANC) asked for clarity on the three military veterans’ projects in King Sabata Dalindyebo (KSD) local municipality. She was concerned about the transfer of funds from rural areas to urban areas, especially in areas where there was a real need.

Ms Gqada said the Eastern Cape was not doing very well in terms of the infrastructure grant. Did they not have the capacity to use it well, or did they not know what to do? What was the HOD trying to say about the stability of the administration?

Ms Mnganga-Gcabashe said she would like officials to report to the Committee like they were the heads of department. The end of the financial year was approaching, so how far had the erection of proper toilets in Nelson Mandela Bay progressed, and would the balance remaining be completed in the two weeks remaining?. The province should answer, not Nelson Mandela Bay! On the SMMEs, the Committee would want to know whether the payments had been finished and closed, and if not, when they would be.

The Chairperson said the issue of land was not within Buffalo City’s department. She understood why they had none available. Buffalo City was lacking land because when the Committee had previously requested that a member from the Department of Housing to present to them on why Buffalo City did not have its own land acquisition programme, no presentation had been forthcoming. The result that one saw in the presentations today was that Buffalo City had no land acquisition.

Response

The Committee was told that on the land issue, the province had stopped buying land because they did not feel they were competent to do so. Government was not meant to be proactive. It was intended to be systematically proactive with the rules of engagement. Coordination was an ongoing issue in order to determine what the right way to go about the issues was.

The province could confidently say there were over 11 000 units currently under construction, so there was no doubt that the province would achieve its targets for this financial year.

Regarding the SMME stoppages in Nelson Mandela Bay, what had been done was to organise individuals who were contractors by verifying whether they should be contractors or not. What had been found was that the ones making the most noise were the ones who should not be contractors, but were trying to get into the system.

The decommissioning of inactive projects had huge legal implications. There was no notice of approval, and the municipality was working towards getting rid of such norms and reducing the amount of projects.

There was no discrepancy between the R8 billion that the Nelson Mandela Bay metro was asking for and the R4.6 billion that the province had awarded them. In all fairness, the budget that government gave was not necessarily what was needed by metros. The R4.6 billion was what was available, but with the problems that the metro had, they were in need of R8 billion.

It was not intended that the impression should be given that the focus had been moved away from rural areas. What they were attempting to do was to follow where there was a need and create fairness in the distribution of resources so that all areas received attention, not just rural areas.

There was an obvious difference in the stability of the administration today, compared to two years ago. There had been instances where metros had been held hostage by people who did not have legitimate claims to some of the grievances in their communities.

With regard to the KSD, there was a project that had unfortunately taken three years, and the province was in a process of finding a competent contractor. It believed it had found a contractor and completion would take roughly three months, but progress would be given at a later stage.

58 000 structures had been built between 2010 and 2016 and they were confident that they would at least double this in the next five years.

In Khayamnandi, the Public Service Commission (PSC) was trying to enforce the advice of the Department on the contractors not to build any more toilets.

The Department was in a good space, and the Member of the Executive Council (MEC) was handing over title deeds today and on Thursday.

In Duncan Village, there was a project where there had been issues with the appointment of a particular service provider, but the work was on-going and it was hoped that after the litigation was over, they could continue.

Mpumalanga Province Presentation

Mr Kebone Masange, HOD, Mpumalanga Department of Human Settlements, said the province had serviced 5 990 sites against a target of 8 260. The target for rentals and social housing had been 166, with 70 delivered, while for total planned units, the target had been 9 135 and 9 220 had been delivered.

A summary of financial performance indicated a budget of R1.33 billion, with a variance of R64 000. In terms of the peoples' housing process, the target had been 2 373, and they had delivered 2 309 units. In the informal settlements upgrade programme, the target had been 3 631, and 3 957 units had been delivered. The target for institutional subsidies had been met. No Community Residential Units (CRUs) had been constructed yet against a target of 96, although the planning process was being finalised.  A total of 140 subsidies had been targeted, and 58 delivered. In terms of military veterans’ housing, the target had been 126 and 78 were delivered. The emergency housing programme target was 396, and 408 was achieved. For emergency cases throughout the year, greater attention was needed. The total deeds backlog was 10 000, and 5 152 had been delivered.

Details of mining towns were given:

• Emalahleni had targeted to service 3 000 sites, and they over-achieved and serviced 4 000 sites.
• Steve Tshwete had targeted 745 sites, and to develop 140 housing units. It had achieved 311 units and serviced 151 sites, with the remainder being completed in 2016/2017.
• In Thaba Chweu, no sites had been targeted, but they were busy with the process.

The target for social economic facilities had been to build two. One had been completed and the other was under construction. There were no challenges with the operating capital budget, with nine projects enrolled at a cost of R9 million.

The province was supporting two municipalities -- Steve Tshwete and Govan Mbeki -- in terms of accreditation.

The planned targets for 2016/2017 included servicing 5 989 sites, building 8 620 housing units, developing 100 Community Residential Units (CRUs) and handing over 15 000 title deeds.

In Nkomazi there was a project for which there was no budget yet, but the municipality had commenced with bulk infrastructure to support the project. In Bushbuckridge local municipality, the Department was ready for servicing and the construction of sites which would be commencing in two weeks. Umjindi would no longer be a municipality, because it would be joining Mbombela municipality and the province would have 17 local municipalities. In Siyanqoba and Emalahleni, the upgrading, servicing and construction of units was commencing. Construction of military veterans’ housing was underway in Emalahleni.

The province was currently addressing minor challenges with the assistance of the executive council, to help municipalities that were struggling with financial resources.

Discussion

Mr Mmemezi said he had been slightly inconvenienced by presentation slides that were not part of the handout they had received, but he had been able to follow the presentation through the graphic representation and maps. The Committee would like to see that the province was achieving more than its set targets, but it was pleased that targets had been achieved. He expressed concern over title deeds, where it had targeted 10 000 but only managed 5 000. He said mining workers needed more support, and asked if the private sector and owners of farms were assisting government.

Mr Sithole said that with the informal settlement upgrading, they had completed some sites but there had been no planning, meaning there was no bulk infrastructure. With regard to military veterans, the Committee could see the plan for only 15 veterans’ homes but in the presentation they had spoken of more, and this required clarification.

Ms Mnganga-Gcabashe said she had not received an indication of the project pipeline for Mpumalanga. There were a number of variances on different units, and there was no indication that the variances could be covered by the allocated municipalities. If there was no indication, this meant there would be a lot of under-spending and no achievement of targets, which was a worry.

The Chairperson said she appreciated the honesty in the presentation and not hiding the shortfalls or trying to impress the Committee, but rather presenting the truth as it was. She commented that when people did not have title deeds in their hands, they did not feel that the property was theirs.

Response

Mr Masange said that title deeds was one area that all provinces were struggling with, and it was important to reinvest the budget for title deeds, and to prioritise it. If the title deeds budget was not performing in one province then it was better to move it to another province that was in need, so that the budget was kept up with the programme.

The Department could have done more, but had been inhibited by certain constraints. Municipalities needed to approve contractors and get the fairest deal possible and ensure the work done was efficient, because contractors were profit driven and sometimes service delivery was not their priority.

Housing was a difficult project but the province would try to speed it up and increase targets.

Private owners were assisting government. In one case, a farm had been donated to the municipality by a private owner for farm dwellers’ housing.

Some houses had been built without bulk infrastructure in the past, so it was possible. However, for those areas that could not be easily serviced, the Department was providing bulk infrastructure budgets to municipalities.

The project pipeline was definitely in the five-year plan -- from construction right up to the title deeds’ allocation and handover.

Northern Cape presentation

Mr D van Heerden, newly-appointed HOD, Northern Cape Human Settlements Department, outlined the 2015/2016 programme, which included:

• For the Integrated Residential Development Programme (IRDP), it had planned to deliver 1 380 sites and had delivered 1 258.
• For top structures, it had planned to deliver 645 and had delivered 607.
• For the MTSF, it had planned for 300 CRUs, but only 42 had been completed so far
• For the Finance-Linked Individual Subsidy Programme (FLISP), the target was 182 000.
• For title deeds, it was planned to deliver 750 deeds, but only 637 had been delivered at a budget cost of R5.6 million.
• For priority projects, the target was 80 sites. It had managed to complete the services but houses were still under construction

• For mining towns, it had planned to deliver 4 208 sites but had not completed the construction.

Programmes would not be funded by the HSDG for 2015/2016. Total planned housing units were 145, with a total budget allocation of R27.77 million. To date, they had delivered 137 units and used R22.28 million. Eight municipalities had been accredited.

Planned targets for 2016/2017 financial year were:

• 3 338 IRDP sites planned, with a budget of R18.77 million.
• 2 375 upgrading of informal settlements sites planned, with a budget of R65.76 million.
• Top structures for 906 units under the Infrastructure Deployment Programme (IDP) planned, with a budget of R120.44 million.
• The social and rental housing project had been rolled over to the next financial year.
• For rural housing, the plan was to build 50 units with a budget of R6.75 million.
• The overall target was 8 113 sites, with a budget of R130 million.

Challenges identified from the previous financial year were that most towns were on dolomite, and additional support was needed from the province to fund research, the need for bulk infrastructure upgrades or refurbishments, and the high building costs in remote areas where there were no suppliers, making the delivery of units expensive.

Discussion

Mr Sithole asked for an explanation for the over-spending on the rectification of houses.

Mr Mmemezi suggested that if the Department planned carefully, it might be the first province to cater for all the needy people because its population was manageable. It was supporting accredited municipalities very well, but had not provided performance results. Had they performed? He was happy with the plans for 4208 sites in mining towns, but the fact that the Department was still struggling showed that it needed to work harder. It needed to clarify why its budget was so big but it had achieved so little.

Mr Gana referred to the CRU programme, where the Department had said that what had not been completed this financial year would be carried over. However, when looking at the figures, they did not add up. Was this a case of planning gone wrong, or implementation gone wrong?

Ms Mnganga-Gcabashe said the Department was overspending and this could not be allowed. How was it going to deal with this? On the UISP and rural development, for instance, it had overspent by at least R14 million. The figures were very confusing, and required an explanation.

The Chairperson said the province had received extra funding of R100 million from Gauteng, but in the presentation, that R100 million did not seem to feature. She asked for an explanation on expenditure.

Response

Mr Van Heerden said a change in leadership or management could be the reason for some of the inadequacies.

The R100 million had not been indicated because it was part of a completely different budget.  It had been an additional budget and the province wanted to ensure that there was no backlog.

The Department had another division of Cooperative Governance and Human Settlements within one department. Although this was no excuse, it could explain some of the obstacles.

He was committed to getting the Department to achieve a clean audit and to have its finances sorted out.

Municipalities that were not able to deliver had been identified in the business plan and the Department was working towards delivering these services itself.

There were capacity problems within the Department. This was his problem as HOD and hopefully at his next session with the Committee he would be able to report that most of these problems had been addressed.

On the geotechnical issue, because of the presence of dolomite, it took long to identify cleared sites.

As a Department, they could not own this report or ask for the Northern Cape to present at a later stage. A decision had been taken that an audit needed to be done for project level verification, and at a later stage the Department would provide an explanation on what had been done on the 2015/2016 report and then provide a business plan for 2016/2017. Leadership changes had had their own effects on inadequacies.

Ms Mnganga-Gcabashe said she accepted the explanation provided, and also supported a proposal that the Committee grant the national department and the province the opportunity to go back and present before the end of the month on the report from the 2015/2016 financial year and the business plan for 2016/2017.

The Chairperson said the Committee would withdraw this report until such a time as the Department returned to present, particularly on the issue of the figures, because they were very confusing.

The meeting was adjourned.