Provincial Human Settlements Department on Municipalities Annual Performance Plans Day 2

Meeting report

KwaZulu-Natal

Mr Mdu Zungu, Deputy Director General, KwaZulu-Natal Department of Human Settlements, gave details of the Department’s budget and expenditure on the Integrated Residential Development Programme. For social and rental housing, including Community Residential Units (CRUs) the rural housing total annual target was 15 310 units, and the actual delivery to date was 16 181 units. On subsidies, the Department had managed to deliver 558, compared to the targeted 533 units. 669 priority projects had been targeted and the actual delivery on this had been 218. A number of 84 units were targeted for military veterans, but none had actually been delivered. The target for the title deeds backlog (pre-1994) had been 944, and actual delivery had been 544. For post-1994, 1 752 had been the target and delivery had been 1 109.

The total budget for Upgrading of Informal Settlements (UISP) was R207.6 m for 10 854 units. For Social and Rental Housing, including Community Residential Units (CRUs), the budget was R218.5 m, while for Rural Housing it was R859.9 m. For subsidies, the total budget for 2 000 sites was R81.8 m, and for 2 400 units, a budget of R 14.3m had been allocated.

EThekwini Municipality

Ms Beryl Mphakathi, Head of Department (HOD), EThekwini Metropolitan Human Settlements said  high scoring projects were generally located within the prime corridor and dense urban Integrated City Development Grant (ICDG) zones. The Geographic Information System (GIS) model was being revised to include the ICDG zones as specific criteria in order to ensure that there was greater alignment.

 

For 2016/17 - 2018/19, the total of new fully subsidized houses constructed was projected at 31496. The number of title deeds issued to owners for the year 2014/15 was 95, for 2015/16 the deeds were 500, while for 2018/19 the projected title deeds were 1250. She described the proposed plans and funding for land acquisition over the medium term strategic framework (MTSF) period 2016/17 – 2018/19, detailing the location, extent, suitability and utilization of the land and the price at which it would be procured. The 2016/17 - 2018/19 Urban Settlements Development Grant (USDG) targets for land were:

- Number of hectares of land planned for greenfields development in relation to informal settlements’ upgrading:12 706 ha.

- The number of hectares of land planned for brownfields development linked to the informal settlements’ upgrading programme:10 697 ha.

- The number of dwelling units developed and planned per hectare for upgrading informal settlements: Between 30 and 60 per hectare.

- The umber of existing hectares of well located-land earmarked and planned for in situ and incremental upgrading (see location prioritization):10 697 ha.

 

She said the plan for upgrading informal settlements included:

- The existence of an incremental services strategy, together with an in situ upgrading programme aimed to formalize and integrate them within the urban core.

- The 2011-2016 housing sector plan had been previously submitted, and was currently being updated.

- Development and enhancement of the housing prioritization model.

 

Incremental services to informal settlements were being planned on the basis of prioritising rapid delivery of basic services to as many settlements as possible ahead of providing a top structure, and a high level of service to only a small number of selected settlements. Assuming current funding levels, these services would include water standpipes, communal ablution blocks, basic road access, footpaths and related storm water controls, solid waste removal and emergency access, and electricity on a pre-paid basis. Only settlements earmarked for upgrade would be selected.

 

Challenges and remedial measures included new housing, where the challenge was the knock-on effect of delays in awarding contracts for Cornubia, Alternative Technology and Umlazi Infill, and completion certificates not being signed off by professional teams due to contract authority not being resolved. Linked to this, the NHBRC compliance certificates were not being issued. The remedial measure for this issue was that the Bid Adjudication Committee (BAC) had approved the appointment of contractors for Cornubia, Alternative Technology and Umlazi Infill, pending approval. Contractors were to commence on site by mid-January 2016. Discussions with the Province had resulted in them offering professionals to certify work done from their Provincial database of professionals.

Discussion

Mr L Khoarai (ANC) said he wanted clarity on the many zeros in the presentation.

Mr S Gana (DA) said that the unit had obviously overspent, and asked where the extra R230 million had come from. With regard to hostels, particularly at KwaMasha hostels, were there any plans by the metro and province to deal with this issue?

Mr K Sithole (IFP) said nothing had been said about the block project. What plans were there to rectify the houses? What was the relationship between the leadership of EThekwini and the abahlali BaseMjondolo?

Mr H Mmemezi (ANC) said both provinces and metros should move and improve on the issue of title deeds.

Ms T Gqaba (DA) said there were no convincing plans by the Department to reach 100% on the USDG issue.

Ms V Bam-Mugwanya (ANC) said there had been no mention of an allocation of houses to veterans, and no issuing of title deeds. On the issue of farmers, there had been no allocation of houses to farm workers.

The Chairperson said if the Department had a relationship with the Housing Development Agency (HAD) and was assisted by it, or was the Department working alone? She said the issue of title deeds seemed not to be taken seriously, as the targets were very low.

The Director General said on the issue of the allocation, the Department wanted to make it clear that there were three metros that were not performing well -- Cape Town, Ekurhuleni and the city of EThekwini. This was the first time the EThekwini was in this position since the establishment of the USDG. The Department had picked up that EThekwini had struggled this year to deal with procurement. The Department had however met with it and had been assured that this matter would be dealt with. The city had a programme of 160 capital projects which were monitored on a weekly basis. However this year it had failed to manage the supply chain aspect of this programme, and would not be spending its entire allocation according to the projections. The Department, together with National Treasury, was looking at the City’s contractual commitment.

Ms Greta Apelgren-Narkedien, Head of Department, Human Settlements, KwaZulu-Natal, referred to title deeds, and said the Department did these mostly for rural houses, as the need there was greater. A lot of it was with the Ngonyama Trust. The Department also bought private land and did human settlements on these lands as well. However for urban areas, the Department was committed to title deeds despite the challenges experienced. On farm worker assistance, the Department definitely had farm worker housing projects. Some were done together with farm owners, but this was not reported separately in the presentation under the rural housing project. On military veterans, the Department had done everything in its power to assist, from planning the structures to finding a contractor that would be building for them. However, a clash had arisen between the older veterans and the younger generation who had been at military camps, self-defense units etc. This clash was eventually resolved through a decision that some of the elderly would get the houses, and a portion of the veterans would also get houses. She said the zeros on the slides did not mean that there was no money for these programmes, but was because the Department had decided to put the money elsewhere were it would be more meaningful. The Department had a budget of R3.2 billion, and National Treasury had given it R308 million extra. The Department also ended up raising R230 million.

Ms Mphakathi added on what had been said on title deeds. There had been a separation of pre-1994 deeds, which had had to be formalized to formal titles, and this was one of the things that was causing a delay. Hence the target in this regard was very low. She admitted that post 1994, the city had gone on a construction spree and was currently trying to recover from this. On the issue of KwaMashu hostels, there had been a series of acts of violence. The environment was not conducive for the government to deal with some the ills that existed within the hostels. These hostels were budgeted for, and the City was currently building new CRUs within KwaMashu. The issues from these hostels were inherited from before 1994, when there was overcrowding, drugs, violence etc. There were illegal occupations there, so there was still a challenge that the entity was trying to address. The relationship between Abahlali baseMjondolo and the leadership of EThekwini had not been that great. She said the City has been working with the HDA on some of its projects.

Free State

Mr Nthimotse Mokhesi, Head of Department, Free State Human Settlements, outlined the various budgets for the Integrated Residential Development Programme (IRDP), programmes for mining towns, and the CRU convertion/upgrade programme. The total IRDP budget was R115 million to provide 1 407 units. For the UISP, there was a budget of R208 million for upgrading 1 581 units. The total allocation per programme for social and rental housing, including CRU, was R166 million. Subsidies amounted to R20 million. 49 units for military veterans had been budgeted at a cost of R9 million. To deal with the title deeds backlog pre-1994, there was a budget of R780 000, and the total units were 780, while R28 million had been budget for the 28 694 post 1994 backlog.

Challenges facing the Department included budgetary cuts, the cost of construction and partnering with the private sector in the delivery of houses. To meet these challenges, the Province’s mitigation measures included additional funding sourced from the provincial government, the use of alternative building technology and the acquisition of private sector performance through the NHBRC.

Mangaung Metro

Mr George Mohlakoana, Head of Strategic Projects, Mangaung Metropolitan Municipality outlined Medium Term Strategic Framework targets, and said the target for 2019 was for 29 035 households in informal settlements to be upgraded to Phase 2 of the Informal Settlements Upgrading Programme, and so far the total was 1 392. For major land development projects, the city’s human settlements rationale was to undertake mixed development, which provided access to permanent habitable residential structures with secure tenure, and with recreational, retail, industrial and community facilities (RRRIC strategy) -- sustainable human settlements characterised by adequate, reliable and affordable services. The seven land parcels included Hillside View, Vista Park 3, Vista Park 2, Brandkop 702, Cecilia Park, Brandkop (Lourier Park), Thaba Nchu nodal development and CBD rejuvenation.

On the social housing project, Brandwag Development, Council had taken a decision to make the Brandwag municipal rental stock available for further development. Development consisted of 1 051 units to be delivered in the following three phases:

- Phase One – 402 rental housing units: completed.

- Phase Two – 495 rental housing units: 75% complete.

- Phase Three – 154 rental housing units: commenced.

 

He said the province had requested R200 million from the DHS to expedite internal bulk for Vista 2 and 3; students’ accommodation; expedited the 1 532 Breaking New Ground (BNG) project in Hillside View; and provided better synergy and collaboration between Directorates and the Provincial Departments.

Discussion

Mr Sithole said nothing had been said about the new development for title deeds, therefore the Department needed to clarify this. There had been no planning for the programmes that were not funded.

Mr H Chauke (ANC) said the Department should provide a breakdown of the title deeds. He also said the Department should provide an indication of whether it was making an impact or not.

Mr Gana asked if the Department was looking at the escalation of building costs based on 52 square meter housing that the Department had been building, or on the 42 square meter standards the National department had put out. He said the number of title deeds provided by the province did not seem to include Mangaung, so he asked the Department for clarity on this. He asked what was  making the CRU’s in Free State so expensive.

The Chairperson said one of the positive things the Department was doing undertaking some of the construction where people were located. Relocation should be the last resort. On the issue of NHBRC enrolment, what had been budgeted and what had been the utilization?

Mr Mogesi said the standard was indeed 52 square meters. For the 226 units, the province had taken a resolution to top up to the tune of R21 million. Regarding the issue of the title deeds in new developments, and why they were not in the plans, he said the Department did not want to create a backlog because the subsidy quantum itself provided for the transfer of the title deeds.

On the issue of programmes to be funded, this was a ministerial issue. The Department would not be doing rectification anymore. The reason the Free State had been successful was because the military veteran’ programmes had been handled at the top level, the office of the Premier. What the province was pushing for, was for the military veterans to pay rent and taxes.  On the issue of eradication of squatter camps, the Department knew exactly how many informal settlements were within the province. The title deeds presented did not include Mangaung. The cost per unit in terms of rectification included demolition, temporary top structure and work in progress on work foundation. He said the Department would not continue with the rectification. On the CRUs, the Department did not report the units until they were completed and this tended to distort the figures.

North West Province

Mr Fani Motsomi, Acting Chief Director, North West Department of Human Settlements, said the total planned units for the Integrated Residential Development Programme (IRDP) was 3 673, and the actual delivery to date was 3 197 units. For the UISP, the total planned units were 2 430 with a budget allocation of R300 673, but the actual delivery to date was 2 446, with an expenditure of R581 896. The social and rental housing annual target, including CRU, was 296, with an actual delivery to date of 252 units. The rural housing target was 550, and the actual delivery was 252. Subsidies, on the other hand, had an annual planned target of 1 996, and the actual delivery to date had been 3 611. Programmes for mining towns included Kgetlengrivier (866 planned units and 477 actual units delivered), Madibeng (792 planned units and 473 units delivered) and Matlosana (732 planned units and actual delivery of 1 815 units). Moses Kotane also had 484 planned units, of which 1 070 had been delivered, while 1 211 units were planned for Rustenburg and only 1 041 were actually delivered. Programmes proposed, not to be funded by the HSDG, were 826 and the actual delivered units to date were 869.

The total budget for UISP was R333 million, targeting 6 499 units. For social and rental housing, including CRUs, the total budget for units was R99.8 million, while for rural housing the budget for units was R620.9 million.

Discussion

Mr Sithole asked what the issue with the Department was in terms of communal land rights. He asked if there had not been planning by the Department on the pre-1994 title deeds backlog.

Mr Mmemezi said the planning of the Department was good -- it showed that it knew where it was going. He said the Department could not plan and then fail to meet its own targets. He said the Finance-Linked Individual Subsidy Programme (FLISP) caused worry -- marketing in this case could assist on things like credit checks and so on. On mining towns, the problems of strikes should be realized, and the Department should prevent these issues. If it let these issues continue then they would become the norm.

Mr Gana asked whether at Marikana the order had been enforced on illegally occupied units. What was the status of this? What did the  Department mean when it says it rectifies sites?

Ms Bam-Mugwanya said it seemed farm workers had been forgotten about, as the presentation had not indicated anything on this issue. On the title deeds, this seemed to be a challenge for the Department -- was there a plan in place to deal with this issue?

Ms Gqada said North West was doing well on title deeds. She said there was no budget for disaster. She was happy with the emphasis on the prioritisation of informal settlements.

Mr Chauke referred to the capacity of the Department to deliver, and asked what the challenges were that had led to the Department not meeting its own targets. What support had been given to the province? He said the issue of Marikana had been a problem for a while now.

The Chairperson said the Province could rectify infrastructure. She said the issue of beneficiaries must be dealt with in order to eradicate the problem of illegal invasions. The Department should clarify the meaning of “Block Projects.”

Mr Ephraim Motoko, Head of Department, North West Human Settlements, said the Department had managed to get an eviction order from the court for Marikana, and this had been executed. On the rental stock, it had been engaging with Lonmin and the Association of Mineworkers and Construction Union (Amcu) to discuss rates. What had been not agreed on was what the beneficiaries had to pay. The Department had a beneficiary list for the rental part. The ministerial directive said if one wanted to rectify, then one should seek special approval. Thus what the Department wanted to do was to standardise the approach -- to have pre-approval. This would be done to assess the process upfront. He said the Department did have the definition of block projects, and could present it to the Committee and provide it with the number of projects by province as well. He said the first layer of capacity deployment in the North West was at the strategic level. He said the Department had a lot of people acting in positions, but it now had appointed a Head of Department to assist the province in the mining town projects, and this would take the pressure away from the province. With the appointment of the HOD, there would be a bit of stability, and the Department would scale up operations in the mining town.

Mr Motsomi said the city had embarked on a process to deal with the backlog of the title deeds. The entity had conducted occupancy audits on all houses built and occupied. Out of all the audits that had been done, 858 still needed to be resolved on township programme actions, land ownership and lost parents’ deeds. Farm worker housing had not been budgeted for, but a budget had been allocated for the current financial year.

He said the Department had experienced some challenges on programmes that it had implemented, like the FLISP programme. FLISP had been elusive in the province since its inception, with the main challenge being finding qualifying beneficiaries. The Department had decided to engage banks directly in order to change this situation. This had yielded some good results because there had been approval of 225 beneficiaries on the programme. On military veterans as well, the Department had not been able to achieve its target because they were not on the national database, as well as issues pertaining to income. He said issues pertaining to the Department not being able to meet its targets in terms of its reconstruction and development programme (RDP) included starting off slowly on delivery as a Department over the transfer of land and the number of CRUs planned.   

Limpopo Province

Mr Phillip Chauke, Deputy Director General: Limpopo Human Settlements gave budget details for the IRDP (R57.8 m) and UISP (R16.9 m). For social and rental housing, including CRUs, the rural housing annual target for rental housing: communal land rights was 12 162 units and the actual delivery to date had been 8 634 units. Programmes for mining towns included a total of 226 planned FLISP units, and delivery to date was 26 units. For emergency assistance, 134 units had been planned, but no units had been delivered. For military veterans, 20 units had been planned and none were actually delivered. Rural housing, on the other hand, had 2 060 of units targeted and actual delivery of units had amounted to 1 672.

Programmes proposed not to be funded by the HSDG had a total of 1 164 units and an allocation of R109 m. There had been no delivery to date for these programmes, and the actual expenditure had been R35 m.

Discussion

Mr Chauke asked what projects the Department had embarked on in Malamulele.

Mr Sithole said nothing had been said about targets. On the allocation of the budget, there had been no planning.

Mr Gana asked if the Department had instituted plans to recover money from the units that contractors had not completed. The Department must put the Committee at ease and inform it that not a cent was going to any other metro other than Polokwane.

Ms Gqada asked if there had been any consideration of border crossing and what the scale of this problem was.

Mr Mmemezi asked what had happened to the contractor that had left the houses half done.

The Chairperson said one of the uplifting issues of this presentation had been the accreditation of municipalities. She said hopefully this would translate to numbers.

Mr Makopo said there had been interventions in the area of Malamulele. The Department had a contractor that was managing the projects.  Moreover, there were various other projects that were being done in this area. He said the Department did not pay for incomplete projects. What the Department did, however, was blacklist all the contractors that were performing poorly. Before the implementation of block projects, the National Home Builders Registration Council (NHBRC) had been employed to do audits for the Department, and the units involved were not 500, but more than 2 600. Therefore to addressed this, the Department was staggering them based on the budget that it had. The Department assured the Committee that it would not be surrendering money to other departments for the year 2016/17.

Mr Chauke said the Department did include the areas in Malamulele, and there was a contractor currently working in the Tsholalele area -- an area which covered the areas of Malamulele. On title deeds, 2 200 had been delivered in the year under review and another 3 000 were targeted for 2016/17. Limpopo was serious about blacklisting companies that did not perform their work. In the recovery phase, the Department had spent the whole budget, but there was a rollover that the Department had applied to the National Treasury to ensure that the additional units were recovered and the Department exceeded the target. On the issue of borders, the Department was servicing more greenfields projects. He said the Department would be judged by its deeds to show that it was able to push delivery to 8 664 units, which had not happened in past three years.

Western Cape

Mr Thando Mguli, Head of Department, Western Cape Human Settlements said the IRDP budget allocation was R314.9 m, while the allocation for the UISP was R267.5 m. The total planned target for the MTSF was 10 840 units, and the actual delivery to date was 10852 units. The target for the title deeds backlog (post-1994) had been 5 000, and actual delivery to date was 5 121. The Enhanced Extended Discount Benefit Scheme (EEDBS) had a R20 million budget allocation, and 524 units had been delivered to date. The operating capital budget was R86.8 m, and expenditure to date was R86.2 m. For planned targets and budgets per housing programme, military veterans had 208 units at a budget of R24.8 m, and on the title deeds backlog (post-1994), 9 480 total units were planned at a budget of R14.4 m.

City of Cape Town

Mr Ray Rachuba said Cape Town had achieved the following: a 1:4 ratio for sanitation, which translated into 43 010 toilets serving 152 523 households; and a 1:26 ratio for water, which translated into 5 840 water taps serving 152 523 households. The MTSF target for 2019 was that 750 000 households in informal settlements would be upgraded to Phase 2 of the Informal Settlements Upgrading Programme. The City had started attending to historic transfers (1994-2012), and three years ago the backlog had been estimated at 25 000 in the metropole. Legal blockages had been attended to and this had resulted in approximately 15000 transfers. The balance of transfers were now problem cases requiring individual attention, as well as legislative and policy support. This backlog was now estimated at about 10 000. A professional team had been appointed on tender and aimed to reduce backlog over the next three years. There was a simultaneous drive to create the necessary policy and legal frameworks to settle disputes.

He said the City’s Southern Corridor Sustainable Neighborhoods programme included:

-upgrading the living conditions in 27 informal settlements. Every one of these informal settlements currently had access to basic services within the constraints they faced (including densities and land ownership).

-The City had prepared a development matrix that considered all informal settlements for either in situ or greenfield development (or a combination of the two), based on the various risks of the individual settlements.

-The project had three sub-programmes: airport precinct, in-situ upgrades and mixed-use greenfield developments

The North-Eastern Corridor Public-Private Partnership (PPP) was a large-scale project including mixed income groups and mixed land uses in the north-eastern growth corridor, as defined in the Cape Town Spatial Development Framework. Most of the housing opportunities were delivered through a pioneering PPP, and innovative technology was being used to build the housing units. There were three sub-projects -- Greenville, Darwin Road and Maroela -- and implementation had already begun in Greenville. The three sub-projects would be constructed across 12 greenfield land parcels within a five km catchment area from each other, and were located close to the N1 and the Fisantekraal and Kraaifontein railway stations. They also offered easy access to employment opportunities. The project would accommodate some 19 987 households by means of a mix of housing programmes/typologies (including site-and-service, Breaking New Ground, gap and open-market).

He said the USDG Programme 2015/16 included:

- Land acquisition programme: R12 million.

- Provision of internal services for human settlements: 30 projects with a budget allocation of R213 million.

- Provision of water and sanitation: 26 projects (bulk and reticulation) to the value of R408 million.

- Electrification: Five projects with a budget allocation of R113 million.

- Provision of social amenities: Clinics: Five projects with a budget allocation of R4.55 m.

- Parks: 30 projects with a budget allocation of R48.417 m.

- Disaster and risk: 11 projects with a budget allocation of R11.329 m.

- Library: One project with a budget allocation of R8.95 m.

- Sport and recreation facilities: 15 projects with a budget allocation of R28.954 m.

- Transportation: 14 projects with a budget allocation of R339.94 m.

- Trade and investment programme: R14 m.

In terms of the link between the USDG and HSDG, the USDG was used for the construction of critical bulk infrastructure and the provision of internal services linked to approved housing projects. The HSDG was used for the construction of top structures on serviced sites, as prepared by the USDG. The Built Environment Performance Plan (BEPP) process ensured alignment between the various grant allocations within the City.

Discussion

Mr Sithole asked how the Department managed its budget, since it seemed that there was a lot of overspending as well as under-spending. There was nothing budgeted by the Department for new development title deeds in this area, and the same seemed to be the case with farm workers’ housing assistance. He asked how the City was going to recover from under-spending by R150 million.

Ms Gqada said the targets of the Department were very low for the FLISP programme. Were the figures presented for the relief programme for the year under review? The title deeds targets were very low. She would have liked the City of Cape Town to have included in their presentation the issues about land, and what the challenges were.

Mr Chauke asked the City to take the Committee through its interventions in the Dunoon situation.

Mr Gana said the there had been a lot of noise regarding the municipal infrastructure grant that was not being transferred, and that when the City had received the money, it had not been spent, and this did not reflect well. The City should give explanation as to why it had not spent the capacity grant. On a national scale, none of the metros that were at the meeting had highlighted their failure to spent this grant. He asked if the HOD knew anything about the house project that had been ceased in Belhar and, if so, what the status of this project was. He asked if the land sold at Sea Point belonged to the City of Cape Town, or had Public Works sold it directly to a private entity.

Mr Mmemezi said the presentation by the City had been good. He wondered how it had happened that the City had overspent on the FLISP programme.

The Chairperson said the Committee was really worried about the under-spending by the City of Cape Town, because this had become a trend. She said the City should also further elaborate on what a sub division programme was.

Mr  Mguli said the issue of the HOD would be conveyed. The issue of the institutional subsidy grant would be going to MINMEC, and the head of policy was dealing with it. The issue about the land was interesting in a sense that he had actually written to Public Works to object to the selling of the land. The land had actually belonged to the Department of Public Works and he had objected because this was an opportunity for the Department to do a human settlements project and integrate blacks and coloureds among people living in Sea Point, because buying land there was very expensive.

Ms Jacqui Samson, Chief Director, Western Cape DHS, said that although the Department did not have a project specifically for farm workers and beneficiaries, in regions such Stellenbosch and Drakenstein where evictions were prevalent, beneficiaries and farm residents were ensured allocation. On the FLISP project, the target was an average of 15%, and the targets were in line with the proportion of the allocations. The land release project specifically went for a certain period and the Department also created a pipeline. On the issue of a low deeds target, there were backlogs and issues of ownership contested, such as inheritance, divorce etc. With the post-1994 deeds there was a backlog, but the City had been very progressive on the projects that it had launched. The City looks at specific projects where military veterans are allocated houses. She said the Department would certainly share its plans on the FLISP project with other provinces.

The meeting was adjourned.