Department of Human Settlements; Free State; Eastern Cape Business Plans
Human Settlements, Water and Sanitation
20 June 2017
Chairperson: Ms N Mafu (ANC)
The overall budget for the Free State province stood at R1, 24 billion. Total Sites 6 848, Units 5 395 and Title Deeds Backlog 36 919. The budget for OPSCAP is R59 192 560 million, Land Acquisition R5.5million, Accreditation R2 million and National Homebuilders Registration Council (Geo Tech) R6 162 900 million. The Department held a Provincial Steering Committee on 29 March 2017. All Municipalities that attended made a commitment to work together in achieving the targets set. Nine Local Municipalities and one Metro attended this meeting as compared to only three that normally attended these meetings. The Provincial Departments of Cooperative Governance, Traditional Affairs and Public Works will be part of the steering committee, which will to assist with easy transfer of properties owned by Public Works to Municipalities and further fast-tracking registration of title deeds in the names of beneficiaries. On the issue of payment of contractors, the province has struggled with contractors’ payments, particularly because of accruals and over-commitments. A lot of accruals were carried over to the new financial year, in fact the province is sitting with R9million worth of accruals and R1.2 million of which is due to be payable by next week.
Members asked when the pre-1994 title deeds historic backlog will be eradicated and the plans to ensure that title deeds are given to house owners once they have been given houses. Other questions were on a lack of inter-governmental cooperation between municipalities. If the Committee’s visit spurred a turn around, what more needs to be done to engender a genuine turn around; could it be political intervention perhaps that could lead to a more unified approach that ultimately benefits housing delivery?
The Eastern Cape Department of Human Settlements’ overall budget for the province for 2018/7 is R2.2billion, Regional budget for units and sits at 2 billion, Finance Linked Subsidy Programme individual subsidies/social & rental housing will be 831 units while the Department will also be servicing 7 805 sites for 2017/18. The summary of planned targets for 2017/18 are User Interfaces and Settlements Planning 884 sites and 4 506 units, New individual units excluding rural is 261 units, Community Residential Units constructed is 30, Social and rental housing 6, FLISP 540 units, Rural housing 540 units, military veterans 2016 units and Title deeds backlog eradication 10 000.
The title restoration project steering committee is functional and continues to sit on a quarterly basis. The province is represented in the National Title Restoration Committee and the provincial representative attends the national meetings regularly.
The title deeds to be issued should be the same as planned units for new developments
The target for 2017/18 for post- 1994 title deed is 10 000; for pre-1994 is 1 074; and for the current developments 6 000
Challenges facing the 20-year vision are as follows:
- Beneficiary administration
- Illegal occupation
- Mushrooming of informal settlements
- Bulk infrastructure
- Community expectations verses available resources
- Migration to urban settlement
A Member asked what mechanisms are in place to stop land invasion in the Eastern Cape? Others wanted to know how the national department is managing the non-alignment of MTSF five year targets and how the risks that emerge at the end of the five-year circle are dealt with. Members expressed unhappiness because of the continuous payments for rectification in the province, and asked whether the contractors building these houses are unmasked. What then are the consequences?
The Chairperson welcomed the honourable members and the province of Free State officials to the briefing and commended the MECs of Free State and Eastern Cape provinces for sending written apologies informing the Committee of their inability to attend. Mr Neville Chainee, DDG: National Department of Human Settlements (DHS) introduced officials from the national department and apologised for the absence of the Director General (DG).
Briefing by the Department of Human Settlements Free State Province on their business plan for 2017/18
Mr Tim Mokhesi, HOD Free State Department of Human Settlements, briefed the Committee.
The overall budget for the province stood at R1,24 billion. Total Sites 6 848, Units 5 395 and Title Deeds Backlog 36 919. The budget for OPSCAP is R59 192 560 million, Land Acquisition R5.5million, Accreditation R2 million and National Homebuilders Registration Council (NHBRC) (Geo Tech) R6 162 900 million.
The Department will also be constructing 5 395 units as follows: Financial Intervention 350 units, Incremental Housing 3 431Units, Military Vets 199 units, Social & Rental Housing 1 223 units, Rural Housing 153 units and Provincial Specific 39 units. The department will also be servicing a total of 6 848 sites made up with 6 514 User Interfaces and Settlements Planning (UISP) and 334 Integrated Rural Development Programme (IRDP) sites.
The total number of planned sites is 6 848 and 5 186 units. For Military Veterans, 15 sites are planned and 199units. 36 919 units is planned for Title Deeds Backlog Eradication and 4 019 Title Deeds (new developments). The Regional breakdown of planned projects is 6 848 sites and 5 395 units in all. Total Deeds for Conveyancing is 780, Beneficiaries to be confirmed also 780, and likewise 780 Title Deeds in the Township Establishment Process.
The Department held a Provincial Steering Committee on the 29 March 2017. All Municipalities that attended made a commitment to work together in achieving the targets set. Nine Local Municipalities and One Metro attended this meeting as compared to only three that normally attended these meetings. The Provincial Departments of Cooperative Governance and Traditional Affairs(COGTA) and Public Works are going to be part of the steering committee, which will assist with easy transfer of properties owned by Public Works to Municipalities and further fast-tracking registration of title deeds in the names of beneficiaries. The next provincial steering committee meeting is on 22nd June 2017. The National Steering Committee meeting is scheduled for 4 July 2017.
The Department has assigned an official (Senior Legal Admin Officer) to attend to all the complaints received from Conveyancers with regard to the non-cooperation and/or delay caused by Municipalities in signing the deeds documents. This official visits all Municipalities and Conveyancers once every week. Municipalities are signing documents within ten days of receipt from conveyancers. The Department has noticed a steady improvement in the number of title deeds registered in this regard.
In terms of Catalytic projects, Caleb Motshabi has 1 412 planned sites for 2017/18 financial year and Baken Park Ext 6 & 7 has 190, making it a total 1 606 sites planned for the current financial year. Other projects include 39 requiring ministerial approval and 411 social housing. Informal housing summary in the Free Sate shows that Free State recorded a total of 143 Informal Settlements. 41 Household enumeration/settlement profiling was conducted in Matjhabeng, Moqhaka, Metsimaholo, Maluti-a-Phofung; Dihlabeng Local Municipalities as well as Mangaung Metro with the aim to provide the status quo and situation for each informal settlement. 47 Resettlement plans have been concluded in all National Upgrade Support Programme (NUSP) Municipalities. Informal Settlement Upgrading (ISU) chapter of Municipal Housing Sector Plan concluded in 14 of the 20 Municipalities. 75 Informal Settlements are currently undergoing planning and Survey.
Township Establishment processes have been completed in 33 informal settlements and are included in the pipeline for provision of basic Municipal engineering services; Installation of basic engineering services is currently underway in 14 Informal Settlements.
On the issue of payment of contractors, this province has struggled with contractors’ payments, particularly because of accruals and over-commitments. A lot of accruals are carried over to the new financial year, the province is sitting with R9 million worth of accruals and R1.2 million of which is due to be payable by next week. All accruals are presently written into the business plans for this year.
Mr K Sithole (IFP) wanted to know if the Department had map plan should they intend to acquire land. Were meetings held with the Department of Public Works (DPW) for this purpose? What was the number of catalytic projects envisaged? In the farm workers assistance programme, how many farm workers are to be assisted? There is a budget but no numbers.
Ms M Nkadimeng (ANC) asked when the pre-1994 title deeds historic backlog will be eradicated. What were the plans to ensure that title deeds are given to house owners once they were given houses?
Ms M Mokause (EFF) thought the Free Sate would have improved by now with previously identified challenges. It was not known if they are moving forward or stayed stagnant. One of such challenges was municipalities not attending steering committee meetings. Did such municipalities identify themselves as islands on their own, not interested in working as a collective? The province did not seem to do anything about it. Sasolburg was identified as a municipality not awarding houses to people according to the official list; instead houses are given to people not on the list on completion. Why were ward councillors allocating houses instead of government officials? Clarity was sought whether it is forty-one formal informal settlements in four municipalities as mentioned in the presentation.
Mr H Mmemezi (ANC) welcomed the delegation from Free State province to Parliament and was pleased that the presentation covered all the areas and not only the big towns. It is heartening to see that municipalities not previously attending the coordinating meetings are finally doing so after the Portfolio Committee’s visit to the province. The increase in the number of title deeds being delivered including the reduction in backlog is commendable knowing that the province is catering to a bigger population. This underscores the impact of the Committee’s visit. Saying that there is a steady improvement to eradicate the title deeds backlog is not enough, what this committee wants is a radical improvement. Giving people proof that they own a house should not be such a big problem. The way the presentation was packaged is very commendable. No matter what the media says, the reality is that the ANC led government is improving the lives of our people. Giving them places to stay is restoring their dignity. The Committee is happy that the Department is taking care of the poorest of the poor staying in the informal settlements.
On the payment of contractors, it was laudable that the Department owned up to its inadequacies and did not resort to hiding them. The biggest problem here is the accruals and contractors are not being paid. This helped the Committee to understand the challenges. As stated that 1.2million contractors are being owed and the Department is ready to pay them. This matter should please be sorted knowing that some contractors have taken the Department to court. These are poor people who are trying to earn a living. They do not even have the money to litigate; they are being strangled in circumstances like this. These emerging black companies will be forced to go under and then become dependent on the state again. They should be able to appreciate that the government of the day are truly empowering the previously marginalised.
On the Finance Linked Individual Subsidy Programme (FLISP), 300 is definitely not enough for the whole province. There are so many categories of workers such as nurses, police, and government and private employees to be included here. Having only 300 under FLISP, means that there is not enough focus on this problem. Should we expect middle income persons to protest before they are considered? One can only conclude that the issues raised during the visit of the committee to the province were taken seriously.
Mr M Malatsi (DA) said while acknowledging an improvement in the all provinces thus far, it still shows underperformance. There is still a lack of inter-governmental cooperation between municipalities. If there is a turnaround because of the visit of the Portfolio Committee, the question now is what more needs to be done to engender a genuine turn around; could it be political intervention perhaps. This could lead to a more unified approach that ultimately benefits housing delivery so that all the provinces and municipalities could be in synch. What measures are in place then so that previous misdeeds are not repeated? Accrual issues should be dealt with and the mistakes of the past not repeated. The same can be said of contractors’ payments. It is all well to say they are now being paid, but what intervention is in place to forestall the repetition of consistently owing contractors? Such an intervention could minimise if not eliminate the incidence of owing them. Owing contractors is not a government issue but a livelihood one as it imperils the capacity of the said contractors to do business and feed their families. Government should not inhibit the success of Small and Medium Enterprises (SMMEs) and businesses because of delayed payment. Was the problem lack of capacity, lack of foresight and proper planning? These questions were asked so that the Committee’s engagement with the Department could remove all the administrative obstacles standing as an impediment. Did the Department have any engagements with Mangaung so as to determine the reasons for the under-spending in Urban Settlement Development Grants (USDGs)?
Ms V Bam-Mugwanya (ANC) appreciated the presentation by the Free State province and the mechanisms put in place by the National Department to enhance reporting accurately. He was pleased to see from the presentation that the Free State province has spent 100% on their Human Settlements Development Grants (HSDG) allocation, this should be continued. It is noteworthy that the money was spent on where it was supposed to and not on a wrong focus. Though there was unspent USDG budget in Mangaung metro, it should be ensured that this is not repeated in this financial year. Ensure that purchase management is tightened and all your books are closed in time too before the next reporting period. This will help the Department to also prepare their business plan earlier because the province is amongst those that delay submitting their business plan. The province is called here because in fact it is among the four out nine provinces that has accruals. Not paying contractors is being in breach of PFMA. Some of these contractors were not paid in time and some will not be able to recover. The Committee is not happy that contractors are not being paid for services delivered. It should not become a norm that contractors are not paid. If we can have a data of contractors pushed out of business because of non-payment, it will shock us all. It is a taboo and a crime that these are being orchestrated by our own local, provincial and national government. This action is putting families in hunger and back on dependency on government via social grants, it a circle of poverty being perpetrated. Another risk area is the Supply Chain Management (SCM) processes sitting on 32%. Stop over-committing and stay in line.
The Chairperson stressed that the risky area are projects readiness and projects that require SCM processes sitting at 31%, especially as the financial year has just begun. The ideal situation is for that number to be low. A lot of SCM processes should have been completed by now. Another issue is the steering committee on title deeds. Whist it is appreciated that the province has moved from 0% to 50% in terms of municipalities taking part in steering committee meetings, it is not clear why the other 50% are not attending. What is the province doing to ensure that it attains 100%? It should not be a situation whereby the municipalities choose to attend or not but attendance must be made compulsory. The National Department should wade into this matter. This area was discussed in details when the committee visited in February, so it is not acceptable that not much has changed yet.
Mr Mokhesi thanked the Members for the questions and said on the issue of land acquisition, the Department has achieved its MTSF targets for 2019. Members would recall that when they visited Catalytic Projects in Sasolburg, the Department stated their intention to acquire a piece of land adjacent to the properties already acquired in order to give this settlement access to the river because all other land around there has been bought. Without buying / acquiring this piece of land, ordinary people will not have access to the river for recreational facilities etc. The Catalytic project in Sasolburg areas where there are no units is still in early stages. The council has just passed a resolution to adopt the urban design presented to it a few months after the Portfolio Committee left. Work will start next year provided the sub-division is approved by council.
On the questions raised regarding time frames for the title deeds, the backlog for the entire MTSF period is 63 000. The current year target is 36 000. On why title deeds are not delivered when houses are completed, it should be noted that title deeds are not linked to the structure but to the site. Once the Department identifies and registers a beneficiary, only then the Conveyancing process begins, this is what the Department will be doing so as not to create another backlog.
The municipalities not attending the steering committee, all municipalities visited by the Committee are attending. The Committee was very forceful and the message was passed in no uncertain terms. Those not attending are actually smaller municipalities, but what is needed now is political intervention at Mayoral level. This issue has been raised in the Premier Coordinating Forums that meet quarterly.
On the beneficiary list, this problem is not limited to Sasolburg alone. It is a general one at the municipalities where there are waiting list issues. The National Department visited the Department and asked for the implementation of register which will operate on a first come first serve basis and will help eliminate human intervention. The first briefing from the National Department on the modalities of its operation has taken place already. All the municipalities will be invited and the register intervention will also be presented to the executive council.
On the need to radically improve on title deeds delivery, this was taken note of and that was what the Department would do. The Department will also improve on services to the mining towns. The municipality is also expected to improve and invest in their own areas to complement the provincial department. A presentation was given on the issue of land. The Department was amazed at the amount of land belonging to the municipalities that the provinces are not aware of.
On what the department is doing to eliminate accruals, this comes about because of over commitment. The province is caught between the rock and a hard place because the National Department is pushing for targets and because of over enthusiasm to meet those MTSF targets, also Free State also has a history behind the accruals. What is noticed is that the provision of services has entirely become the work of the province in particular Human Settlements.
In respect to FLISP, it is agreed that 300 is not enough. What people now want is sites to build on themselves, including the professionals. The focus was wrong before and the Department has suddenly realised that. The Department’s focus has now changed and the Committee will see that happening in the next three years.
On emphasis on the thirty-day payment period, some of the big contractors have unfortunately been told to slow down work. Payment priority is now on the smaller contractors. Unfortunately, the law says that all contractors should be paid within thirty days. Faced with this situation the Department has to prioritise. Whether there is engagement with Mangaung with respect to the use of USDG, the National Department must be commended for their assistance on forcefully stating how the USDG should be used, of which the province has no authority on its usage. The Department has also aligned its tools with the business plan which was not the case thanks again to the National Department. The column that says other should normally be enrolment, accreditation etc and that forms other programmes.
The Department takes cognisance of project readiness concerns. Efforts will be made to make the figures better. The province has established a database of contractors. Looking at the numbers at present compared to when the business plans were being approved, there is an improvement.
Mr Neville Chainee, Acting DG, National Department of Human Settlements, said the Department is dealing with difficulties between provinces and national whereby municipal land is classified as municipal. Municipalities have the mandate to deal with municipal land as they deem fit. The National Department only has control over provincial and state land. This can only change if Parliament amends that section of the applicable laws. The Department has managed to align the funding of USDG being utilised for bulk projects in Mangaung. Mangaung is expected now to release some stands because they had a bit of problem with bulk. The Minister has set up a task team to assist the province deal with title deeds.
Briefing by the Department of Human Settlements Eastern Cape Province on their business plan for 2017/18
Mr Gaster Sharpley, HOD, EC Department of Human Settlements, said the service delivery outlook from 2014-19 has the following salient points;
RDP housing opportunities for the period is 74 799, Social and rental housing rented is 7 560, service sites serviced is 62 761, houses rectified for the period is 27 000, hectarage of land acquired 1 200, job created 85 000 and 20 500 title deeds transferred. The conditional grant expenditure breakdown per milestone was as follows; Roof 14%, Wall plate17%, Foundation 13%, Feasibility, planning services 13%, Full and partial services 7% and Rectification 13%.
The overall budget for the province for 2018/7 is R2.2 billion, Regional budget for units and sites at 2 billion, FLSP/individual subsidies/social &rental housing will be 831 units while the Department will also be servicing 7 805 sites for 2017/18.
Planned targets for 2017/18 are UISP 884 sites and 4 506 units, New individual units excluding rural is 261 units, CRU constructed is 30, Social and rental housing 6, FLISP 540 units,
Rural housing 540 units, military veterans 2016 units and Title deeds backlog eradication 10 000. The provincial summary of project readiness as follows: Projects ready for construction and contractors are on site 82% of total HSDG budget allocation, projects that require SCM processes 7% and projects under planning 1.3%. Deeds ready for Conveyancing in 2017/18 are 1 074.Planning and services informal settlements is 813 sites, Informal structure construction 2 834 units, Informal settlements upgrading 40 sites and 1 672 units, Individual housing subsidies non-credit linked 261 units, peoples housing process 31 sites and 305 units, Consolidation subsidies excluding blocked projects 60 sites and 30 units. Community residential units constructed 30 units and rural housing; communal rights 4 570 sites and 4 819 units. FLISP 540 units. Disaster management 557 planned units and 741 units.
The beneficiary management in Eastern Cape has the following policy principles;
- Housing programmes target those household who are not able to independently resolve their own housing needs
- Priority is given to the most vulnerable households; 60 years and above, disabled persons or beneficiaries with disabled family members, households with special needs, households faced with eminent evictions
- Policy provisions are made for households with special housing needs and approval is done accordingly
- Opportunity is given to qualifying beneficiaries to purchase completed habitable existing stands through individual housing subsidy.
The title restoration project steering committee is functional and continues to sit on a quarterly basis. The province is represented in the National Title Restoration Committee regularly and the provincial representative attends national meetings regularly.
The title deeds to be issued should be the same as planned units for new developments
Targets for 2017/18 for post- 1994 title deed 10 000
Targets for pre-1994 is 1 074
Target for the current developments is 6 000
Challenges facing the 20-year vision are as follows:
- Beneficiary administration
- Illegal occupation
- Mushrooming of informal settlements
- Bulk infrastructure
- Community expectations verses available resources
- Migration to urban settlement
Mr L Khoari (ANC) thanked Eastern Cape officials for the presentation and asked if they still had rectification projects and more if light could be thrown on that. What is the relationship between the contractors and sub-contractors in the province and whether this infighting between them was delaying projects? Were there court interventions as a result? He asked for clarity on the zeros in slide no. 12 on military veterans?
Mr Sithole asked if the 27 000 rectification is the target for this year. On job creation, did it mean that 85 000 jobs were only created in Eastern Cape in five years? Are there mechanisms in place to stop land invasion in the Eastern Cape? This seems to be a big problem in the province. Title deeds new developments are zero, why is that? The newly constructed houses without proper planning, about 500 000 of them, what mechanisms did the Department have in place to help this people?
Ms Nkadimeng while appreciating the presentation, wanted to know what plan is in place to ensure that the mistakes of rectification of houses already constructed did not occur again. On the consolidation of regional performance, five regions are not meeting their targets; why are they not meeting their targets? And what is the plan going forward? On the challenges meeting their twenty-year vision, what are the plans to mitigate them?
Mr M Bara (DA) wanted to know measures in place to forestall illegal land invasion since illegal occupiers cannot be chased away without providing alternative accommodation.
Ms V Bam-Mugwanya (ANC) thanked the province for the presentation and noted that there is the complaint of non-payment of small contractors in the Chris Hani area of Eastern Cape. What was the explanation for non-payment? How can small businesses emerge in such situation? Why does the province have this problem in the Chris Hani area in particular? Why is one contractor in Mthatha overloaded with work and cannot manage it?
Mr Malatsi wanted to know how the National Department is managing the non-alignment of MTSF five year targets. How are the risks that emerge at the end of the five-year circle dealt with? The amount spent on defective units is huge, what are causes of the defective units? Is it normal wear and tear? Is it because of shoddy workmanship? Are penalties initiated against such contractors?
Mr H Mmemezi (ANC) welcomed the presentation and was unhappy because of the continuous payment for rectification. The contractors building these houses must be unmasked. What are the consequences visited on them? Are they blacklisted? They must not be allowed to mess things up like this. They deprived other people of good services. How do you think the planning formula should work on FLISP projects? More information should be provided on contractors that are not paid.
The Chairperson joined her colleagues in appreciating the presentation. In the year under review, the National Department communicated that Eastern Cape had spent 100% of its HSDG budget, this is very positive as long as it was spent on the correct programmes. The province indicated some infrastructural challenges regarding USDG and corruption, the Committee had asked the National Department to intervene in the Nelson Mandela and Buffalo city metros because it was almost at the stage of collapse at the time. Contractors were not being paid, unspent sanitation, electricity, road, storm water and Human Settlement budgets. The Committee still urges the province to link up with the metros and the National Department and continue to monitor what is happening there because they are not entirely out of the woods yet. On the current financial year MTSF period, two items have been highlighted. Eight social amenities are under-planned, this must be rectified, revised and improved on because the resources are there. Dealing with the consolidation of regional performances, Amathole and other districts are on the red and lagging behind. They need interventions to upscale their performances. Disaster is funded by CoGTA, what is the disaster allocation for?
On informal settlements, the report is very positive from the National Department. Eastern Cape is coming to the fore and improving but more can still be done because the citizens of this province are mainly those migrating to other provinces.
Mr Sharpley thanked Members for the questions. On the rectification questions asked, the Department has had an intense study and found that rectification in the Easter Cape province is historical. NHBRC started enrolling 2006 but the Department took a decision to give a two-year grace period because some projects were still running prior to 2006. Any projects from 2008 onwards must be enrolled with NHBRC, which means the department will have recourse to the contractors. There is no new rectification and no single projects from 2008 that has a single rectification, all such projects are prior to 2008. It is understandable to think that all rectification projects have to do with shoddy workmanship; it is not only that. If we recall in 1995 when local governments were established, there was a desire to build a million houses within the first five years. What happened particularly in the Eastern Cape and KZN when there was demand for housing, some of the building norms and standards were reduced. A typical example, in the foundation of today, steel is put in so that walls will not crack. But there was no steel in years prior; what was done was to cut a platform and put in a box of planks and begin to cement. Houses were also 18 or even 16 square metres. So that is the historical rectification legacy of houses in the Eastern Cape. You find walls are falling not because of shoddy workmanship rather the foundation cannot carry it. Another point to mention is that SABS approved material was not a requirement then. Bricks were not tested so was corrugated iron etc. You could find bricks on roofs of houses in the province because the roof sheets are too thin. There was a range of reasons that have led to rectifications in some of the provinces, especially those that have lots of backlogs. The 27 000 target for rectification is for the entire five years not two years. 3 000 are left to be rectified in the next two years. The province does not have an accurate figure of rectification done from 1995 to date.
On the Department’s relationship with contractors, the sad part is that it does not matter how good the relationship is, if the Department is not paying them so will it be until it hurts them. There is now a meeting held with contractors working on sites every Monday or Tuesday in every region with the regional director then every six weeks with the head of department in the provincial office. There is now an understanding with contractors on payments; they also appreciate what the Department did because when the Department had a diminished cash flow, together with them a payment plan was worked whereby payment was made to the oldest invoice first. It is a policy in the Department that no one has the right to choose which invoice to pay. However, there are incidents where contractors seeing that oldest invoices are paid, put in an invoice and tell the community that they have not been paid and they block the roads. This then puts pressure on the provincial department because the roads are blocked to pay the contractor when the invoice is not even thirty days. Another point to make is that the bigger contractors have accumulated their invoices, so you see a contractor with a R20 million invoice. In such cases, the contractor is called in to negotiate to be paid for instance R5 million so he/s can have a cash flow. Two of the regions were making the contractors re-date the invoice and that is a crime. This was picked up soon enough. A contractor issued an invoice in September and by February was still unpaid. They told the contractor to change the date of the invoice in order to be paid so it looks like it was a new invoice. It was picked up because the inspections were done in October and the regions were asked during a regional oversight why it was so. The Department there and then took the necessary steps. On the relationship between contractors and sub-contractors, there are cases of sub-contractors coming to the Department expressing their problems with the main contractors. In such cases the Department tries to mediate. The Department insists that there must be a binding contract between the two because most of the problems are due to a lack of contract between them. If the sub-contractor could prove that work has been done by them, the Department tries to find an amicable solution. There is presently a case whereby a contractor to avoid paying a sub-contractor changed his banking details. This act is taken very seriously by the Department because it is a deliberate attempt not to pay a sub-contractor.
On the zeros on the military veterans’ columns, the Department did not add the cost for the services because that comes out the Department’s budget. A budget is put up when there is an add-on from the Department of Military Veterans. On the 216 that will be constructed, extra money will come from the Department Military Veterans as a top up. The Department’s focus is on the top structure so it is added on the services and that is why there are zeros.
On the 85 000 jobs, the Department is following the Expanded Public Works Programme (EPWP) principles on job creation. The Department is averaging 15 000 jobs per year created on each site. The challenge is these are construction jobs which are not permanent. A formula is used; it takes eleven persons to build a house at various stages. The total number of people to build a particular house is multiplied by X number of houses to come up with the number. Also, part of the responsibilities of the contractors is to report the number of jobs they have created. The Department feels that it is a realistic figure. There are other jobs that are created but the Department sticks to the EPWP principles.
Around beneficiary administration, the Department tried a few years ago to say that it is the municipalities responsibilities but realised the beneficiaries were being hurt, so a directorate of beneficiary administration was created. Secondly was that no house will be constructed if the beneficiary list did not come with a council resolution. The gap is when people actually move in to the houses because nobody monitors when they move in. An allocation committee has been established. This committee does not involve councillors but is made up of officials from Human Settlements, municipalities and the community. When houses are handed over, verification takes place to ensure that it is the right beneficiaries that actually move in.
The Department cannot chase people away that invade land but there are different types of land invasion. A typical example is at the airport in Buffalo city. People stole land and built themselves proper houses. It becomes a dilemma how to deal with people who have stolen land and built proper houses on that land. The airport need this land and they want to demolish the houses but the Department is telling them to ensure that this forms part of the system instead of demolishing it.
On payment of small operators in Chris Hani, the problem of emerging contractors is that they want to pay their workers on a Friday. A bridging finance company has now been brought in to pay those who want to pay their workers on a Friday. Their numbers also keep swelling, in Nelson Mandela 700 contactors met the Department yet there were only 88 contractors known to be on site. They said some of them are working and others want to work. There is need to empower emerging contractors.
Mr Chainee added that the National Department has come a long way with the Eastern Cape and have had robust discussions with them. There has been improvement in the first quarter and the USDG issue is being managed. Nelson Mandela is not a problem because they are performing well, but Buffalo City has experienced problems, but there is a new city manager. The DG has arranged assistance for Buffalo City, not only on expenditure but also on prioritisation. The overspending has made the National Department to make some changes, especially of moving personnel around, and this will ensure that the problems do not re occur.
The Chairperson thanked the officials and said the Committee was comfortable with the presentation but will monitor things closely. From where Eastern Cape as a province is coming from and now, there is a big improvement. Issues raised during oversight visit last year are being dealt with.
The meeting was adjourned.
Mafu, Ms NN
Bam-Mugwanya, Ms V
Bara, Mr M R
Khoarai, Mr L P
Malatsi, Mr MS
Mmemezi, Mr HM
Mnganga-Gcabashe, Ms LA
Mokause, Ms MO
Nkadimeng, Ms MF
Sithole, Mr KP
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