Human Settlements Quarter 3 performance; North West Department recovery plan

Meeting report

Third Quarter Performance: DHS

Mr Neville Chainee, Deputy Director General (DDG): Human Settlements Planning and Strategy, and Chief Operations Officer, Department of Human Settlements (DHS) reported that various stakeholders had been consulted on the development of the Red Book. Their comments had been consolidated for finalisation and the first draft chapters were in compilation. The research conducted to support policy developments was not in line with the research agenda outlined in the technical indicator description, so it was not consistent with the planned milestone.

The Department’s interim financial statements had been prepared in accordance with the legislative requirements, and 99% of all valid payable invoices had been settled within 30 days. The approved risk management plan had been implemented, and implementation of 71% of the human resources plan had been achieved.

Of the 657 funded posts, 600 had been filled, and five senior management positions were in the process of being filled. The filling of positions at the lower levels was being done in line with budget availability, reprioritizing in accordance with the level of significance and the budget constraints.

The Property Practitioner’s Bill had been presented to Cabinet in November 2017, and had been approved for submission to Parliament. He reminded the Committee that the Home Loan and Mortgage Disclosure Act (HLAMDA) Bill had also been presented to the Department of Public Service and Administration (DPSA), and a preliminary legal opinion had been obtained from the Office of the State Law Adviser. A draft Human Settlements Development Bank Bill had been completed and a draft policy framework for human settlements legislation on amending the Housing Consumers Protection Measures Amendment Act had been developed. The drafting of the Human Settlements Bill that would repeal the Housing Act had commenced.

The DHS was awaiting the approval of the Minister of Finance, in terms of Section 54 of the Public Finance Management Act (PFMA), for the integration of the National Urban Reconstruction Housing Agency (NURCHA) and the Rural Housing Loan Fund (RHLF) into the Department, but this had not yet been granted. An interim consolidated organogram structure had been developed to create order and functionality, to allow the business of all three entities to continue while awaiting approval. The three entities were now housed in one building and operational matters related to information communication technology (ICT), communication and human resources were receiving attention.

A total of 587 youths had been trained on artisan skills through the National Home Builders Registration Council (NHBRC), and the provinces that had benefited from the programme included Mpumalanga, Eastern Cape, Free State, KwaZulu-Natal (KZN), Northern Cape and North West. 230 practitioners were trained on the land and property spatial information system. And that a total of 73 students were supported through the Departmental scholarship programme.

The Department identified areas that required improvement, and mentioned the lack of compliance to the DPSA’s human resource statutory prescripts. They also raised concerns on the under-achievement of the audit, anti-fraud and risk targets aimed at improving governance; the title deeds restoration programme and the transfer of new title deeds from 2014; upscaling the affordable rental programme; the improvement of services and infrastructure in informal settlements upgrading programme; and the provision of technical support through the national upgrading support programme.

Discussion

Mr M Malatsi (DA) commended the Department for being able to settle invoice payments within the prescribed period of 30 days. He asked what had contributed to the spike in the amount related to expenditure on venues, as he found it a bit of a discrepancy.

Ms N Hlonyana (EFF) asked when programmes that had not yet been formalized, would be finalised.

Mr M Wolmarans (ANC) referred to the Department’s performance on the informal settlements upgrading plan, which he viewed as worrisome. While the Department was doing well on average, the metros were dragging it down. There was work to be done, especially where the restoration of title deeds was concerned, and the problems were at the provincial level. The Department needed to determine what it was going to do. Its achievement with the 30 days’ turn-around time was commendable.

The Chairperson said that as the government had committed to paying 100% of invoices within 30 days, she wanted to know why the DHS had made only 99%. She also needed clarity on the reports. She mentioned that there were informal settlements that were not doing well, and put it to the DDG that if he could not deliver on the informal settlement upgrade, the Department would not accept this, as it had been going on for the past three years. Improvement was needed in this area. She described the mining towns, particularly in Gauteng, as being the worst when it came to informal settlements, and wanted to know from the Department what interventions it was implementing to ensure that the situation was being turned around.

DHS’s response

Mr Mziwonke Dlabantu, Chief Executive Officer: NHBRC, assured the meeting that the Department was  doing its best.

The challenge resulting in the 99% payment of invoices, was that the invoices that came via a courier still had to go to Heads of Departments (HODs), thereby causing a delay in the processing of payments.

The discrepancy regarding venues and facilities had been mainly in respect of the Govan Mbeki summit. The Department often planned events, and sometimes they would not take place.

Ms Busisiwe Nzo, Council Member: NHBRC, dealt with the questions posed on provinces and metros. She said the Council looked at the plans of the metros and interrogated them. It engaged with the provinces over their plans and expenditure, and even last week they had had a session with the metros focusing on the second quarter. By the end of the financial year cycle, it would be looking at their expenditures.

She mentioned that KZN was one province where the NHBRC had experienced a challenge. This was with the Ethekwini municipality. The Council supported all the metros, and sat with them to assist with their recovery plans. It had been unhappy with the North West province, and the DDG had intervened and inquired what the province was going to do for their recovery process.
 
Mr Chainee concluded the Department’s response, saying it would be hard to meet the target on title deeds, but that they would try their best to achieve it. On the filling of the posts, there were 52 posts and only 32 of those were going to be filled, and the DHS, together with DPSA, was working on this. He concurred with the Chairperson on the informal settlements in the Gauteng mining towns, and expressed his concern also. The DHS had been to intervene, and it was an issue that was creating deep frustration within their Department.

North West DHS recovery plan

The Chairperson said that when the Department had conducted oversight at North West Province, there had been an issue with their performance progress, so they had been invited to make a presentation to the Committee.

Mr Ephraim Motoko, Head of Department (HOD) Local Government and Human Settlements, North West Province, said the intention of the presentation was to brief the Committee on the challenges faced by the province in meeting its financial and non-financial targets from April 2017 to 31 January 2018, and also to present the recovery plan that the province had developed.

He said that by the end of January, expenditure had reached R1 615 739 901, and as the annual budget was had been reduced by R300 000 to R2 079 679 260, there remained a balance of R466 939 359 to be spent during the final two months. The province had delivered 5 285 of the target of 10 476 housing units, 3 050 sites of the expected 4 442, and 2 924 title deeds had been registered.

The province had experienced a slower housing delivery than planned due to:

• Poor performance by contractors and developers, and a lack of capacity;
• Delays in procurement;
• Lack of serviced sites from municipalities;
• Shortage of beneficiaries;
• Community unrest;
• Municipalities that did not have functional Spatial Planning and Land Use Management Act (SPLUMA) tribunals, leading to delays in township establishments, which had also affected the title deeds restoration programme.
• He provided details of the financial performance from April to March, the expenditure summary and the delivery summary on a month to month basis.

There were key interventions, which were projects with a potential to deliver. At Stella there were 700 sites to be serviced, which would be a quick process to install internal services infrastructure with machinery. The Mafikeng Rooigrond 1 000 top structures would enable reporting on non-financials when the bulk infrastructure was commissioned. At Rustenburg Bokamoso, four contractors with the capacity to develop a combined 1 600 units were being relocated to ready areas like Madibeng and Moses Kotane villages, and Kgetleng Derby and Borolelo, which were still under mining towns and would not reduce figures under the programme. The entire costing was R171 million, including the standard geotechnical allowance.

For the financial year 2018/2019, the Bokamoso 1 600 units would be implemented by the Housing Development Agency (HDA).

A North West delegate reported that the Mafikeng Community Residential Unit (CRU) had been allocated to tenants, but most tenants had not taken occupation yet due to repairs. Matlosana CRUs had been handed over to the North West Housing Corporation, which was currently handling the allocation to tenants. The Corporation had already allocated 21 units and was currently busy with the process of allocating the remaining units.

Mr Motoko said the Department’s relationship with the NHBRC had improved, as they had held a joint training session of inspectors. They had agreed on a joint programme to visit municipalities to engage on the way forward regarding the undevelopable areas. The Member of the Executive Council (MEC) and the NHBRC’s chief executive officer had scheduled a meeting for Tuesday, 27 February.

He concluded that the province was confident that it was going to recover in 2018.

Discussion

Mr L Khoarai (ANC) said he found the statement in the presentation about the “lack of beneficiaries” odd. His other concern was the “poor performance by contractors”, and he reminded the North West delegation about their judgement when sub-contracting contractors. He stressed the importance of the credibility of contractors, and wondered the kind of measures the Department used. He wanted an update on the electrification of CRUs in Mafikeng and Matlosana, as they were supposed to report on them.

Ms Hlonyana wanted to know how the team could come and present such a report, as she had found it flimsy and irresponsible. She also wanted to know about the progress on the military veterans’ programme, and why it was taking so long, as these were important people in the country. The team should give a commitment on what they would do if they did not deliver.

Mr M Manana (ANC) said he had found the presentation to be problematic. He asked about the “shortage of beneficiaries” and if there were no people in North West -- he needed clarity on that, as it contradicted the figures shown by the presenters.

Mr M Shelembe (NFP) wanted to know about the problems with contractors -- was it a case of contractors not doing the job, or that they were poorly qualified. He also questioned the lack of beneficiaries, and whether a needs analysis had been done by the Department.

Ms V Bam-Mugwanya (ANC) asked what the initial target for the military veterans had been in order to gauge progress so far, and appealed to the team to accelerate this programme, as they could not afford to give it a disservice.

Ms M Nkadimeng (ANC) said the background given had been problematic, as it was without an action plan. She wanted to know if there were people employed in procurement, and what the team did when there was lack of performance by staff.

Mr Wolmarans commented that the North West team had either not written their report correctly, or there was something seriously wrong. There were contradictory discrepancies in their report, and he found it confusing. He advised the team not to use numbers if they were not sure of them.

The Chairperson said that when the delegation had visited North West, a recovery plan had been needed. She now needed to hear about the practical assistance that had been given to save the province from their performance problems, and what challenges they were experiencing on the ground.

DHS response
Mr Motoko responded by apologising for not updating the slide so as to avoid confusion. In the case of beneficiaries, it was a matter of updating them on the system, and the other beneficiaries had always not been credible. He said most beneficiaries were on the municipal system, and there was a backlog as far as that was concerned. In the area of Bokamoso, they had been unable to send in contractors as the local people demanded that they be contracted for the job.

One of the mistakes they had made as a province was employing ill-experienced contractors who had not delivered a good job.

Regarding the military veterans, the province was not proud with the developments of this programme, but that they were dealing with it and some of the municipalities were cooperating. They had built about 59 000 units in the past three years, and a small number of these had had to be accounted for veterans, and that had been an issue that bothered them. He had been to funerals of veterans who had passed on without owning property.

They were in the process of registering title deeds. Another problem was the illegal occupation of houses in Rustenburg, which made it difficult to allocate title deeds in some areas. He was concerned that there was a slow movement, and this was due to township development.  He assured the meeting that the programme was currently under way and that the title deeds had been registered and the beneficiaries would be receiving them.

Mr Motoko returned to the matter regarding the beneficiaries, saying that the main reason it took time was due to bogus beneficiaries. They were doing their best to make the process water tight so that the legitimate beneficiaries were awarded houses.

He confirmed that the CRUs were electrified.

Mr Vusi Bidi, Chief Director: Department of Local Government and Housing Settlements (DLG&HS), North West, spoke about the capacity of the contractors. The Department had developed a database, and now they felt strongly that the database had to be updated and reviewed. They had all agreed that the database would not be refined or reviewed, but that it would be started from scratch.

The informal settlements within the municipalities of mining towns in the Rustenberg area needed to be moved, as there was insufficient space. The process had to be speeded up as it was taking a long time.

Mr Lucien Rakgoale, Regional Manager: HDA, referred to the projects that the Department had. It had identified privately owned land, and would be servicing some of these areas. They had identified land around Ventersdorp, and were currently in the process of development planning. They were also in discussions with Lonmin with regard to building in Marikana, where their biggest challenge was electricity.
Going forward, they were looking at all the townships going into the proclamation process.

Mr Chainee concluded by assuring the Committee that the issue of township establishment would be sorted out, as the Department was working on it and had made it a priority. The one issue that needed attention was the inability to deal with communities. He suggested that a group of community-based representatives be appointed so as to have a point of contact where communities were concerned.

The Chairperson said she appreciated the NHBRC and the HDA presentations, but expressed unhappiness with the North West DHS team. She assured them that as long as there were irregularities on their part, they would be regulars in Cape Town’s Parliament, and that they would have to come again in the next quarter.

The meeting was adjourned,