Human Settlements Grant 2017/18 Quarter 4 performance: hearing, with Deputy Minister

Meeting report

Officials absent: Members walk out

The Chairperson asked whether there were written letters of apology from the Members of Executive Committees (MECs) of the provinces, as the Committee had not received any and the MECs were not present. He emphasised that the MECs were the political heads and the HODs were the provincial heads and their presence was necessary for such meetings.

Mr Thando Mguli, Head of Department (HOD): Western Cape Human Settlements, said that his MEC had sent an apology.

The Chairperson questioned who this apology had been sent to, as the Committee had did not received it.

Ms Nomfundo Ngwenya, Deputy Director General (DDG): Gauteng Human Settlements, Strategy and M&E, said that she had noted an the apology had to be in written, and informed the Committee that her HOD had been hospitalised.

The Chairperson said that the absence of MECs and some HODs was very unfortunate, because they were needed at these meetings to account.

Mr M Shabangu (EFF, Free State) said that if the MECs of the provinces were not here, then none of them should be allowed to present their submissions, because they knew the process.

The Chairperson said that any Member who wanted to give an input on this issue may speak.

Mr L Gaehler (UDM, Eastern Cape) said that the provinces should go and not present, because they were undermining the Committee.

The Chairperson said that an apology from the MEC of Limpopo had just been received.

Mr M Monakedi (ANC, Free State) said that the attendance of political heads was very important at such crucial meetings. He proposed that Limpopo be allowed to present.

Mr F Essack (DA, Mpumalanga) said various precedents had been set in the past, and the Chairperson had himself expressed how the Committee viewed those departments that came and reported. They could not tolerate being sent apologies via whatsapp or sms. at the eleventh hour. These provinces were responsible for reporting to this Committee, and the Committee had to take the reports to the Minister. He felt personally undermined and insulted and proposed, that they should not be allowed to continue. At such a meeting, the Minister’s presence was crucial and if the Minister was absent, then the meeting should be rescheduled. With regard to Limpopo, it was shocking that their political heads were not here, considering the current state of the province.

Mr L Nzimande (ANC, KZN) said that while he concurred with the concern expressed by his colleagues, they were an appropriation committee and did not take kindly to fruitless expenditure. On principle, the Committee did not support wasteful expenditure, so it could not spend the money and then send them away without even noting the content. They should be factually guided by the presentations and allow the accounting officers to account, and then still have the MECs and HODs to come at another time if they were dissatisfied.

The Chairperson apologised, saying that he made a mistake as the Deputy Minister was present, and invited her to make a contribution.

Ms Zoe Kota-Fredericks, Deputy Minister: Department of Human Settlements (DHS), said she wanted to record her presence. This meeting was crucial, so she felt that she had to accompany the Department.

The Chairperson apologised to the Deputy Minister again. He said that the absence of MECs could not happen again, and if they were not able to attend, then the Committee should be made aware well in advance. It was very difficult to reschedule meetings, as Members had other commitments. He had listened to the Members, and as they did not support wasteful expenditure, the provinces would be allowed to present. However, they were never to do this again.

Mr O Terblanche (DA, Western Cape) said that he was very uncomfortable with the situation because there was a province that had not even brought an HOD. He was worried that they would not have a meaningful meeting and should rather schedule to a time when the necessary political heads could honour the meeting.

Ms Ngaka Dumalisile, Limpopo Department of Cooperative Governance, Human Settlements and Traditional Affairs, HOD, said that Limpopo was represented by the accounting officer of the department.

Ms Ngwenya repeated that her HOD had been hospitalised, and that that was beyond her control.

The Chairperson said that he also felt uncomfortable, but he did not want to send people home and waste money.

Mr Shabangu, Mr Gaehler, Mr Terblanche and Mr Essack walked out of the meeting.

Human Settlements Development Grant: National Treasury briefing

Ms Ogalalatseng Gaarekwe, Chief Director: National Treasury (NT), said that most had provinces spent 100% of their Human Settlements Development Grant (HSDG), except for Gauteng, Northern Cape and North West.

The spending patterns were highlighted as a challenge in terms of what provinces were spending on average compared to how much they spent in March. However, the grant’s spending trend had improved from previous years. With regard to performance, most provinces had not met their targets for serviced sites, and there had been under-achievement in the number of houses delivered. Although the grant had grown significantly over the years, there was no correlation between its growth and the units built on the ground.  

The conclusions by National Treasury were as follows:

• Poor alignment between cash flow projections and allocations in the business plans, resulting in some instances in huge cash amounts in provinces that were transferred to agencies.
• Provinces spending on programmes that were not planned for, while underperforming on planned programmes, which seemed to be a planning challenge.
• Labour unrest and contractors not being paid on time, which caused projects to stall and contractors to leave site before the contract was complete.
• Poor contractor performance resulting in projects being delayed and poor workmanship. Some provinces were still spending funds on rectification of units.
• The sector had stopped and reallocated grant funds to provinces in four of the past five years. Were the allocation criteria taking into account the capacity of the provinces, or the lack thereof?
• Almost R1.9 billion had been transferred to the Housing Development Agency (HDA) by provinces in March. It was unlikely that the funds could have yielded units in the same month. More clarity was needed on what the funds had bought; how much was spent on the Agency; when the units would be delivered. The provinces needed to apply for rollovers and convince NT that that money was committed.
• While the number of serviced sites had increased between 2013 and 2018, the number of houses built had decreased over the same period by around 19%.  This needed some explanation, given that the budget allocation over the same period had increased by around 19%.

The Chairperson said that pages 13 and page 14 (refer to document) provided a summary of all that was in the document, and that was what theprovinces were to reply to. They were to say what their action plan was.

Human Settlements Development Grant: DHS briefing

Deputy Minister Kota-Fredericks emphasised that what they wanted to know was whether the Government was getting value for money; whether the money transferred to the provinces was being used to build units to provide shelter for people.

The Chairperson said that the DHS was one of the priority departments, and and received priority allocations in terms of the fiscus.

Mr Mbulelo Tshangana, Director General: DHS, said that the Department’s presentation covered eight areas of focus, and the issue of transfers raised by NT would be addressed. They had invited Mr Pascal Moloi, Chief Executive Officer (CEO): HDA, but he was unfortunately not present. However, the senior officials of the DHS were  present as a team, and they would answer all the questions posed to them.

Ms Funani Matlatsi, Chief Financial Officer (CFO): DHS, said that the request from the Committee was very clear -- that they wanted a hearing on the transfers that had been made to the provinces and the expenditures related to them. There also an emphasis on the rollovers, and the presentation covered all of this.

The Department was not in a position where they could just transfer funds to provinces without the business plan being approved; and before they could approve the business plan, there were certain processes that they needed to follow. These mostly included the readiness of the project, and as a Department they have developed a project readiness matrix to determine whether provinces were ready to absorb the projected transfers that they would be receiving. If they were not satisfied, they alerted the provinces and allowed them to amend their business plans to ensure that the projects that they had planned would yield the desired results, in line with the medium term strategic framework (MTSF) targets.

The Division of Revenue Act (DoRA) required that the approved business plan be in accordance with the approved allocation, and the allocation was granted through the Ministers and Members of Executive Council (MINMEC) and NT. This formula provided adequate housing and also took into account the population size of the province. When the business plan is approved, they come with a cash flow projection, and this gets approved by NT and the DHS in line with the set targets. It gets transferred to the provinces in the third week of April, more or less, after having reviewed payments that did not go through in the previous financial year (accruals) and also accounting for projects administered by the end of March.

Where there is under-performance, the DHS provides support to the provinces and in instances where they do not find comfort and realise that the provinces would not be able to spend their entire grant, having determined their recovery and turnaround strategies, they then resort to the last option which was to withhold and stop, redirect and transfer money to those provinces which were eligible to absorb the additional allocation in terms of the DoRA and through NT.

She said that money was transferred to implementing agencies, and the bulk of the money had been transferred to the HDA. There had also been money expended against the mining towns.

The money transferred to the entities and the metro municipalities from the HSDG to the agencies, gets monitored as well by the office of the CFO and the Director General (DG) against the implementing strategies that the provinces had committed themselves to.

Mr Tshangana said that there were four provinces that had ended the year without spending 100% of their allocation, and those were the same provinces that had experienced the reallocation. Three of them -- Gauteng, North West and Limpopo -- had transferred money to the HDA. In all of these cases. the contractors were on site, therefore the transfers were linked to the projects. In Gauteng, they had transferred money to the HAD, the implementing agency for Gauteng, for a mega catalytic project, and had also transferred money to their metro. The other province, Northern Cape, had also not spent 100%, but that money had been committed, so they had applied for rollovers.

The ring-fenced allocation for the mining towns was meant to leverage more funding from the mining companies. The mining companies had signed social labour plans with the Department of Mineral Resources (DMR), and what they wanted to do was to partner with the mining companies themselves so that they could provide human settlements in the areas where they were operating. There were mining companies that had come to the table already, and the partnership arrangement there was 70/30, with the government contributing 30% and the mining company 70%. 

Ms Kota-Fredericks said their concern over the transfer of funds to the HDA had been clarified, because that money would be linked to projects so their fears were no longer the same. They would like the Committee to continue holding them accountable in respect of transparency regarding that funding.

The other concern was the issue of mining towns, and this issue needed to be addressed because many mining towns were in distress. This was why the government had allocated R1.6 billion for this kind of work, and working with the private sector would improve the situation.

Discussion

Mr T Motlashuping (ANC, North West) said that comparing the expenditure pattern of Gauteng and the North West, Gauteng was sitting at 54% and North West at 57%, so relatively speaking North West was performing better than Gauteng. If one went deeper, however, North West did not have a metro to which it could transfer its funds, like Gauteng. He wanted to know whether Gauteng’s 54% was inclusive of the transfers that they had made.

He queried the expenditure figure for the Eastern Cape, and wanted clarity on the provinces that had not spent all of their allocation. He saw six in the document, and the presenter had said there were four. He wanted to understand the logic behind taking more from the North West (R300 million) than Gauteng (R150million), whereas Gauteng was grossly underperforming compared to the North West, and especially because North West was a small and rural province compared to Gauteng. He wanted to know whether the rollover of R192 million from North West had been approved or not.

Mr Nzimande said NT had indicated that there were clear problems with planning, and from the Department’s presentation, it did look like this was the case, based on the slow return of money where provinces were still under-spending. He wanted to know what the approval process consisted of, because there should be a demonstration of capacity and technical know-how from the provinces. What went into the planning and approval process -- were the strengths of the plans not assessed?

It was unfortunate that the CEO of the HDA was not present, because it spoke to the capacity and planning that was in question, and their responsibility as the implementing agency. If one had the responsibility of being an implementing agency, one should be available for questions. The role and mandate of the HDA should be subjected to scrutiny.

Mr Monakedi wanted clarity on the issue of provinces spending money on programmes that were not planned for, and under-spending on programmes that were planned. This was especially so, considering the fact that the Department had said that they assessed and approved business plans before allocating the money. There was also additional support that the Department gave to the provinces, but despite all that this, the challenge persisted. He wanted to know why this was the case.

He wanted to know whether the performance of an HOD was affected by the performance of a contractor, and if there was poor performance from the contractor, whether that was factored into the performance contract of the HOD.

He said that Dubatse in Limpopo had not been mentioned in respect of housing allocations and wanted to know why that was the case, considering that it was also a mining town.

The underperformance in the Northern Cape was very serious. What were the causes, and what intervention methods were being taken to address these issues.

Mr Motlashuping said that business plans were submitted annually and were part of the strategic plan of that province, and provinces knew how government was spending, based on a three year plan. A business plan for this year should therefore not deviate that much from the previous year’s, and the previous year’s had been approved. In North West’s business plan submitted this year, cuts had been made, but none had been made in the previous one. He wanted to know the reasons behind this decision.

The Chairperson said that in the discussions they had had on the library grant, education and infrastructure spending, the issue of contractors and business plans had come up.  A diagnostic analysis needed to be done on each of the provinces to get a deeper understanding of the issues of under-spending, because this was leading to protests. They could not continue like this.

What was the action plan to assist poor performing provinces by the Department? Did the people in the provinces know what to do, because then expertise was needed? Success was a continued investment in excellence. Monitoring and evaluation needed to be strengthened and filtered down to regional levels -- it was located in the Premier’s office in the province -- because intergovernmental relations were key.

DHS response

Ms Kota-Fredericks responded that she welcomed the request for a diagnostic analysis to evaluate the provinces so that this scenario was avoided every year.

She said that it was clear that the Committee Members were worried about under-performance, particularly the rollovers. Under-spending meant that housing opportunities were being lost and therefore beneficiaries were at a disadvantage, and that was a matter of concern to the National Department. The issue of the four provinces that were under-spending was also of concern and in fact, the Gauteng situation was problematic. The DG had actually requested R800 million but had been told they could only do R150million, so when Gauteng had said that they could not spend their allocated amount, it was not a shock as they had seen it coming. The difficulty with Gauteng, in particular, was that they carried the weight of the Department in terms of the number of housing units. They were given the biggest budget, but they were underperforming.

The perception that the money in the North West was cut had been based on the political situation, was incorrect.

Mr Tshangana said that in all the under-performing provinces, there was a correlation between poor performance and institutional stability at the management level. The North West had had different MECs and had changed HODs in the past four years. That was not under the control of the DHS, and all they could do was to make recommendations for the HOD vacancies to be filled. The same applied in Gauteng; they had had five HODs in the past four years. Limpopo had also had five different HODs. In all the poor performing provinces, there had been changes at the accounting officer level.

The opposite was true at provinces that were performing well, and had sustained their performance over the period,. The Eastern Cape, for example, had had the same HOD for five years and they were exceeding their targets. The same applied to KZN. In provinces that that were performing well, there had been stability at management level.

With regards to the business plans, they applied a tool called the Project Readiness Metrics to all business plans. Gauteng had one of the biggest developers, and at the beginning of the year some of the contractors on site had themselves been frustrated by the quality of decision-making at the management level. They may have had business plans approved, but then the quality of decisions made in implementing those plans affected the process. In organisations that were not stable, the decision-making was evident in the quality of business plans that they received.

North West had failed to perform in the previous year, and the DHS had spent more time engaging with that province than any other. The HOD had confirmed that the biggest mistake they had made in the North West to think that they would spend the R2.2 billion, using what they called the Villages, Townships and Small Dorpies (VTSD) programme. It was a brilliant programme, but it needed to be structured in such a way that small contractors were supported. There needs to be a package of support, and North West did not have that. As a result, they ended up transferring money to the HDA because of under-spending. They took the amount of money from Limpopo, based on their projections as to how much each province may not spend.

They had been too optimistic with Gauteng, because they had big developers, but the quality of their decisions was making made it impossible. In the case of Gauteng, there were regional offices and a head office, and the communication between the two had been problematic. As a result, MINMEC had passed a resolution that the National Department needed to intervene in Gauteng as a matter of urgency. They had agreed to deploy ten people to assist. The two areas of concern were supply chain management (SCM) and legal services, and such personnel would be provided by the Department.

The Chairperson asked whether they did not have those people, as capacity was an issue.

Mr Tshangana responded that their intervention was a short term intervention to stabilise the organisation so that they could support the HOD. The same was being done in the North West. MINMEC had passed a resolution for the Department to support North West, long before the s100(1)(a) intervention. The biggest challenge in the North West was to get big contractors, because they needed to recover. The panel of their contractors had not been utilised, so their starting point in getting the organisation to perform was to fix their supply chain services. The HOD had agreed, and they have a plan which they had submitted to the Ministerial Task Team (MTT). which had accepted it.

Limpopo was stable now, and they would be able to turn the corner. Their graph was going up, even though they had transferred money to the HDA. They had transferred the money for contracts, where the contractors were on site. Limpopo was thus no longer such a concern. The two high-risk provinces at the moment were Gauteng and North West. They would stabilise those provinces and they would perform. The problem was leadership at management level.

The business plan process was fairly straightforward. If there was an amount that was not committed in the business plan -- which was the case with North West -- that money was at risk. The provinces were told to explain why the money at risk should not be shifted to provinces that would commit it. The business plan was assessed on a project by project basis to determine the state of readiness for each project. If the project still needed to go through approvals, they knew that they were not going to deliver on that project. Provinces were always advised to sort out all their procurement processes before the start of the financial year. There was no conspiracy theory around it -- it was technical and all the provinces were aware of the fact that if their projects were not ready, they would not get the money, and that money would be shifted to another province.

The HDA had the capacity, with panels of contractors, professionals and managers, but it was not at the level that they wanted it to be. The Minister had said that the HDA was meant to be the developer of choice for the government, but at the moment it was not. They therefore got uncomfortable when provinces transferred money to the HDA at the end of the year. If they had to transfer money to the HDA, they must do it at the beginning of the year.

On a quarterly basis, they met with provinces and reviewed their performance. They also wrote to HODs to enquire why they should not be held accountable in terms of their poor performance and they “cc” the MECs, because the performance agreement was between the MEC and the HOD. Therefore when a province was not performing, it was brought to the attention of the MEC. The MEC and the premier make the decisions, and the DHS assists them.

There had been less money in 2016 and more units were delivered, but this year there had been more money but fewer units were delivered. This year’s performance had ended up with R3 billion unspent, and that money could have provided more than 18 000 housing opportunities. The problem had been that the money was there but it did not perform, hence the lower numbers and why the money ended up being transferred.

He said that the action plan to assist the provinces was a credible one, and the Gauteng and North West HODs could attest to that. The same applied to Limpopo -- they had improved, but they were still catching up.

The Chairperson said that the provinces had to respond to that, and state whether they had a capacity problem or other issues.

Ms Matlatsi said that the figure for the Eastern Cape under-spending had been R1 000, which was immaterial. The R192 million that the North West had in terms of the allocation was the approved rollover that could not be spent at the end of the 2016/17 financial year. The amount they had in this financial year included the rollovers.

National Treasury’s response

Ms Gaarekwe said that she had been mostly covered by the DG regarding the under-spending questions raised. The issue was that provinces were spending on programmes not planned for.

The rollover for the North West and most other provinces had been approved. They had taken note of the diagnostic report suggestion, and would write that report.

The Chairperson requested the presenters to focus on what the NT had presented in slides 13 and 14 and respond to those concerns, and indicate what their action plan was to address the challenges.

Limpopo Human Settlements Department

Ms Dumalisile said that they had done their own diagnosis when preparing a mitigation plan when the money was going to be withdrawn. They had had to do it for the second time, because with the first plan they were not convinced that the Department would recover. They had started seeing progress after implementing the second one.

They had not performed well in respect of the military veterans’ programme, but they had remedied the situation and were expecting a positive turnaround by this financial year.

The key challenges leading to their poor performance were as follows:

• A contractor database with no bias towards built industry prescripts. The database was meant to last three years, but the contractors did not perform and were unfamiliar with the terrain. The contractors started ceding their contracts to one big company which was later liquidated. That had caused serious challenges, as it had brought everything to a standstill. They had since done away with contractor to contractor cessions.
• Late appointment of service providers.
• Late approval of developmental areas.
• Contractor to contractor cessions leading to poor performance.
• Non-application of consequence management for the non-performance of contractors
• Inadequate contract management and planning in geotechs and beneficiary management. They had since changed their supply chain committee and were seeing improvements.
• Low staff morale resulting from abrupt staff movement and poor communication.
• Slow delivery process of title deeds.

The recovery plan to address the challenges focused on:

• Increasing HSDG expenditure through the appointment of HDA high capacity contractors.
• Improving contract management –meeting with poor performing contractors to assist in addressing their issues, such as capacity and resource mobilisation (through cessions)
• Improving contractors’ performance and applying consequence management. They regularly met with contractors to assess performance.
• Provision of additional capacity and support to specific directorates
• Accelerating upply chain processes

In respect of title deeds, the interventions include:

• Meetings arranged with affected municipalities and a follow-up to get the clearance certificates signed.
• Ward councillors and committees were assisting in tracing approved beneficiaries, and announcements would be presented in three languages on the radio.
• Meetings had been arranged with affected municipalities to confirm the status of the signing of transfer documents to be submitted to the state attorney.

They had developed a strategic plan as an intervention to address the challenges they faced. There had been progress since the implementation of the recovery and intervention plans.

Gauteng Human Settlements Department

Ms Ngwenya said that the province had identified the following issues:

• Planning for project implementation.
• Supply chain management.
• Contract management.
• Payment of contractors.
• Project management capacity; the structure did not support the delivery mechanism.
• Public participation, engagement and community relations.
• Institutional capacity.
• Monitoring and evaluation.

The Chairperson said that if they spoke about progress, they must be specific as to what that progress was.

Other challenges they faced included:

• Misalignment of plans. The province needed to align with municipal prioritisation.
• Bulk infrastructure.
• Misalignment of financial years between the province and local government -- municipalities in particular.
• Late signing of implementation protocols (IPs) by municipalities.

The Chairperson referred to a visit to Diepsloot, where a human settlement had been built near a place that had a bad smell, and wondered who could have approved such a project. He said that this showed the importance of planning.

Western Cape Human Settlements Department

Mr Mguli said that Department had spent 100% of their budget and had exceeded their targets in the number of the sites delivered. They had underperformed in terms of the housing delivery, however. The under-performance was attributed to the instability found at various construction sites. Overall, they had not under-performed, as their under-performance had been in only one area.

They had done relatively well in terms of the expenditure per district, and in areas where there was under-performance, they had reallocated the money and used it elsewhere where projects were running but there had been no absorptive capacity to pay.

Their priority programmes included upgrading informal settlements; new individual units; social and rental housing; the Finance-Linked Individual Subsidy Programme (FLISP); military veterans; and catalytic projects. They outlined their performance in respect of these programmes, and the total expenditure to date.

The social and rental housing programme had now been made central, and they no longer ran it -- the Social Housing Regulatory Authority would implement the rest of the targets.

FLISP was still maintained within municipalities and provincial departments, and this programme had a lot of encumbrances although it was the best programme to assist people in the gap market to get housing. The problems experienced in this region were the non-qualification of beneficiaries, and that developers were building houses that people could no longer afford. Therefore the province had decided to do it themselves. Military veterans’ houses were being occupied, and others were currently being built. They would have completed their MTSF commitment by not later than the end of December 2018.

They were doing well with title deeds, and were comfortable that they would achieve all their set targets.

The challenges that they faced were as follows:

• The restoration of institutional housing. This restoration needed to be done for people who were earning from R3 501 to R7 000, to enable them to get into a house and pay it off over time. This needed to be restored for that sector, otherwise they may never get housing.
• Bulk infrastructure for catalytic projects. They needed infrastructure for their very big catalytic projects. There should be a grant for this, outside the metros.
• Accounting for title deeds issued. Administrative burdens had increased. The national DHS used to have a “dump” system and provinces were able to check which title deeds had been registered. This needed to be brought back, as it worked very well.

Discussion

Mr Motlashuping said that as a Committee, one of their responsibilities was to follow the money. If the accounting authority was not there, it became difficult and he was unsure of the presenters’ capacity. People must take responsibility and account, and people brought to the Committee had to be able to answer and account.

Yesterday, the Committee had had the Western Cape’s provincial Treasury present, and their MEC had acknowledged that they had not delivered in terms of housing for the previously disadvantaged,  citing Langa as an example. The presentation had given a perfect picture, whereas the provincial Treasury had said that there had been poor service delivery. He wanted to know if they were being misled, because he did not have the evidence in front of him.

Regarding housing for military veterans, the target had been 93 and they had delivered 93, but looking at the number of ex-combatants and the demand for housing for military veterans, the number should not be 93.

Gauteng had given a qualitative performance report, and because it was housing, it should be quantative, as it involved the number of units to be built. That was their key performance plan, and the plan had to include how many houses they were going to deliver and what they had failed to deliver. He was not interested in the narrative story they told -- they wanted the output in terms of housing. They have failed to deliver in terms of the report they have received, and therefore they should have a quantitative action plan.

Mr Nzimande asked what the position of the National Department was in terms of the dump system raised by the Western Cape. From the NT allocation point of view, emphasis had been placed on the allocation of title deeds, so there was a concerted focus on title deeds. Would the new strategy of registering them not have an impact on them knowing that the money allocated to title deeds carried value, and that it was effective?

He wanted more detail and clarity from the Western Cape on their submission that institutional housing should be restored, and whether the military veterans’ housing figure  was the total bulk of applications for military vets housing received, or if it was just a target set. Their HOD had mentioned lower than 93% performance on some projects, and had said that the lack of performance had been due to instability, but had not explained what that instability was.

Money had been transferred to the HDA due to sites not bought, and they must provide an explanation for this. The Western Cape had to do adjustments to their budget year in and year out because of fires and other natural disasters affecting informal settlements, therefore the role of Human Settlements was very critical in the Western Cape.

With regard to Gauteng -- to emphasise the point about MECs -- the Gauteng MEC was new and should have been present to account. What they were presenting was the role of the Inter-Governmental Relations Framework (IGR). They had been referring to the missing alignment on financial years, and the missing alignment on spatial development frameworks (SDFs) with municipalities. What was ironic was that the Gauteng Human Settlements and Local Government Department were together, under one MEC. Yet here there were issues affecting one wing, and they were under one political authority. The MEC’s presence was key to this part in particular, because the political authority would have given them their position on how they were dealing with this problem. Misalignments were key issues in spending and the MEC should have been here to answer what arrangements were there to remedy them, as this was a policy matter.

He wanted to know what the state of vacancies was in the areas of project management and planning. Were capacity issues due to the lack of warm bodies and if so, what plans were there to resolve these issues?

Gauteng did not provide detail on what exactly the issues were and how they plan to remedy the situation, and as a Committee they needed to ensure that the money was safe and was used for its purpose.

Mr Monakedi wanted to know whether housing had been provided for the mining town of Dubatse, in Limpopo. He was impressed with the interventions adopted in Limpopo, and hoped they would ensure that they were implemented to the fullest, especially in ensuring that the right people were appointed. This issue of Limpopo losing money every year should then be a thing of the past.

There had been numerous protests over housing/service delivery in Gauteng, yet the province was allocated enough resources to respond accordingly and attract people with skills to address the issues of housing. Looking at the next financial year, he wanted to know what plans they had put in place to address these issues.

The Western Cape’s performance in terms of serviced sites stood at 123%, and he asked whether this had been achieved with the same resources or if they had had to source resources from elsewhere to ensure that they performed at that level. He needed to be sure that this had not impacted negatively on other aspects where they had not delivered.

There should be a response from NT on the issue of the grant for bulk infrastructure, raised by the Western Cape.

Limpopo’s response

Ms Dumalisile said that the Dubatse matter had been forgotten when they were presenting. They had bought land around the town, and were busy with bulk infrastructure there.

Gauteng’s response

Ms Ngwenya said the quantitative information was available in the presentation, but the Chairperson had directed them to speak only on their action plan. The necessary details were available from slide 11 onwards.

Regarding organisational communication, she had taken note of the seriousness of the attendance of the MEC.

The department had split from Cooperative Governance and Traditional Affairs (COGTA), and had become COGTA and Human Settlements. That had not been done scientifically, and these were the effects of it. What the department had done to enhance project management capacity was to enrol personnel in a course at Wits University, as they had to be trained. An Infrastructure Delivery Management System (IDMS) aligned process was needed where they capacitated, using a structure linked to delivery mechanisms.

The service delivery protests were being addressed by mechanisms they had developed, and while they had not yet triumphed, there was progress. There was constant accountability for the money that was being transferred.

Forward planning had been referred to in the action plan they had presented. They had accepted there were flaws. and a developmental planning capacity was in place to address the gaps they had in the department. The National Department had also devised a plan to assist the province.

Western Cape response

Mr Francois de Wet, CFO: Western Cape Department of Human Settlements, said that the Western Cape used municipalities for their deliveries. The issue of misalignments had been raised, and NT had indicated that they must do all their transfers to the municipalities in March. The HDA could not enter into any agreement without money, so they had to ensure that they transferred the money. They acknowledged that there had been transfers, but they had been done in relation to legislation and in order to enhance service delivery.

Ms Phila Mayisela, Chief Director: Western Cape Department of Human Settlements, said that with regard to the question on military veterans, they received the database from the National Department of Military Veterans, and they had approximately 450 names. Of that 450, 220 have been approved on a Housing Subsidy System (HSS). One of the challenges they had with the database was the lack of information, such as contact details. They had appointed people and their technical staff to track down the veterans, and that was how they had been able to approve 210. Of the approved 210, about 113 houses were at practical completion stage, including the 93 that had already been handed over, and by December of this year they would have completed all 210. They still continued to be in search of the military veterans with missing information.

Mr Mguli said that the delivery of serviced sites did not require additional funding, as it was still within the allocated amount, and they had utilized it to achieve their targets.

The instability they had referred to involved vandalism of completed units. They could not count those units, even though they were close to completion. In other circumstances, communities were antagonistic towards it or did not want to move their settlements; the community does not want to cooperate. These were the factors that resulted in them under-performing but they were working on the situation and there had been progress.

He could not comment on the statement that the Western Cape was under-performing, as he had not been present when it was made and was uncertain of the context. The housing backlog in the Western Cape was 500 000 people, and they did not have a budget of that magnitude. However, with no exception, annually they always performed well and always met their targets or slightly exceeded them. The only issue was that they may under-perform on one programme and over-perform on another. There was a concern regarding the magnitude of 500 000 people, as they had reached a target of only 19 000 units per year, and maybe the statement had been made in light of this.

The Chairperson said that the Western Cape had left out the issue of the migration of people, specific to the Metro.

National Treasury response

Ms Gaarekwe responded to the request from the Western Cape, and said the grant allowed for 2% on bulk infrastructure. It was not much, but that was all that they could afford at the moment.

On the issue of the IDMS delivery management system, as much as it pushed for other departments, there was nothing stopping Human Settlement from using it, because it covered the whole life cycle of a project.

National Department of Human Settlements response

Ms Kota-Fredericks said that what was key was that the Committee was here to follow the money, to ensure that the allocated money was seeing value. Thus, in situations like Limpopo, for instance, they understand that there was a turnaround strategy and they were giving them the benefit of the doubt. They would continue to monitor the situation.

The “dump system” for title deeds, was part of the housing subsidy system, and perhaps needed to be revisited. The Department was having difficulty in calculating and reporting/recording on the number of registered title deeds.

With regard to institutional housing, it sounded like a good idea and they should not stop exploring as long as the people were being serviced.

She referred to a fire in Philippi in the Western Cape, where a family had five children burnt. The cause of the fire had been dangerous cabling. There was a definite need for land as soon as possible to remove people from that area.

In terms of Gauteng, the alignments would make matters very difficult, particularly if there was no relationship with the municipality regarding the spatial development framework.

Mr Tshangana said that they approved the business plan of Gauteng late because they had not beensatisfied with it. The new business plan detailed the exact figures of their targets.

The meeting was adjourned.