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The Department of Rural Development and Land Reform briefed the Western Cape Provincial Parliament’s Standing Committee on the District Six contract closure status report and other related challenges. The presentation discussed the restitution grants allowed for old order claims, requested financial compensation, claims wanting redevelopment, claimants still waiting and claimants dismissed. The presentation covered institutional arrangements, construction, challenges and the way forward. It was highlighted the Department was taken to court on the District Six matter and it was requested discussion be limited given this.
Members of the Committee wanted to know about all the various groups representing the claimants, timelines around the termination of the contract, who the project manager was and the task team involved in project developed. Questions were also posed on legitimate represented groups as recognised by the Department, Phase Three, the role of the national Department of Human Settlements and criteria for the awarding of the tender given problems experienced with the contractor.
The Chairperson noted there were members of the District Six group who have taken the Department to court. It is difficult for Committee Members to interact with the Department honestly since the group may use the information against the Department. At this point, in terms of rule 70 of the Standing Rules of the Committee the remainder of the meeting was conducted as a closed session.
The Chairperson requested that all members of the public leave the venue. All documents handed out were for Members of the Committee only.
Ms Rendani Sadiki, Acting Director-General for the Department of Rural Development and Land Reform, highlighted that as the Department has now been taken to court on the matter of District Six, the matter is sub-judice. She asked that discussion be very limited in light of this.
The Chairperson instructed Members of the Committee not to divulge any of the information they received from the Department to anyone.
Presentation Part 1
Mr Wayne Alexander, Chief Director of Land Restitution for the Western Cape, said that the restitution grants allowed for the following:
- In terms of the old order claims of District Six, 2 760 people applied
- 1 449 people requested financial compensation to the value of over R29 million
- 1 021 claimants wanted redevelopment
- Claimants allocated to date: 139 people are back in District Six and that was completed in Phases One and Two using the money through the grant for restitution.
- 1 602 claimants are still waiting
- 1 010 claimants were dismissed
Presentation Part 2
Mr Kelvin Naidoo, Director of Projects for the DRDLR, said that redevelopment was driven by an institutional arrangement.
At the top of the institutional arrangement is the task team. This task team consists of political principals of each sphere of government. This includes the Minister of the DRDLR, the Premier of the province, the Mayor of the city, as well as the Chairperson of the task team
The task team then appointed an intergovernmental steering committee which is comprised of high level officials from the three spheres of government and the reference group. The reference group was nominated by the claimant community in a claimant meeting in 2013.
There was also the District Six beneficiary trust and various subcommunities and project teams
Mr Naidoo said the reference group still remains the body that the Department liaises with. They have two structures, a social integration group and a technical group.
There is the District Six Working Committee which the Department does not work with but is aware of its presence. The working committee is taking the Department to court – it claims to represent the larger claimant community, including future beneficiaries.
The District Six Advocacy Group is led by Ms Tanya Kleinhans and it represents owners of previous owners of properties.
The District Six Community Forum represents home owners currently residing in the first three phases.
Mr Jimmy Freysen, Director DRLR, said the current construction is for 108 units. Fikile was appointed to do the construction, for the amount of R167 million. Right from the start problems were experienced with Fikile in terms of progress, technical quality etc. It got to the point where the Department terminated the contract in March 2018. At the point of termination, the contract was 55% complete and the Department had paid R85 million of the R167 million. The amount spent is 51% so more work was done than money spent. In terms of the reasons for termination, the contractor continued with substandard work, under-skilled people on site, inadequately resourced work force and poor programming and coordination of the work on sight. Rebuilding of substandard work causes the contractor to lose money and causes delays.
A new site agent was provided by WHBO. WHBO had an agreement with Fikile that it would provide technical support to them. The biggest problem with Fikile was a cash flow problem.
The other problem was that Fikile had other sites on which it worked for government where it also struggled financially.
The Department has since been negotiating with National Treasury as to how it will take the matter forward. It is fairly difficult to get a new contractor to start building on somebody else’s work which is 51% complete. Another problem is who will take responsibly for the structures, the first contractor or the second contractor. Together with Treasury, the Department has found a way of dealing with the matter since it simply could not go out on tender.
Mr T Simmers (DA) asked who the project manager was for the project.
Mr Freysen said he is the project manager from the Department’s side. The other project manager is Michael Lagus from Delta consultants.
Ms S Davids (ANC) asked when the Department came to know about all of the groups it referred to.
Mr Naidoo said that over time all claimants have their own mobilisation which is out of the hands of the Department. The formation of the reference group came after development of the first two phases. The reference group has the standing of being formally nominated and elected within a claimant meeting. There were also people who did not claim but wanted to claim in the next round.
Ms Davids asked when the task team became part of project development.
Mr Naidoo replied that political heads transferred officials to an intergovernmental steering committee which was represented by the Office of the Premier, the DDG and National Department of Human Settlements. There was a standing invite to several other authorities. This was after the trust was replaced in 2012.
Ms Davids asked who the trust represented.
A delegate from the DRDLR said the trust represented District Six beneficiaries in pilot Phases One and Two which was concluded in 2013.
Mr Naidoo said the trust was the original representation from the outset of the claim. Its standing was so good that the Department made it the developer for the first phases.
Ms Davids asked why the contract was terminated in March 2018 but the contractor left the site in November 2017.
Mr Freysen explained the Department sent the contractor a letter of default and the contractor reacted by leaving the site. They did however leave security at the site.
Ms Davids asked if there are companies interested in taking on the project.
Mr Freysen said the Department was not allowed to negotiate with any parties at this point as it is finalising the process with National Treasury. Once there was approval the Department will know if there are any interested parties.
Mr Simmers asked for clarification over who the Department recognises as legitimate representative groups.
Ms T Dijana (ANC) asked why there are so many groups involved.
The Chairperson asked for clarification on what still remains to be done for Phase Three and what the role of the Department of Human Settlements in the matter is.
Mr Simmers asked that, given that the Department experienced problems with the contractor since the outset, what the Department’s criteria are when it awarded a tender. When did Delta first identify problems with the contractor?
Ms Davids asked why the Department is still entertaining other groups given the reference group was democratically- elected. The project will be more streamlined if the Department only deals with one group.
Mr Freysen said that in 2012 the reference group was formed with the aim of bringing all those groups together. The two stream in the reference group deals with technical issues with regards to the building, and the other one deals with social cohesion. The Department has asked the other groups how not to go through the reference groups so that there can be some form of uniformity.
The Chairperson noted there were members of the District Six group who have taken the Department to court. It is difficult for Committee Members to interact with the Department honestly since the group may use the information against the Department.
The Chairperson made it clear documents provided was for Committee Members only. In terms of rule 70 of the Standing Rules of the Committee, it will now conduct the remainder of the meeting as a closed session.
The Chairperson requested that all members of the public leave the venue.
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