Human Settlements Quarter 3 performance; Gauteng Province performance, with Deputy Minister

Human Settlements, Water and Sanitation

19 February 2019
Chairperson: Ms N Mafu (ANC)
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Meeting Summary

The national Department of Human Settlements (DHS) presented its third quarter performance report for 2018/19, and the Gauteng Department of Human Settlements (GDHS) presented its performance report as well.

The national DHS had 78% compliance to statutory tabling and prescripts in the third quarter but was very worried about the metropolitan municipalities that were not doing well. Only one metro was sitting above 40% while all the others were below 40%. The figures in relation to the overall target represented an improvement. The programmes that were under threat of not being achieved were Finance Linked Individual Subsidy Programme (FLISP) and the Title Deed Restoration Programme (TDRP). Performance of the emergency grant was slow-paced, but the department was engaging with National Treasury (NT) to improve its functioning.

The Human Settlements Development Grant (HSDG) performed well but there were some challenges in certain provinces. On third quarter delivery, the target was 87 968 but 58 394 units had been delivered. The total housing opportunities delivered was 87 221 with a delivery shortfall of 747. The department was let down by shortfalls of housing opportunities in North West, Free State and Limpopo.

The Urban Settlement Development Grant (USDG) was performing poorly because its expenditure was less than 50%. The best performances were in the Buffalo City and Nelson Mandela Bay metropolitan municipalities, while eThekwini had the poorest performance with 76.75% of allocated funds unspent. The department was currently consulting NT on reallocating some of the unspent funds that would be returned to the National Revenue Fund (NRF) to the two current best performing Metros.

GDHS was showing signs of improvement. Its expenditure as at 15 February 2019 was R3.4 billion (67%) with R1.6 billion of the transferred budget remaining. On delivery, total targets for the 2018/19 Gauteng Province was 13 124 stands and 29 536 housing units with delivery to date sitting at 7 364 (56%) for stands and 7 255 (25%) for housing units.

GDHS spent 67% of its HSDG grant by 15 February 2019. There were multiple claims that were unpaid and once they were paid, expenditure would be at 88%. The province had poor performance for FLISP, TDRP and Community Residential Unit (CRU) construction but did well on the Upgrading of Informal Settlements programme.

The Committee raised questions on the Emergency Grant and its turn-around time, the TDRP’s poor performance, poor delivery of Military Veterans projects, FLISP, poor performance by the Free State, Northern Cape and eThekwini on the HSDG. Members and the department were concerned about eThekwini because it was previously one of the best performing municipalities in terms of the USDG.

Meeting report

Opening remarks

The Chairperson said that the Gauteng Member of the Executive Council (MEC) for Human Settlements would be arriving late because of flight delays. She reminded the Committee that a decision was taken that whenever the Department presents its performance reports, the Gauteng Department of Human Settlements had to attend because the Committee was monitoring it due to ill-performance.

The Chairperson welcomed the Deputy Minister of Human Settlements, Ms Zoe Kota-Fredericks, who arrived late.

A written apology was received from the Minister of Human Settlements who was unable to attend due to Cabinet committee commitments. The Minister expressed sadness for not being able to hear Gauteng province present.

The National Department of Human Settlements (DHS) would present first followed by the Gauteng Department of Human Settlements (GDHS).

The Deputy Minister gave thanks to the National and Provincial Department as well as the Committee Members for their attendance. She hoped there would be engagement and ensured Members that the Department was making headway.

Department of Human Settlements Third Quarter Preliminary Performance Report

Mr Mbulelo Tshangana, Director-General (DG), DHS greeted all those present. He gave an apology for Mr Joseph Leshabane, Deputy Director-General (DDG): Programme and Project Management Unit, who was attending the Inter-Ministerial Committee (IMC) on Land Reform. The Gauteng Acting Head of Department (HOD), Mr Daniel Molokomme who started in January was also present.

Mr Tshangana added that the third quarter performance figures look good at 78% but the Department was very worried about the Metropolitan municipalities (Metros) who were not doing well and only one Metro was sitting above 40% while the other metros were below 40%.

Governance and Administration

Ms Sindiswe Ngxongo, Acting DG: Chief Operational Officer, DHS, said she would cover Programme one; Governance and Administration which was related to compliance matters.

The Department had 78% compliance to statutory tabling and prescripts in the third quarter, which was an improvement on the 70% compliance achieved in the second quarter. Matters of compliance during the third Quarter included submission of the following: Departmental Strategic and Annual Performance Plans for 2019/20 to the oversight bodies (second draft), financial statements to the National Treasury (NT) and out of 1125 invoices which were received, 99.6% of invoices were paid within 30 days.

The 83% implementation of the Human Resources (HR) Plan includes but is not limited to the following activities: analysis of exit interviews and quarterly leave use and coordination of consequence management for late leave submission. The leave management was now done electronically.

The 17% of the HR Plan which was not performed as planned consists of the following activities: consultation with stakeholders on the proposed organisational structure, alignment of the structure based on the Department of Public Service and Administration (DPSA) inputs and subject to the Executive Management Team (EMT) concurrence, approval of the Migration and Placement strategy and one Skills Development Committee Meeting.

Ms Ngxongo said that all of the above points were linked to the proposed organisational plan and this would be the area that would be concluded under the new administration, but it was planned for the current financial year. The indication was that if the Department did not have these items, its performance would have improved.

All posts will be advertised on a permanent basis, including identified critical posts. This would be done before the end of the current financial year.

Progress on legislation changes

The Property Practitioners Bill, 2016 was unanimously adopted by the Portfolio Committee and the National Assembly during the period under review. 

The Department is waiting for Cabinet approval for submission of the Home Loan and Mortgage Disclosure Amendment Bill, 2016 to Parliament for introduction.

The Department is waiting for Cabinet approval for the publication of the Housing Consumer Protection Bill, 2016 in the Government Gazette for public comments.

Human Settlements Development Bank (HSDB) Bill has been aligned with an approved policy and a draft Business case and it was currently being finalised for approval.

There are certain omissions and insertions which have been effected in the Pie Amendment Bill.

The norms and standards for rental housing are yet to be finalised to come up with a final draft of the Rental Housing Amendment Act 35 of 2014 Regulations.

Intergovernmental and International Relations

Mr Neville Chainee Acting DDG: Human Settlements Planning and Strategy, DHS said that the Department has coordinated the following Intergovernmental fora in line with human settlements priorities: Provincial quarterly intergovernmental and multi-sector planning and budgeting, Joint Coordinating Committee (JCC) on Land, Eastern Cape Metropolitan Municipal Intervention Forum, Joint Working Group with the Department of Science and Technology, Back to Basics, and Disaster Management and Parliamentary Committee.

During the period under review the Department has serviced planned initiatives on international cooperation through the following activities: participation in the International Habitat Day commemoration and management of the implementation of the International Cooperation with Cuba, amongst others

The following Partnerships were mobilised towards the development of Human Settlements:

  • Partnerships were mobilised from the Social Contract signatories and other stakeholders to sponsor towards human settlements development whereby requests were made to the various institutions and contractors to pledge support towards the coordination of the National Govan Mbeki awards and the National Assessment Task Team.
  • Acknowledgement of excellent participation and contribution towards Human Settlements development through the Govan Mbeki awards.

On rapid response to community concerns and the implementation of the Ministerial outreach initiatives, the following are some of the interventions that were undertaken:

  • Land invasion in Orange Grove Farm: KwaZulu-Natal
  • Petition hearing on Human Settlements related service delivery concerns by the community of   Vosloorus and Alexandra in Gauteng – City of Ekurhuleni
  • Engagements with the family members of the Port Elizabeth Black Civic Organisation (PEBCO 3) on the 2018 Govan Mbeki Awards

Programme Monitoring and Delivery Support

Within this quarter, the Department undertook processes related to the approval of both the Human Settlements Development Grant (HSDG) and the Urban Settlement Development Grant (USDG) for the 2019/20 financial year which included requesting and providing the business plans as well as the project readiness matrices which were carried out for business plans. The catalytic projects were included in the project readiness matrices and the Department had a joint coordinating committee with relevant provinces together with the Housing Development Agency (HDA).

A summary of the approved catalytic projects’ development status per region per province shows the 50 projects per region per province which were either being implemented, or planning was underway. 20 projects were under planning and 30 projects were implemented.

The Department had Mining Town projects which it managed with the Department of Mineral Resources (
DMR) and the Department of Planning, Monitoring and Evaluation (DPME).

The Department conducted assessments of the performance of multi-year projects in municipalities with distressed mining communities in line with the 2018/19 Business Plans and HSDG ring-fenced funds.

There were 202 informal settlements which were assessed (feasibility studies conducted). The settlements are; Johannesburg Region A (38), Johannesburg Region A1 and B (29), Johannesburg Midvaal (36), Ngaka Modiri Molema (17), Johannesburg E2 (20), North West Ruth Mompati (14), and Tshwane Region one (48). There were 77 informal settlements upgrading plans developed in Tshwane Region seven (15), Midvaal (36) and Johanneburg Region D (26).

The department indicated that the projection for Subsidised Housing was a projection only for the quarter, not the year. Indications given were targets in relation to service sites, houses and what the performances were.

In terms of Community Residential Units (CRU) delivered in Gauteng Province, Jabulani Hostel in Calgro – phase one and two had a target of zero, but 64 new units were delivered in quarter three. Orlando West Hostel had a target of zero, but 34 new units were delivered in quarter three. South Hills CRU had a target of 50, but 204 new units were delivered in quarter three.

An indication of all the informal sites assessed as well as which provinces and regions the sites were located within Gauteng was given.

During the third quarter, the department managed to perform and achieve the 250 Military Veteran Units (MVU) and it was in the process of verification.

Six provinces and two metros were supported in the implementation of People’s Housing Process (PHP) Policy.

The consolidation of the three Development Finance Institutions (DFIs) have been finalised. The assets, liabilities and staff of Rural Housing Loan Fund (RHLF) and National Urban Reconstruction and Housing Agency (NURCHA) was incorporated into the National Housing Finance Corporation (NHFC) effective from 1 October 2018. The focus of the project now shifted to the establishment of the HSDB.

The Minister of Finance provided concurrent approval in terms of Section 66 (1) and 66 (3) of the Public Finance Management Act (PFMA) for the consolidation of NURCHA and RHLF into NHFC. This was the final approval required for the implementation of the merger agreements.

Support was provided in the implementation of the Title Deeds Restoration programme (Pre and Post 1994, and from April 2014).  Follow-up letters were sent to provinces as well as letters on feedback to the provinces on the second draft HSDG Business Plans 2019/20.

Title Restoration Project (TRP): Third Quarter Provincial Delivery

The number of Title Deeds Planned for quarter three was 49529, but this was not achieved. Only 11255 deeds were delivered. The department was able to do this due to township establishment, beneficiary verification and resolving disputes and was therefore a work in progress which would lead to title deeds being issued.

TRP: Third Quarter Grant Performance

An indication was given to the planned versus actual expenditure per province.

Programme monitoring and delivery support

The reported project performance in terms of the HSDG was verified in all nine provinces through project site visits and analysis of other data sources. A total number of 67 projects for HSDG representing 13% of the 515 projects that were delivered in the third quarter were verified through project site visits while the balance was verified through the analysis of other data sources.

179 Practitioners were trained in human settlements programmes training through the “Train the Trainer” programme in Batho Pele Change Management in human settlements delivery. There were 62 students in the Departmental Bursary Programme.

Finance Linked Individual Subsidy Programme (FLISP) performance had a target of 887 subsidies nationally and achieved 693 beneficiary approvals.

Departmental Third Quarter Preliminary Performance

The figures in relation to the overall target represented an improvement. The programme performance was indicated by a dashboard and summary of where the Department was, which represented a mixed bag. The programmes that were under threat of not being achieved were FLISP and the Title Deed Restoration Grant (TDRG), while the others that were amber would hopefully be converted to green.

Departmental Expenditure Report and Grants as at 31 December 2018

Ms Funani Matlatsi, Chief Financial Officer (CFO), DHS said the improvement outlined was related to the budget as well as goods and services performance. There were, however, some hiccups in terms of different items which she would discuss in the presentation.

The Department had projected a 69% third quarter spending target which was met, but 69% achieved was informed by the transfers to municipalities and metros. The other programmes, except for programme three, the department achieved above 69%. The department was let down by programme three which had the two issues; one, the title deeds programme which required the employment of employees which was done very late. However, in the next quarter there would be an improvement. Second, was the National Upgrade Support Programme (NUSP) which the Department had been struggling with for a while and it has since appointed service providers in relation to the programme. FLISP was another programme that could let the department down.

Departmental Expenditure

Compensation of employees was projected at 280 million but 258 million was spent. Ms Matlatsi said that in the past two months and possibly the fourth quarter there has been a loss of employees due to contract issues. The issues have since been addressed.

On Goods and services, the Department had technically overspent due to travelling arrangements and providing support for programmes such as Programme three.

A total of R21 million had been transferred, with the majority of this being the HSDG to Provinces and Metros. There was one tranche that still had to be transferred to metros which would be spoken to when the Department concluded.

The operational budget put aside from grants was at 90% expenditure. It was not a bad sign. Although there was some overspending on items, there was some reconciliation balancing for the department to reconcile red flags with white flags.

The department was busy finalising with the Social Housing Regulatory Authority (SHRA) for the transfer of the SHRA: Restructuring Capital Grant which would be related to the pipeline projects and over investments that SHRA had developed to date.

On the HSDG, R4.1 million had to be transferred. One tranche was left for transfer on the 26th of February and the USDG to the same effect.

The Municipal and Provincial Emergency Grants were dependent on conditions to be met for them to be transferred.

The Title Deed Restoration grant was moving on a slow pace and this affected its outcomes and targets as well as the R30 million capacity.

HSDG performance as at 31 December 2018

Ms Matlatsi said that the HSDG had performed well in the current financial year but there were some challenges in three (North West, Free State and Limpopo) of the provinces. The challenges were tabled at the Minister and Members of Executive Committee (MinMec) meeting and a decision was taken to continue the transfer of funds irrespective of the challenges faced. The North West (NW) was still under administration and had spent 61% of its total available. There was a concern about the Northern Cape (NC) which had the smallest budget but still had no performance. Gauteng province (GP) had the biggest budget, but the provincial department would present its own case. There were two interventions, including Free State (FS) where there had since been improvement.

The Challenges in the North West (NW) were receiving attention and the R769 547 still available would go to approved projects, payment of service providers and transfers to the HDA and Rustenburg Merafong. Therefore, the NW would be able to spend the projected 98% and the remaining 2% would be rolled over if it was available.

The intervention in GP by the Department led the GP to at least spend the R3.1 billion which the Department was concerned about not happening in the previous quarter.

On third quarter delivery, the target was 87968 but 58394 units were delivered. The total housing opportunities delivered was 87221 with a delivery shortfall of 747. The three provinces mentioned above let the Department down by shortfalls of 4521 housing opportunities in NW, 3911 in FS and 3474 in Limpopo (LP).

The department might not have achieved its target, but the 87221 (99%) was an acceptable figure at this point in time. The improvements in NW and LP would lead to improvements in the fourth quarter.

FLISP was at a very tender stage and the department was working hard to structure FLISP so that the HSDB can be taken off the market part. The provinces continued with the projects part to move forward with the programme as there were lots of people who needed to access the services. Due to this, the department could not give the best figures for FLISP and in some instances there were positive numbers such as GP with 563 approvals and negatives such as Mpumalanga with only two approvals.

USDG expenditure performance as at 31 December 2018

When the USDG figures were presented to MinMec, the department was not confident because the spending of the Grant was not at the 50% where it should have been. By December the spending was at 25.2%. There would have been improvements if the money was spent in January, but there were challenges with municipalities. The Metros of Buffalo City and Nelson Mandela Bay were in a better position of providing infrastructure but Mangaung and the City of Cape Town (CoCT) were having challenges with USDG performance.

eThekwini had the lowest performance in terms of unspent transferred funds during this period. In the previous year the Department intervened, but this year, the likelihood that it would spend the allocation was very minimal. During this period the department was waiting for metros to improve implementation before Division of Revenue Act (DORA) provisions were implemented, and therefore the department gave them some space to create recovery plans. Some recovery plans were adequate while others were not. The Department was consulting municipalities on this.

If the Department was not able to intervene in time with the DORA provisions, then NT had to intervene and invoke the stopping of revenue provision and return the money to themselves because the Department could only withhold, and not stop provision completely. The department wanted NT to transfer a portion of the provisions that would be stopped to Buffalo City and Nelson Mandela Bay because they felt the metros would be able to spend it within the time frame. The submission was in the process of being sent to NT by the DG. It remained that the performance for the USDG did not look well, but the Department was hopeful that some of the stopped provisions could be transferred instead of it all being returned to the National Revenue Fund (NRF).

Title Deed Restoration Grant expenditure performance as at 31 December 2018

The Title Deed Restoration Grant (TDRG) was moving at a snail pace with 39% of funds spent, but there would be an improvement due to departmental interventions.

Provincial and Municipal Emergency Housing Grants performance as at 31 December 2018

Both the provincial and municipal emergency grants were dependent on requests. Matters concerning the Emergency Grant framework had to be in line with NT and approval for requests was required from it. The department has recommended to the NT that the grant purpose include “To provide funding to provinces to repair the damages following a disaster if and when the costs of repairs are less than the cost of relocation and provision of temporary shelter”.

There were approvals for the provision of 1877 temporary shelters at a cost of R64 441.00 per unit, inclusive of relocation costs amounting to R121 million in Mpumalanga. 1300 Transitional Residential Area units at a cost of R64 441.00 per unit inclusive of relocation costs amounting to R84 million for the Western Cape Province, Khayelitsha and Phillipi were also approved. There were applications by the department awaiting approval from NT for Nelson Mandela Bay and Buffalo City. There were also pending applications from the OR Tambo District Municipality and KwaZulu-Natal that the department was attending to.

Ms Matlatsi concluded and said that she would hand over to the DG or DDG because the remaining slides were ways forward and actions implemented by the department which members had read.

Director-General’s remarks

Mr Tshangana said the department had met with the metros the previous week. Mr Chainee had met with the HOD and three metros in Gauteng to look at financial and non-financial challenges. The Minister met with the eThekwini leadership discussing their performance with the Mayor and MEC. eThekwini was sitting at 14% and R900 million still had to be dispersed to it before the end of February. The Department had consulted eThekwini to ensure that its recovery plan was credible.

DHS was worried about eThekwini because it had never failed to spend 100% of the allocated budget before, and last year this time the department was also worried about them when their spending was at 39% and were able to spend 100% of their allocation. Based on past experiences, the department felt the metro would still spend the 100% allocation, but there still had to be action before NT can intervene and took the funds. This was crunch time. eThekwini had big projects that were kicking in, but its processes was delayed due to Supply Chain Management (SCM) challenges. The Department was spending a lot of time helping eThekwini, and the Minister was driving this.

Nelson Mandela Bay Metro was not doing bad and was at 39% and may be put forward for reallocations. However, the best performance in terms of financial indicators was from Buffalo City who was close to 50% in the preliminary figures. It was the department’s principle to reward good performance and punish poor performance.

Mr Tshangana said that this was the outlook for the third quarter in a nutshell and that the Department was ready to take questions and comments.

Gauteng Department of Human Settlements presentation

Mr Daniel Molokomme, Acting Head of Department (HOD): Gauteng Department of Human Settlements (GDHS) said he assumed the position on 10 December 2018.

Mr Molokomme said that the previous presentation by the National Department dwelled on the third quarter report, and to avoid an overlap, the Gauteng presentation would focus on performance post third quarter.

In view of the adjusted business plan, total targets for 2018/19 are 13124 stands and 29536 housing units. Delivery to date is at 7364 (56%) for stands and 7255 (25%) for housing units. He added that when the sites were counted, one of the sites was not counted. All the totalities had to be approved and recorded. The province is confident that there would be improvements by the end of March.

Non-Financial Performance as at 30 January 2019

Mr Molokomme said that it was important to note that where the province had control on bulk infrastructure, it performed better. The province used 2% of its HSDG budget to assist Sedibeng and the West Rand.

The Province was doing well, and the 7375 delivery units stemmed mainly from its Mega Projects on the West Rand because it had control over the bulk allocation as well as the money for mining towns. Sedibeng municipality encountered issues which the MEC together with the Premier and other stakeholders from the Department of Water and Sanitation (DWS) were attending to. It affected the South of Johannesburg up to Protea Glen and Ennerdale.

There was a total delivery of sites of 10 141 which indicated that the Province was moving closer to its target of 13 124 sites. There were 7 375 units delivered. In terms of the top structures, it was not doing well but was making progress in terms of servicing sites.

The GDHS in terms of planning was producing a better pipeline for the next financial year (2019/20) because it had made a mistake of rushing into top structures instead of addressing the bulk and services previously. Together with the national DHS and municipalities, a round table discussion was held to align the business plan with HSDG and USDG.

The MinMec resolved that when municipalities approved their business plans for the USDG, the MEC and National Minister had to concur so that the plans aligned with the three spheres of government and ensure money is used correctly.


As Mr Matlatsi had indicated, expenditure was at 62% but the province’s expenditure as at 15 February 2019 was R3.4 billion (67%) with R1.6 billion of the transferred budget left.

GDHS did not build one structure stand, but blocks could not be counted until it was completed. Gauteng had to take a high-density approach due to its population size instead of building single houses.

The GDHS was not doing well on the Title Deed Restoration Programme. It noted that townships established from 1994 onwards and used the ‘Less Formal Township” Act which meant that the townships were established without adhering to municipal requirements. The focus was to formalise and register the townships so that Title Deeds could be delivered. The DG called for more effort to be put on proclamation and registration of townships as these conditions needed to be met to issue title deeds.

Medium-Term Strategic Framework (MTSF)

For FLISP, the total achieved MTSF to date was 4 096 with a shortfall of 23 754 (85%) which was very high. The Upgrading of Informal Settlements Programme achieved a total of 43 323 which exceeded the target of 41 275 for the Province. 1 162 CRUs were constructed, which was below the target by 1 638 (59%). The province did not do well on CRUs in hostels. It assumed that people residing in hostels would be able to pay for the rental delivered, but this was not the case. The province took the decision that hostel development had to be Reconstruction and Development Programme (RDP) status because a large majority of those in hostels were unemployed, and those who were employed did not earn enough to afford the rental stock.

The Social Housing Programme run by SHRA achieved a total of 5 023 with a variance of 49% from the target.

The Military Veterans Programme delivered 200 units with a total of 323 achieved to date. The number was small compared to the target of 2 837. The provincial department was working together with the Department of Military Veterans (DMV) and a project called Palm Ridge which had been identified in Ekurhuleni and was building a village with 770 units. Procurement was at an advanced stage. The project would be a flagship project and had been elevated to the Presidency.

A total of 60 572 Title Deeds had been delivered to date with a variance of 36.6% from the target.

On Acquisition of Land Parcels, Gauteng had been given 10 000ha of land to acquire. It understood the process of expropriation and would continue to acquire land as a transitional matter.

Mining Towns

Mining Towns were a very important area. One of the mining houses had donated 3000ha for urban agriculture. The province was having serious impact in terms of infrastructure in mining towns, and that is why the Gauteng production level was high, with West Rand leading.

Transfers to municipalities

There was a misunderstanding between the MEC and Mayor of the City of Johannesburg (JHB) and he wanted to clarify that the provincial department had never reduced the transfer amount for JHB. JHB had not been implementing projects. For example, on the River View Mega Housing Project, the GDHS had to intervene, and a tripartite agreement had to be signed with JHB to allow money to be paid directly from the department. Once the agreement was signed it meant that GDHS could not transfer the funds as it resulted in the money being received twice by the City. The GDHS met with the Mayor and explained the situation, and their issues were resolved. R 135.9 million had been transferred to JHB for completion of ongoing projects and R22 million was transferred to the City of Tshwane.

The City of Ekurhuleni did not do well, and the GDHS was shocked because it did very well last year. It was rewarded for its achievements with an increase in its transfer to R506 million, but unfortunately it was not doing well this year and the cause was unknown.

Progress on transfers to agencies

On HDA, Mr Molokomme said it was known that the money had been transferred back to NT. Despite this, the HDA received R158 million to pay invoices and comply with obligations but they would be monitored quite closely. The GDHS would focus on projects it had already with them and perhaps in future give them more money.

The GPF had a budget of R771 914 000 and had already spent R 690 488 700. It had delivered 4 900 stands largely in West Rand because the GDHS had control there. Also delivered were 1 192 units at roof level, 1 979 units at wall plate level, and 2 723 units at foundation level.

Reasons for non-performance and interventions

The challenges were known to the Committee, but they were common challenges such as poor integrated planning across the three spheres of government, FLISP, inconsistencies in the management of the beneficiary lists, illegal invasions and bulk infrastructure issues. Late approval of the business plan was a challenge and Mr Molokomme hoped the DG would approve it on the first of March 2019. There was a business plan round table and the parties there agreed to it.

HSDG Cumulative Performance as at 15 February 2019

GDHS had spent 67% of its HSDG by 15 of February. There were multiple claims that were unpaid, and once they were paid, expenditure would be at 88% and GDHS was committed to not having a rollover.

Expanded Public Works Programme Performance

3 954 jobs were created, and it was likely that the province’s budget would be increased in 2020 because it has spent 100% of its current budget.


The Chairperson gave thanks for the presentations and said that she could see the improvement made in Gauteng notwithstanding the intervention by the National Department. She added that the discussion would commence, and Members could direct their questions to the National or Provincial Department.

The Chairperson asked the National Department to assist the Committee on the issue of the Emergency Grant. It was a fairly new grant but the spending on it was very low despite various emergencies around the country. She asked how aware the provinces were on accessing the grant. In the report it was noted that the Western Cape has asked for some money for Philippi and Khayelitsha, and Eastern Cape has requested for OR Tambo. She asked if the department was assisting these provinces to access the Grants and what the turn-around time was once the grant application had been submitted by provinces.

Mr K Sithole (IFP) gave thanks and asked for proof of the 96.4% for invoices achieved because there were contractors who have not been paid by the province since last year. He was concerned about the number of increasing informal settlements in Gauteng, especially in Tshwane. Gauteng was failing on the Title Deeds programme. He asked if there were mechanisms to fast track the programme.

On Inner City Regeneration, Mr Sithole said that Gauteng province said that there has been progress but if you go to the City of Johannesburg, there is no progress.

On City of Johannesburg, Mr Sithole asked if there was a programme to manage illegally of few thousand in Diepsloot. He was also concerned about the Cape Town informal settlement since nothing was being done there.

Mr D Kabini (ANC) gave thanks to the two departments for their presentations. On the title deeds, he said that seemingly there did not appear to be serious intervention because there was no implementation supervision for provinces to carry out the programme. This was not good and created service delivery issues. Some provinces did not make title deed programmes a priority and therefore intervention was necessary.

Ms M Nkadimeng (ANC) gave thanks and congratulated the improvements made. On title deeds, she said that she was worried about the Eastern Cape who delivered zero title deeds and asked what the plan of action was by the Department.

Ms Nkadimeng commended Gauteng on its provisions for Military Veterans (MVs). The province had indicated that it was not doing very well on a few programmes but there was no mention in the recovery plan on how the issues would be addressed to improve the programmes.

Mr M Malatsi (DA) said that the issue of underwhelming title deed delivery had been an issue since 2018 or the year before, and the department had made reference to interventions being made in terms of providing organisational infrastructure, additional human resource capacity and assistance to provinces and municipalities to expedite the issuing of title deeds. He wanted to know the pace of delivery subsequent to those interventions because there had been improvements, but the national DHS was not close enough to the target.

On MVs, Mr Malatsi wanted to know what caused the slow rollout, and whether it was administration or intergovernmental relations challenges because MVs were not rare in the country. On the MVs project in Gauteng, he said that the Province was still under 50% of its MTSF target which was underwhelming and asked what their challenges were for the rollout of the project.

The Chairperson welcomed the Gauteng MEC for Human Settlements, Mr Dikgang Moiloa.

Mr M Wolmarans (ANC) said improvement was visible from the second to the third quarter especially the in the national DHS and he hoped NT heeded its request for the direct transfer of funds to Nelson Mandela Bay and Buffalo City.

On MVs, Mr Wolmarans said that he was concerned if the concurrency between the national DHS and the DMV was adequate.

On title deeds, Mr Wolmarans said it had to be considered that some issues arose from cross-borders. For example, the middle of the NW had GP and FS province present. All three provinces had to deal with a backlog of issuing title deeds due to poor intergovernmental relations between the provinces. The intergovernmental relations between provinces concerning title deeds needed to be addressed and the department need a plan to address it.

On FLISP performance, Mr Mr Wolmarans said that performance was not satisfying, but given the programmes category of beneficiaries and the number that had to be served, there was mention of giving the Bank the marketing component. He asked if the department could expand on the modalities of this issue.

The Chairperson, addressing the national DHS’ third quarter report said that the issue of people with disabilities targets not being met had been an issue for a while and asked the Department to expand on how it was planning to address this going forward.

The report mentioned that the Skills Development committee only met once, the Chairperson asked why they only met once and how often were they scheduled to meet. She mentioned this because skills development was an important area for the country to address, and the department had to play its role to foster the area.

On MVs, the Chairperson said that the national department said it delivered 250 houses, and the provincial department said it delivered 200. She asked if this meant that the other provinces collectively delivered 50 houses. The Chairperson asked for clarity on the matter and if it meant that other provinces did not meet their targets.

The Chairperson raised a concern about provinces not delivering on title deeds, but responsibility for this had to be placed on the national department because it has not intervened adequately. The issue has been raised many times and it was a broad economic issue and therefore needed to be addressed to improve people’s economic viability.

On students that the Department supported, the Chairperson asked what provisions were available for students that had completed their studies since they now faced unemployment but were funded by the department. The question had been asked before and there were students in the pipeline and there had to be a clear plan for these students.

On Programme three, the Chairperson said it had not been performing since 2014. It was the worst performing programme and was a very important programme since it deals with service delivery. She asked if it was an issue of capacity and what could be done to improve the programme by the national DHS.

On the Social Housing Capital Grant in relation to GP, the Chairperson said the national department’s report mentioned that the Social Housing Capital Grant was very low, and the pipeline projects and the bulk of the projects were always mentioned to be in GP. However, GP’s performance in the area was low. She asked if there was a core relation between the Capital Grant from the national DHS and the deliverance to SHRA in GP, and what the challenges were.

On NC, the Chairperson said that previously the province had not been interrogated on its poor performance due to its small budget. The province was small and therefore should have been easy to help it. She asked what the challenges were.

On FS, the Chairperson said that the province performs well on spending their money received, but it was unclear what the money was used on and what was delivered.  She requested a report by national DHS on FS province which outlined its challenges and how the Department would address them.

On the USDG, the Chairperson was pleased that Nelson Mandela and Buffalo City metros had done their best to achieve their targets and said that the Committee had to support the department in saying that these two metros receive more funding if possible. She asked what the amount possibly given to the metros would be. There had always been an issue of metros not performing before but eThekwini was the worst performer. She said that the Committee had to have an interaction with eThekwini metro before the Committee ended its term to understand its challenges, underperformance and turn-around plan.

The Chairperson concurred with the proposal raised by Mr Molokomme about the grant being part of the Human Settlements overall budget, and the need for the national DHS to inform provinces and involve them in how the funds should be spent instead of giving them leeway. During the next term, there had to be a better way of managing the USDG.

The Chairperson appreciated that GPF was trying to make Gauteng a star performer since it spent all of its allocation. She asked how the money salvaged from HDA by NT affected Gauteng’s budget and deliverance since it had a big loss, and if the department had transferred funds since then. 

The Chairperson appreciated that the Gauteng department used a portion of its own budget for Sedibeng and West Rand who were not metros and therefore did not get USDG benefits.

The Chairperson asked for clarity on why City of Tshwane and Ekurhuleni have zero sites delivered in the reports.

The Chairperson said that one of Gauteng’s biggest issues had been the management of the beneficiary list and it had tried to deal with it. She asked if the Gauteng department had gotten the issue back on track and was therefore no longer a challenge. The issue raised by Mr Sithole in Diepsloot was related to this.

The Chairperson thanked Mr Molokomme for presenting a report that was not depressing for the Committee. She requested him to keep the department from regressing, but rather to keep improving. The department was called to Cape Town every time the national DHS presented its quarter performance reports and she believed this was a good decision by the Committee since it increased monitoring and gave the province a reason to work hard.

GDHS Responses

Mr Molokomme said it should be noted that the MEC of Human Settlements and the HOD together with the national department amended the business plan of Gauteng on the third of January 2019 and the DG approved it a week later. The amendment was to unblock things that were not moving at all which included payments of securities, service providers and money for bulk infrastructure. After this amendment there were many physical claims and proof could be sent to the Chairperson.

On the beneficiary list, Mr Molokomme said that the MEC had appointed Adv Nthabiseng to focus strictly on beneficiaries. The business plan had to guide how beneficiaries were handled. It was decided that once beneficiaries were approved, the MEC would consult Councillors. Municipalities were critical for beneficiary allocations and they had to be brought on board when it came to beneficiary lists. The MEC for Cooperative Governance was committed to a consultative role.

On Tshwane and Ekurhuleni’s zero sites delivery, Mr Molokomme confirmed that Tshwane delivered zero sites, but in the case of Ekurhuleni there was more than 8000 sites. The sites were serviced through the USDG and were assisted largely by the HAD which Gauteng did not report on. R158 million was already on its way to HDA so that it could pay its invoices and obligations. The MEC did not decide on what would happen in 2019 in terms of the new projects with the HDA.

Mr Molokomme clarified that Gauteng’s mega projects were doing very well and outclassed the National Catalytic Projects and the projects had the same intentions. Gauteng did not use the term ‘catalytic projects’ but rather mega projects.

The Chairperson asked for clarity on whether mega projects were included under catalytic projects in the report.

Mr Molokomme responded that some were included under that heading.

On MVs, Mr Molokomme admitted that performance had not been good, however, this has been realised and there would be a Military Village in Palm Ridge that was already appointed. The Village would be a pilot for the republic, and the provincial department was working closely with the DMV on it.

On informal settlements, the national DHS was working with GDHS and it was doing classification of informal settlements for 2020. There would be three classifications; first, those ready for formalisation; second, those that would require interim services; third, those that must be relocated. This exercise was nearing completion and there is around R79 million in transition strictly for upgrading informal settlement during the current financial year. For the 2019/20 financial year, an application would have to be made to the NT to access the funds.

Mr Molokomme said that GP had a large population and it would continue to grow in future. Therefore, plans were being made to address informal settlements. 1.1 million houses had been delivered in the quarter, but this was a moving target as migration to GP was predicted to continue.

On Inner City Regeneration, Mr Molokomme said that the MEC worked very closely with JHB but it was difficult to remove people from buildings. The MEC was working on a strategy with the Executive Mayor to allow the private sector to develop the properties.

On Rapid Land Release, Mr Molokomme said it did not only refer to land but properties that were delipidated and highly indebted or abandoned as well.

On title deeds, the GDHS had spent more of its budget on registration and reclamation of townships. Spending R33 million compared to R16 million the previous year on the formalisation of townships to make them registerable.

Mr Molokomme said it was true that there were unpaid contracts, but there were many claims that still had to be addressed. He asked for the name of those who were not paid so he could follow up.

FLISP would be divided in two. There would be an open market which would be run by NHFC where applications could be made for property. The second part would be linked to its projects. The Gauteng department wanted Rapid Land Release to be part of FLISP. FLISP funds would be used to link beneficiaries to stands since it would be better for the beneficiaries because they would be made bankable with security instead of the current case where they had to get financing from the bank after the house was built and risked being declined because they did not have security. GP wanted to ensure that beneficiaries were made bankable by linking their names to the stands that they would receive.

Mr Molokomme said that hostels were owned by the department and others by the municipalities. The NHFC has been commissioned by the MEC to do assessments of the hostels. Once a report was received, a plan would be created.  He said that in the area that Mr Sithole referred to, some hostels might belong to the City of Ekurhuleni and they were responsible for maintaining it. It is difficult to determine if hostels belong to municipalities or the province, but the MEC would address this. 

An agreement would be signed with NW on property to assist people to get their title deeds. The programme had a budget.

The Chairperson said that the national department would talk on the issue of internships, but the province could also talk on the issue if they want to.

Mr Molokomme said that the province was sponsoring five town planning students at the University of Johannesburg.

National DHS Responses

Mr Tshangana said that more than 400 students were supported by the national department to date and that only 49 students have not been absorbed by various public and private organisations. The Department was in the process of assisting these, and the Minister was writing letters to ask MECs to absorb the 49 students.

The Chairperson asked for a time frame on the absorption.

Mr Tshangana said that it would be concluded before the end of the financial year.

On Emergency Grants, Mr Tshangana said this was the first year of implementation for the grant and all provinces and municipalities were aware. There was oversubscription of applications for the grant, and the national DHS was concerned about overspending.  The process of approving projects took longer than expected. The turn- around time was quite slow and admittedly the department and provinces did not do well in terms of managing the turn-around time. There were applications from various provinces and municipalities because the grant was split into municipal emergency grants and provincial municipal emergency grants.  Some changes had to be made to the grant in the next financial year because its conditions had to cover a wide range of emergencies. The DoRA framework and conditions would change in the next financial year to make it more flexible. The DHS was working with NT and it was agreed that conditions would be changed.

On title deeds, GDHS spoke about township proclamations, and the report received from service providers in GP reported that there were 133 000 properties linked to township proclamations. Township proclamation was an artisan planning matter. If it was assumed that the township was proclaimed within three months, the beneficiary could have moved on by that time and be nowhere to be found. There were about 100 000 title deeds that were currently uncollected because people are no longer in those houses. There was an occupancy study to determine who was present and it was noted that some beneficiaries no longer lived in these houses and were not traceable. Another challenge was disputes about the title deeds such as between siblings, which lead to them not being collected. The biggest delivery of title deeds was Gauteng followed by the Western Cape (WC). There was improvement in the programme overall.

Mr Tshangana said that the Department was working with the Eastern Cape (EC) and it was determined that a team of professionals such as planners and land surveyors were needed to get deeds delivered. The professionals were appointed approximately a month ago. EC would be seeing improvement since the department was assisting.

On MVs, Mr Tshangana said that the competition was between Gauteng and Western Cape. There was a Village in Belhar, Western Cape.  It was an integrated settlement that included a hospital, student housing, and gap funded housing. He asked the Chair to visit the project.

The big numbers came from GP for the last quarter while the WC only contributed 50 houses. The target for the entire year might not be met, but the biggest contributions would come from GP and the WC because they had tangible targets while other provinces were gearing up.

On the challenges related to Military Veterans, Mr Tshangana said that one of the main challenges was beneficiary administration – MVs not wanting to be passive participants, but part of the projects such as wanting their own companies to be used. Securing procurement that benefitted MVs took time. Some of the problems were caused by MVs themselves because they were not organised, and in other cases it was the approval of the beneficiaries. The threshold income of R125 000 was also problematic.

Mr Tshangana said that Mr Molokomme had adequately addressed the issue on FLISP. He added that by splitting of the programme in two, there would be a ‘project based FLISP’ which was currently administered by the provinces and they would continue to do so. The other programme would be a ‘market based FLISP’ which would be administered by the HSDB, and anyone would apply there for FLISP. The national DHS did not want to take FLISP completely away from provinces.

On the skewed SHRA distribution, Mr Tshangana said it would be flagged with SHRA so that there were more projects done by provinces to even the distribution. The NC started late but they would spend all their allocation and the Department was following the process because it had to be monitored so that NC did not lose the grant.

On the categorization of informal settlements, Mr Tshangana said it was NUSPs duty to categorise and that it was starting to perform. The Emergency Grant and the TDRG was pushing programme three down.

The USDG came out of vote 38 which was a Human Settlements vote, therefore it had to be treated as part of the department’s capital budget. Some metros were doing well synchronising USDG and HSDG while others did their own thing. There was a policy on the administration of the USDG and provinces had to submit performance plans that were in line with HSDG before being approved.

MEC’s remarks

Mr Moiloa, MEC gave thanks and said the issues raised had been addressed.

An area of grievance for the GDHS was the DoRA which said 30% on decimated groups were youth, women, MVs and the disabled. This policy has often been misinterpreted and abused in the past. The GDHS was now intervening and could establish a corridor focused Human Settlement Planning Forum so that all stakeholders in the development corridor or region could interact with metros.

On beneficiary administration, Mr Moiloa said that he was not leaving office before the beneficiary list was approved by the Housing Subsidy System (HSS) and the national department and given to municipalities. The 200 000 plus list of Gauteng beneficiaries had to have the name and ID of beneficiaries so it could be published in a book that municipalities had as well as on a departmental website which would be updated yearly. It would address grievances as far back as 1996.  

Mr Moiloa said he did not know how to solve the Subcon issue which was a massive grievance concerning money borrowed from the bank, but the challenge remained that a precedent would be created where government was expected to continue paying peoples bonds.

On student’s accommodation, Mr Moiloa said that it should be counted as housing delivery for the youth, and policy had to be amended for this. It had to be noted that not all the housing delivered was reported under the given categories, but it remained that work was being done.

Deputy Minister’s remarks

The Deputy Minister, Ms Zoe Kota-Fredericks said that the Subcon issue had to be dealt with once and for all. At some point the Banks were engaged to resolve the matter. People had to take personal responsibility while government took care of those who were vulnerable.

The Deputy Minister thanked the Chairperson for her comments at the beginning of the meeting. It highlighted what the issues were. She was happy with the discussion around Gauteng.

On eThekwini, the Deputy Minister said she was critical because it had always been the best performing metro when it came to the USDG, and it was the first time this scenario happened. The cause of the problem had to be found in order to salvage eThekwini.

On Gauteng, the Deputy Minister said the intervention by the national department and a motivated Accounting Officer could lead to improvement. Once Gauteng delivered, there would be a turn-around for the national department as well, and it appeared that progress was being made.

On emergency housing, the Deputy Minister said that in application it was problematic and needed to have clear guidelines. She was happy with NUSP performance and she was surprised with their achievements for informal settlement upgrades.

On FLISP, the Deputy Minister said that efforts had to be made on delivering communication and creating simpler understanding of FLISP for citizens.

The Deputy Minister was not pleased with the suggestion that the national department should provide housing for students, unless the funding for this came from the Department of Higher Education (DHET) and National Student Financial Aid Scheme (NSFAS). 

Closing Remarks

The Chairperson thanked all the officials their presentations and productive engagement.

The meeting was adjourned.

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