Immovable Asset Register progress report & Land identified for redistribution: DPW & DHS briefings, with Minister

Meeting report

Briefing by Department of Public Works (DPW)
Ms Swanzie Matthews, Deputy Director-General: Real Estate Investment Registry Services (REIRS), DPW, focused her presentation on the progress to date regarding the enhancement of the Immovable Asset Register (IAR). She provided the historical context of the IAR. The new constitutional dispensation radically changed the old structure of government and determined the identification of the state’s property holdings and vesting of land parcels to confirm ownership of land parcels under the custodianship of the national and provincial government. It also determined the physical verification and condition assessments that must be conducted in accordance with the relevant accounting frameworks and section 13 (1) (d) (iii) of Government Immovable Asset Management Act.
 
In order for the IAR to be complete, it has to comply with the National Treasury Immovable Asset Guide; PFMA, GRAP, Government Immovable Asset Management Act (GIAMA) and National Treasury Guideline; and be reconciled against deeds records, Property Management Information System, DRDLR Vesting Data (LAW), User Asset Management Plans, Devolved Properties, Chief Surveyor General, and other national and provincial IARs.
 
With regard to progress on the IAR enhancement programme, she reported that a physical verification of the identified land parcels was done to confirm, amongst other things, the use of the property, nature of the facility, improvement on the facility, etc. A desktop clean up and analysis is done to achieve a cleansed list of land parcels to be physically verified, to obtain supporting documents for the land parcels to confirm ownership, and drawing of footprints to establish extents of buildings per site. A Land Register is also compiled by considering the initial DPW Immovable Asset Register, reconciling other custodians like provinces and DRDLR, including the Deeds download. Further, the Department compiles an Improvements Register based on the GIS Maps and physical verification, and the compilation of the Components Register is based on predefined components in order to comply with GRAP and valuations are conducted.
 
Ms Matthews stated the confirmation of vesting of state properties was a constitutional requirement to confirm ownership between national and provincial government spheres, and it was a legal requirement to deal with any transaction on a Title Deed of a State-owned property in order to eliminate historical names like the Union of South Africa, Republic of Transkei, Administrator of the Cape of Good Hope, etc. In terms of the Constitution the Title Deeds must reflect the name National Government of the Republic of South Africa.
 
She said the identification of properties, submission of applications to the Provincial State Land Vesting and Disposal Committee, and processing of applications on Land Administration Web at the DRDLR was the responsibility of all custodians, while the issuance of Item 28 (1) Certificate was the responsibility of DRDLR Pretoria office. The use of GIS and software tools and technology has enabled the department to consistently improve and maintain its IAR.
 
Concerning critical projects and deliverables, she stated the Department, amongst other things, needed to address management assertions and AG findings to improve the audit outcome for 2018/19; establish and maintain an Expropriation Register for all spheres of government including SOEs in line with Clause 26.1 of the Error! Hyperlink reference not valid.; implement the Itemised Billing Project; and develop a single repository which would be a national database of state properties.
 
(Tables and graphs were shown to illustrate REIRS links to PMTE and external stakeholders; inputs and key dependencies for a GRAP compliant IAR; application of the fair value / deemed cost model; DPW / PMTE portfolio breakdown; vesting process and vesting statistics as at February 2019; and land parcels represented spatially)
 
Mr Mkhacani Chauke, Acting Chief Director: Asset Register Branch, DPW, briefed the Committee about the identification of agricultural state land for redistribution. He said available land was referring to land that was not utilised or under-utilised by the state. This included land owned by the national and provincial governments, municipalities, and state-owned enterprises. The urban land was excluded from the process.
 
He outlined some of the following parameters for identifying vacant and partially vacant land:
 
-       the land parcel is located on suitable terrain capability
-       the land parcel is less than 10% within an indigenous forest
-       the land parcel is not located in an area which is likely being used for grazing
-       the land parcel is not part of Pro-active Land Acquisition Strategy (PLAS) land and land acquired by the Commission on Restitution of Land Rights
-       the land parcel is not unregistered
 
The analysis of agricultural state land begins with identifying state land within the Deeds Registration data. Registered owner name is national, provincial, municipal or it should be a state owned enterprise. Discrepancies between the deeds registry data and cadastral information were the cause for many properties that could not be mapped at all, and mapped properties were often not accurately represented. The identified property (deeds registry data) should be linked with cadastral data (CSG data).
 
He stated the analysis focused on properties with linked and linked unsure status, discrepancies associated with linked unsure properties that are accepted while properties not linked were excluded from the analysis. After applying the parameters during the GIS analysis, the results indicated that approximately 3 653 agricultural state land parcels were available for redistribution, and the extent of these land parcels was approximately 2.9 million hectares. The majority of land parcels were available in
North West (approximately 782 land parcels or 21.4%), Eastern Cape (approximately 593 land parcels 16.2%) and Limpopo (approximately 587 land parcel or 16.1%).
 
In his conclusion, he said there were cases where the DRDLR entered  into Option to Purchase agreements and did not honour them; signed Sale Agreements and did not honour them; and Sale Agreements that were honoured but the National Treasury didn’t approve them for lack of market relatedness. There is DAFF and DPW Financial Assistance Land (FALA) that has got leases with options to be purchased that have not been honoured by the government.
 
(Maps were shown to illustrate suitable, non-suitable, and strategically available state land for redistribution; and mapping status of properties for the linking process)
 
Ms Sasa Subban, Deputy Director-General: Real Estate Investment Services (REIS), DPW, talked about the land reform programme. She said the programme consisted of land restitution, land redistribution, and land tenure. Regarding land restitution, the Constitution provides that persons or communities who were dispossessed of property after 19 June 1913 as a result of past racially discriminatory laws or practices were entitled in terms of an Act of Parliament to restoration of that property or to equitable redress. In line with SONA and High Level Panel recommendations, 43 land parcels have been earmarked for land restitution in 2018/19. To date, 14 land parcels measuring 7406.1128 hectares have been transferred to DRDLR. The release of 26 land parcels was in progress and would be finalised by end of March 2019.
 
Land redistribution was aimed at providing the formerly disadvantaged and the poor with access to land for residential and productive purposes. Its scope includes the urban and poor rural, labour tenants, farm workers as well as new entrants to agriculture. Tenure reform is intended to provide secure tenure for those living for a long time on land owned by others including state properties without secure rights. The targeted persons include farm workers, former farm workers, as well as labour tenants.
 
She reported that DPW would support the fast-tracking of land reform initiatives in the Strategic Spatial Planning Programme. Well located land would be identified for land reform purposes to address the racial and spatial imbalances of the past using the Asset Register as the source data and in alignment with the draft National Spatial Development Framework. This would support an integrated and programmatic approach to land availability and development.
 
Through the Financial Assistance Land (FALA) Programme the DPW was facilitating the transfer of land to the qualifying beneficiaries in terms of the set criteria. In this regard, 1017.0662 hectares of land has been approved for transfer to beneficiaries with Title Deeds. Further, the Department was in the process of issuing 33 title deeds to emerging farmers. Conveyancing of 33 land parcels was also currently under way.
 
Finally, she said 77 land parcels were identified for Human Settlements of which 20 properties have been valued at approximately R250 000 000. The Draft Compensation Framework has to be served before the National Treasury before being presented to Executive Committees of both DPW and DHS.
 
Briefing by Department of Human Settlements
Mr Lucien Rakgoale, Land Acquisition, Housing Development Agency, said that their focus during this MTSF period was on the implementation of a coherent programme to transform human settlements and to ensure the delivery of housing was used to restructure towns and cities and strengthen the livelihood prospects of households and overcome apartheid spatial patterns.
 
Their main objective was to eliminate legacy imbalances in the distribution of housing typologies in developments and to ensure the delivery of services towards a more inclusive and integrated residential landscape.
 
By 2030 the Department would like to have achieved measurable progress towards breaking apartheid spatial patterns with significant advances made towards retrofitting existing settlements offering the majority of South Africans access to adequate housing, affordable services in better living environments within a more equitable and functional residential property market.
 
He stated the identified state properties by the DPW were representing the first batch of state land required for human settlements development purposes. In line with the Inter-Ministerial Committee Land Reform mandate relating to the accelerated Land Reform Programme, the identified properties could be released by a way of a Power of Attorney in favour of human settlements to ensure immediate development and infrastructure planning. The location of some of the DPW land was critical to achieve spatial transformation through integrated sustainable human settlements.
 
(Tables and graphs were shown to illustrate identified DPW land for human settlement development, summary of DPW identified land, development status of released DPW land, and Human Settlement housing and land backlog)
 
Discussion
 
Deliberations with the departments
 
It must be noted the three departments did not engage with the committee members because of time constraints. However, Human Settlement managed to make few comments on some of the concerns raised by the members. All the departments were asked to respond in writing to questions relevant to them. Members indicated they were impressed by the way the Department of Public Works responded in writing and the other departments were expected to respond in the same fashion.
 
The Minister of Public Works asked the Department of Human Settlements to explain what it meant by the Power of Attorney because his department has transferred land to the people and government gratis because there was going to be construction of houses for the poor. There were big businesses that have been making money from this transferred land and the department was not benefitting from them. That was why he asked what the power of attorney meant in this context.
 
Mr Mashabane, Deputy Director-General, DHS, explained that land has been released in the past for Human Settlements. Commercial development happened and the state did not get anything in return. Once the land is made available to Human Settlements, before it gets transferred, there is always an agreement in place on what the land is for in order to have a seamless chronological plan for its use to avoid having it used for commercial purposes. The Department was guided by the NDP and overarching policy for Human Settlements development. Some properties were identified because people have settled and the tenure of beneficiaries was secured. There have been agreements where the land has been released for people, but people could not have title deeds because the agreements entered into were not thoroughly exhausted.
 
Mr M Filtane (UDM), first, wanted to understand how the Department identified a vacant land parcel when it was using a desktop system or clean-up. Second, he asked how the Department arrived at the R126 billion figure which was the value for land parcels. Third, he wanted to find out if the Department of Public Works had enough manpower to establish the existence of land parcels over and above the desktop system. Fourth, he asked for clarity on why the Department of Public Works was negotiating with the Ingonyama Trust for land because the whole 2.9 million hectares of land belonging to the Ingonyama Trust was the property of the state. Fifth, he wanted to establish why the scope of land redistribution was excluding urban land yet Stats SA indicated most of SA population in future would move to urban areas. Sixth, he wanted to find out why the Department had a disclaimer on state land available for redistribution because that would be making it difficult for the Committee to do its work.
 
Mr D Ryder (DA), first, wanted to understand if the 201 land parcels of the 298 to be released by the Department for restitution purposes were falling under those parcels that were still to be verified. He said some of those parcels were potentially owned by the state. Second, he remarked there were different figures that were being given to the Committee with regard to the asset register, and this was making it difficult for them to understand which figures were correct. Third, he asked how many hectares were going to be given to Human Settlements from the 20 million hectares of land owned by the DRDLR. Fourth, he commented that DRDLR was bringing the government into disrepute because it entered into sale agreements it did not honour and that was a poor reflection on government as a whole.  Fifth, he asked what level of cooperation the Human Settlements was receiving from the Department of Public Works in terms of planning and development to ensure sufficient property was set aside for government services. Lastly, he remarked the land restitution process was 25 years old and needed to be fast-tracked to demonstrate the government’s commitment because people have waited for a full generation. The majority of SA people were hungry for land, especially for human settlement.
 
Dr M Figg (DA), first, wanted to know what the timeframe was for the vesting process. Second, he asked what the backlog was on title deeds before people could be owners of the land, and what the costs were for issuing title deeds and if the government had money for such work. Third, he wanted to find out about the location of the identified land parcels that have been identified. Fourth, he wanted to establish if there were any actions taken against contractors who were building poor houses that collapse after five years, and that some of these houses were being given to beneficiaries even though they were still incomplete. Fifth, he asked what the figure was for the housing backlog and if the targets would be met. Finally, he wanted to understand why the land redistribution process has not been sped up and where the constraints were because land was available even though the figure for land redistribution was very small, and asked if there was enough budget for the process.
 
Ms E Masehela (ANC) was concerned about the situation that people were leaving rural areas and moving to the cities. She further asked for clarity on the vesting statistics; and wanted to understand why the DRDLR did not honour the Option to Purchase agreement it entered into.
 
Dr Q Madlopha (ANC) wanted to find out about the locations of the 33 emerging farmers who would be issued with title deeds and how the process was going to be done. She also asked how communities were going to be integrated because low cost houses were being built in rural areas but people preferred to go to urban areas in search of work opportunities. She further commented that title deeds were not handed over because it was not clear who the owner was between the municipality and province. Lastly, she wanted to establish how DHS was going to measure that houses would be given to the needy people because people were being given houses which they rented them out.
 
The Chairperson remarked that South Africa was vast and mainly rural. Metropolitan areas were few and heavily congested because many young people staying in these metropolitan areas were empowered and driving cars. He suggested that DRDLR should start making rural areas relevant and user-friendly in order to retain people. It was clear there was no strategy to keep people in rural areas. He further indicated there were no clear plans for community integration because there were many open spaces near Sandton which were not used. He stated there would come a time when people who were oppressed by apartheid would rise against DHS because it appeared they had doubts of what they were doing.
 
Mr Lucien Rakgoale, Manager: Land Acquisitions, Housing Development Agency, reported they have donated land to municipalities while other thousands of hectares of land were given to the HDA for developing the rural areas to reduce congestion in urban areas. He said where the Department of Human Settlements own the land, the Department does not sell it but enter into a long-term lease of 30 years for job creation. Most of these leases were happening in communal areas.
 
Mr Mashabane informed the Committee there was no single human settlement that was not subsidised by the municipality. Different investments in these settlements serve a different purpose in time because housing was a priority. Other supporting amenities do not come at the same time like houses. Investment comes much later. That was why the Inter-governmental Planning Policy has a programme to address all these competing priorities even though time was the challenge. Everything depended on the prioritisation of the budget by the municipality.
 
Regarding land for government services, he indicated it was not that land was not available, but the main issue was the availability of the budget to provide for those services. Land use management was the function of the municipality and at the same time a function of economic policy development.
 
An official from the Department of Human Settlements said there was a benefit for municipalities to sell land to middle-income and upper-income households. Another challenge was that they suffer from budget cuts when it comes to grants. When projects are implemented, he said, there was thing of looking at the cost-benefit analysis. Spatial and racial integration was what they wanted to do, but the challenge was around the cost-benefit analysis.
 
Mr Mashabane further admitted they were aware the housing backlog was a challenge facing SA. Households, over time, have been shrinking from nine to three or four. He pointed out there was duality residency in SA where an urban dweller has got a house in the urban areas while another one was in the rural areas. As a result, resources were stretched to maintain these two properties.
 
Adoption of Minutes
 
19 February 2019 minutes
 
The Chairperson took the members through the document, page by page.
 
Mr Ryder proposed for the acceptance of the minutes.
 
Mr Filtane seconded the proposition.
 
The minutes were adopted with no amendments.
 
The meeting was adjourned.