The Committee was briefed by the North West Human Settlements Department on their 3rd Quarter Performance Report. The Committee was pleased to hear that progress has been made by the Province in meeting their financial and non-financial targets for 2018/19, and that a recovery plan was in place to deal with seven challenges identified as affecting the Department’s performance.
The Committee heard that the Department has already embarked on the 1st phase to eradicate the backlog of unconfirmed failed searches, it has received and sent for initial searches, and it has verified the ‘on hold’ status in the quest to clean up the HSS (Housing Subsidy Systems) database. The Committee was pleased to hear that the unblocking of blocked projects during the mid-term budget review had been prioritised and that 90% of the budget had been spent for the financial year.
Members asked for more information about the following things: the delay in procurement processes; the issues of the titles; the low performance with regard to the titles; the upsurge of illegal occupation; how the Province planned on solving these issues; and whether the implementation of the new effective payment systems meant that contractors will now get paid in 30 days.
The IFP felt that there had not been much improvement with the performance of the Province and raised concern about the progress regarding completion of blocked projects and why this has been such a long process. Of further concern to the IFP was the issue of illegal occupancy and that no mechanisms had been implemented to alleviate this problem. Members were concerned about the unrest amongst communities and asked if anything was being done about this problem.
The Committee was briefed on Mangaung Metropolitan Municipality in the Free State’s Performance Report. It was noted that the previous report was not up to the Committee’s standards hence a revised report was done which was disappointing in that 100% of the allocation has not been spent; there were underperforming directorates and departments and community unrests were becoming more of a challenge.
Members heard that non-performing projects had been replaced with performing projects; and the budget of poor performing directorates had been reduced with more resources being allocated to performing directorates. The Department has spent a total of 31% of their budget at the end of January and has therefore not met their target for the end of January which was to spend 51% of the budget.
Members asked the HOD to elaborate on the methods the Department had in mind when it came to installing water metres; and what was going to be done about underperforming contractors and unfinished projects. The Committee was pleased to hear that the Mangaung Municipality had a new technical team that promised to deal with the unfinished projects as well as monitor the performance of all contractors. The Committee was equally pleased to hear that with regard to the problems with water meters, the residents’ concerns were being considered and water meters were being monitored.
Briefing on the North West Province - 3rd Quarter Performance Report
An Official from the North West Department of Local Government and Human Settlements said that the intention of the report was to brief the Committee on the following:
- Progress made by the province in meeting its financial and non-financial targets for 2018/19 financial year and
- Intervention for Section 100(1) (a) with specific key performance areas.
The 7 Key Performance Areas of intervention are as follows:
- Preparation of the 2019/20 business plan;
- Multi-year human settlements development plan;
- Appoint suitably qualified contractors;
- Performance of appointed contractors – contract management;
- Management of programmes and project performance;
- Beneficiary management and Outreach Community Programmes; and
- Repositioning of the Department to become fit for purpose.
The challenges identified that have affected the Department’s performance are:
- poor performance by contractors;
- lack of capacity;
- slow responsiveness to Subsidy Administration;
- The slow receipt of beneficiary lists from municipalities for new projects;
- Poor contract management;
- Community unrest;
- Lack of bulk infrastructure in municipalities and
- Delays in procurement processes.
As part of the recovery process the Department has appointed high capacity contractors who are already making progress. A One-on-One process is being executed to get commitment from those contractors.
Contract reviews are done regularly to determine the performance of contractors, with non-performers being put on terms with strict monitoring measures. Performing contractors are encouraged to accelerate performance.
A compressed delivery schedule was entered into with appointed contractors as well as the implementation of an effective payment system.
Financial and Non-Financial Performance
At the end of February 2019 the Province had spent R1 752 101 000. This amount is 90% of its annual budget allocation of R 1 926 644 000. There was under spending of R 55 476 000 of the R1 807 577 000 transferred until 08 March 2019.
The Province has delivered 5544 housing units of the annual target of 10994, 4631 sites of the annual target of 4453, and 3 822 Pre and Post Title deeds were transferred from the expected 19 245 annual target.
In terms of Title deeds, 1 490 Title deeds were transferred to new home owners and 3 726 were transferred to homeowners on the post-1994 programme.
Pre-1994, 96 Title deeds were transferred in Madikwe, Mabopane and Mogwase (North West Housing Corporation).
The Department has already embarked on the 1st phase to eradicate the backlog of unconfirmed failed searches, it has received and sent for initial searches, and it has verified the ‘on hold’ status in the quest to clean up the HSS (Housing Subsidy Systems) database. 14 981 failed searches were confirmed with 691 remaining.
Housing Development Agency Projects
The Department has in the 2017/18 financial year transferred R689 872 740 to the Housing Development Agency (HDA). The Department has budgeted for those projects where the HDA funding was lost to the National Treasury in the HSDG (Urban Settlements Development Grant) business plan.
The Department will take over all incomplete projects from the HDA in the 2019/20 FY (Financial Year) and implement them directly.
The Department has prioritised the unblocking of blocked projects during the mid-term budget review. The projects are at various stages of implementation i.e. Procurement and Construction.
Ms M Nkadimeng (ANC) thanked the province for their presentation and said that she appreciates the effort made into seeing that they had spent 90% of their budget for the financial year. She wanted to know more about the following things: the delay in procurement processes; the issues of the titles; the low performance with regard to the titles; the upsurge of illegal occupation; and how the Province planned on solving these issues.
Mr M Bara (DA) shared the same questions surrounding the illegal occupations, and how the Province plans on improving or reducing community eradications. He also wanted to know more about the performance improvements and in particular, whether the implementation of the new effective payment systems meant that contractors will now get paid in 30 days or not.
Mr K Sithole (IFP) said that to him there has not been much improvement with the performance of the Province. He raised questions regarding the progress of completion of blocked projects and why this has been such a long process. The issue of illegal occupants has been present for a while now and he has not seen any mechanisms being implemented to stop this from going on any longer. Mr Sithole said that he is very concerned about the issue of the Title deeds and the fact that there has not been any clear goals or targets to ensure that this issue is resolved in due course.
Mr D Kabindi (ANC) wanted to know what is being done to prevent further unrest amongst communities, and why it is happening in the first place.
Mr Mandla Magwetyan, Chief Financial Officer, North West Department of Local Government and Human Settlements responded to questions surrounding the payment of contractors. He assured the Committee that contractors are paid well within the 30 day period; the finance department experiences very little delays so much so that payments are made to contractors within as little as three days. He also said that should there be any delays within the finance department, these delays are usually due to bureaucratic reasons and processes. However, these delays never last too long.
Mr Muzi Mashabane, Director of Planning and Technical Services, North West Department of Local Government and Human Settlements responded to the remaining question around Title deeds. In terms of Title deeds, they realised that they had not been making sufficient progress, so what they have done is they have started a process of going and reviewing incomplete projects from 2014 until now.
Briefing on the Free State Department of Human Settlements Performance Report
Adv. Jupiter Phaladi, Head of the Directorate of Human Settlements, Mangaung Metropolitan Municipality, apologised that the previous report was not up to the Committee’s standards, and took the Committee through the revised presentation.
Some of the risks at present are that the City has not been spending 100% of the allocation; there has been underperforming directorates and departments; and Business forums and community unrests add to the already challenging situation.
In terms of mitigation, the Department has replaced non-performing projects with performing projects. They have reduced the budget of poor performing Directorates and allocated more resources to performing Directorates. There has been tracking and finalisation of all USDG Bids at different SCM (Supply Change Management) Committees. Contractors have been requested to allocate more resources as part of the acceleration plan and there is now a Technical Team to monitor progress of all USDG funded projects and advice EMT (Emergency Medical Training).
The Department has spent a total of 31% of their budget at the end of January. This 31% comprises of expenditure of R11 387 337 on Social Services, R 2,384,080 on Planning, R 41,758,601 on Human Settlement and Housing, R 33,850,095 on Roads and Storm Water, R 107,823,987 on Sanitation, R 30,766,122 on Water and R 589,113 on Waste and Fleet management. This meant that the Department has not met their target for the end of January which was to spend 51% of the budget.
Mr Kabindi asked the HOD to elaborate on the methods the Department has in mind when it comes to installing water metres.
Ms M Nkadimeng applauded the Municipality for the improved presentation. She was impressed with the Metro for shining light on the risks they are faced with, as well as coming to the Committee with ways to mitigate those risks as well. She mentioned the issues of underperforming contractors and wanted to know what is going to be done about this situation as well as the unfinished projects.
Mr Nthimotse Mokhesi, HOD Human Settlements, Free State Department of Human Settlements, said that he is confident that with the new technical team because now all of the unfinished projects as well as the performance of all contractors will be under better supervision. In terms of the water metres, the council has been taking the concerns of residents as well as monitoring all water meters to ensure that there are no problems where this is concerned
The Chairperson thanked all in attendance
The meeting was adjourned.