Western Cape Additional Adjustment Appropriation Bill: Department of Human Settlements, with MEC

Human Settlements (WCPP)

12 March 2019
Chairperson: Ms M Maseko (DA)
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Meeting Summary

The Department of Human Settlements (DHS) appeared before the Committee to discuss the 2019/20 budget. It had received an additional appropriation of R83 million from the national DHS after it had applied for a disaster grant in response to the devastating fires in Khayelitsha and Phillippi. Members wanted to know if the grant was also intended to cover other areas that had experienced fires, and whether the victims would be relocated back to the same land where the fires had happened.

Other issues raised included the criteria used to employ consultants, how non-governmental organisations (NGOs) were appointed to assist the DHS and the municipalities in planning, and the Department’s plan to address the issue of backyard dwellers who had been on waiting lists for a very long time.

All Committee Members supported the additional adjustment appropriation. However, the African National Congress (ANC) Members did not support the main appropriation.

As this was the last meeting of the Committee in the current Parliamentary term, Members took the opportunity to express their appreciation of the work done by the Department, under the leadership of the Minister. The Department, for its part, thanked the Committee for its guidance and support over the past five years.

Meeting report

Opening Remarks

The Chairperson said that the meeting was going to consider the budget Vote Eight (Human Settlements). The Committee had received the Additional Adjustment Appropriation Bill. so the meeting was going to deal with two bills.

Additional Adjustment Appropriation Bill

Mr Thando Mguli, Head of Department (HOD): Western Cape Department of Human Settlements (DHS), said that the Department had received an additional allocation from the national DHS. He asked Mr Francois de Wet, Chief Financial Officer (CFO), to brief the Committee on how the Department received it, how it was received and how it was going to be spent

Mr De Wet said that there had been two big fires in Khayelitsha and Philippi. The NDHS was approached to apply for funding out of their disaster grant. The application was approved and that was why the Department was given the R83 million. The Department would be going out on tender for 1 350 emergency housing units.

Ms S Davids (ANC) asked if the application was only for Khayelitsha and Philippi. What about the other areas where there had also been fires? How was the Department going to break down the money for Phillippi and Khayelitsha? Would the people affected be moved to the same piece of land? Was the Department going to work from a waiting list in order to allocate houses to fire victims?

Mr Mguli responded that the application was only for Khayelitsha and Philippi. At the time that the application was done, it was for those fires. However, there was also another fire that had occurred in Wupperthal. The Department had just done an application and was awaiting the outcome on that. However, the work was progressing. The Department had taken the risk to continue with the work at Wupperthal while awaiting the funding. It was not finalised yet, but the anticipation was that it would be approved.

He said that the people would not be moved back to the same piece of land. The Department had identified certain parcels in Khayelitsha near the area where the fire took place, which was owned by the city. Negotiations had been made with the city for the Department to build temporary residential areas (TRAs), and the Department was scheduling for them to become permanent residential areas (PRAs). The aim was to use them as transit homes in times of crisis.

For the Kosovo part, the Department had bought a parcel of land on the wedge. It could build TRAs that could be considered as PRAs, which were elegant, decent and dignified. The victims of fire would be moved to these TRAs to prevent another future fire from happening while the Department was building permanent houses for the people in Kosovo.

Mr Mguli said that the Department would be looking at the victims first that were identified by name and clan on the list. It would also be looking at those people who were so congested that it could trigger and emergency. These units would never be owned by the beneficiaries. They would be owned by the provincial government and utilised for future crises that may happen.

Ms Davids asked if the people staying temporarily in a permanent structure would be paying rent, given that it still belonged the provincial government. She asked for clarity on where the people would be taken when they left the TRAs. Were they going back to shacks, or would they be going to a permanent structure?

Mr Mguli responded that the people would not pay rent. The grant was an emergency grant. It was meant for people in a crisis. They would be placed there as a holding area for their future homes.

Main Appropriation: Discussion

Ms Davids asked Mr Bonginkosi Madikizela, Member of the Executive Committee (MEC): Western Cape DHS, to explain the criteria used to employ consultant enterprises. She also observed that the MEC had talked about sustainable land in the foreword, but according to the foreword, only 133 hectares had become available. She asked if this was equivalent to small farm.

Mr Madikizela said the Department used the normal process to appoint consultants. However, the accounting officer was in a better position to provide more details because he was the one who was involved in the appointment of consultants.

He explained that one hectare was equivalent to two rugby fields. 133 hectares of land might seem like a big piece of land, but if one took into cognisance the rate of the population growth in relation to the demand, there was a need to make wise use of that piece of land. There were substantial pieces of land, but how the land would be used going forward was going to be very important.

Mr Mguli said that when the Department did business, it did so in a very orderly manner, in full compliance with supply chain management (SCM) prescripts, and in full adherence to the Public Finance Management Act) PFMA. It had gone out on a call for tenders for all service providers in the built sector professions or real estate who wanted to do business with the Department. These companies were adjudicated to see if they were competent to do the work. After that, they were placed in a framework. However, being in the framework was not a guarantee for a job. When work opportunities came, the companies were derived from that framework to make sure that those enterprises received an equitable fair share of the work opportunities in the Department. That was how the Department appointed professional service providers.

Ms T Dijana (ANC) said that the DHS had appointed eight non-governmental organisations (NGOs) who would serve as intermediaries in communities and support the Department and municipalities to plan. She asked if these eight NGOs were going to cater for all the municipalities in the province.

Ms Rika van Rensburg, Director: DHS, responded that the Department advertised for NGOs to register on the database. Only eight of them were found to be responsive to what the Department needed. These NGOs were then linked to specific municipalities and they did the work there. However, they did not just go in to do the work. The Department, municipalities, communities and the NGOs jointly decide on the nature of the intervention that is needed. Based on that, the scope of work is drafted. That scope of work gets assessed and the Department issues an appointment letter based on the process that is used to assess whether there had been an agreement on the costing.

Mr T Simmers (DA) was concerned about the backyard dwellers. According to the budget there were about 55 000 housing opportunities. He asked how many of those opportunities were for backyard dwellers. He had recently visited two individuals. One was a 72-year-old lady who had been on the waiting list for 26 years, and her daughter, with cancer, who had been on the waiting list for 18 years. They were all backyard dwellers. How many of these opportunities were for backyard dwellers like these?

Ms Davids was concerned about the Expanded Public Works Programme (EPWP) amounts in the budget. She asked how this was going to be implemented. Currently, in municipalities with the EPWP, they did not use it for housing opportunities or for people working in the housing department. She asked if the province was going to implement the programme.

Why was so little money allocated to sub-program 2.3: planning? Why was there a decrease in sub-program 3.3: administration and financial interventions? She noticed that there was a decrease associated with sub-program 4.2: housing properties maintenance, and asked for an explanation for that.

Mr Madikizela responded on the backyard dwellers, saying that the criteria for housing allocation were very simple. One must be a South African, must earn less than R3 500, etc. More importantly, the principle of first come, first served applied. If one registered for a house 20 years ago, they had to get it before someone who registered five years ago.

He said the Department had a number of programmes within the hosing cohort under which developments were done. There were “brownfields” and “greenfields.” In a brownfield, the Department embarks on the upgrading of informal settlements by looking at the criteria and not the waiting list. However, in all the greenfield projects, waiting lists were the prerequisite. It meant that before one got a house, one must have been waiting on the housing demand database for some time. However, there were a number of people who had been claiming that they had been waiting for years. Part of the problem was that for those people who had been waiting for years, it happened that they might be on the waiting list but when it was time to contact them, they could not be reached because their details had changed so many times. Their information on the housing demand database had become outdated, so they could not be tracked. Also, for some reason, some of the people did not appear on the waiting list even though they were backyard dwellers who had been waiting for years.

Part of the proposal to bridge this gap was that the DHS should work with various structures, whether local authorities or community organisations, to find a way to bring those people into the project. The organisations working with the Department could bring these people forward and add them back to the project. Under such circumstances, the Department would make exceptions to the rules.

Mr Simmers highlighted that in the Oudtshoorn municipality, with what was happening at the local government level, the problem was not with the Department,. The Department had good intentions, but when it came to filtering it down to local government, there were housing list manipulations.  A beneficiary might be approved, and the name sent through to the head office in Cape Town, but for some or other reason a municipality might suddenly change the beneficiary list and removes this individual. He asked if there was another way in which one could handle the allocation of beneficiaries.

Mr Madikizela responded that the Department always emphasised the roles of the different spheres of government. It did not dictate to municipalities which areas to prioritise when they planned for developments. The biggest problem at municipal level was that their project identification was not informed by the factors that should inform it.

The biggest problem in Oudtshoorn was that they had always prioritised the Upgrading of Informal Settlements Programme (UISP), which was a problem, instead of prioritising people who were on the waiting list. There were people who had been on the waiting list since 1960. It was the responsibility of the municipalities to identify the areas which were oldest in the waiting list and then prioritise them in the business plan when applying for funding. There was a need to address the correct prioritisation at the municipal level. Oudtshoorn had failed to get the prioritisation right for a very long time.

Mr Mguli responded that the EPWP budget was not going to be transferred to the municipalities. The Department would be using the entire EPWP budget as it was. It was too little in comparison to the total budget, and the Department was currently using it to look after the TRAs.

He said that on a year by year basis, the allocation given to planning was increasing. The allocation to planning should not be compared to other directorates, because planning was associated with non-infrastructure delivery, and they were therefore fully resourced in terms of the financial resources required to do the work that they needed to do. The hardcore budget absorbers were usually in infrastructure. The amount allocated to planning was adequate for them to carry on with the long-term planning initiatives. When the need arises, additional allocations are allocated.

Mr De Wet said that the grant was being administered in Program Three. If professionals had been appointed to assist with planning, it fell under financial interventions. Financial interventions had been allocated R83 million. That was why there had been a decrease this year. The Department did not know of any further funding that it might get for disasters at the moment.

Under the same programme, the Department funded the Finance Linked Individual Subsidy Programme (FLISP) -- the individuals and the operational capital. Provincial Treasury, via structures in provincial government, had given the Department an additional amount of R50 million for salaries. That had been allocated to subsidies, so the Department was funding fewer people from its subsidy money. That was the reason for the big decrease in that programme.

Regarding the decrease on maintenance in Program Four, Mr de Wet explained that the Department was phasing out the Western Cape housing development fund. There were fewer properties to be maintained, and in the future, there would be nothing to be spent on maintenance.

Ms Davids said that the Minister wanted to take the FLISP forward to make sure that there were enough houses for people. She asked for clarity on how the decrease was going to influence the pace at which the FLISP was taken forward.

Mr De Wet clarified that the FLISP was a pre-1994 programme, and the Department was phasing it out and would be moving forward with other programmes that needed to be done.

Mr Madikizela added that Mr De Wet was referring to old pre-1994 data of the Department. These involved the people who had been paying all this time, but some of them could no longer afford to pay because they were either old or were not working. What the Department had done was to reward these people by making subsidies available so that they could pay off their debt.

For any community residential unit to be sustainable, people needed to pay. The biggest challenge across the province was that the maintenance was more than what people were paying. There was a difference between people who could not afford to pay and people who refused to pay. There were people who could pay but refused to pay. The Department could not carry the burden of those people who refused to pay when they could pay. So, for any rental stock to be sustainable, the Department must at least break even.

Ms W Philander (DA) asked if the rental stock would be disposed of for people to become owners of that stock.

Ms Phila Mayisela, Chief Director (CD): Western Cape DHS, said that four years ago, the Department had written to municipalities to take over the rental stock that was in municipal areas. They had written back and indicated that they accepted the opportunity to take over. These municipalities included Stellenbosch, Drakenstein etc, so the Department would be letting go of the stock within the jurisdiction of these municipal areas.

Ms Philander asked whether the municipalities would be maintaining the stock or would give it to those occupying it.

Ms Mayisela responded that the municipalities had an option of keeping it. The councils would have to take a decision to either transfer it to the individual beneficiaries, or retain it as rental stock and manage it.

Closing comments

The Chairperson said that there were no more questions, and asked Members to give their closing remarks as this was the last meeting with the Department -- the fifth term of Parliament was coming to an end.

Ms Davids said that she had learned a lot in the Committee. She had been inspired by the Department, especially the HOD. She advised the Department to keep up with the good work it was doing. She also thanked the Chairperson for her good leadership of the Committee.

Ms Dijana thanked the Chairperson and the Department. She said that she had also learned a lot. There would be new Members in the sixth Parliament. Some of them would not know anything and some of them would know what was happening. She advised the Department to be the same people as they were now, and treat the new Members the way they current Members were being treated.

Ms Philander advised the Department to keep on serving the communities with distinction. This was one of the most challenging departments, but it had always served the communities with a very humble approach.

Mr Simmers said that the DHS under the leadership of Mr Madikizela for the last ten years, had done exceptional work. As a councillor for six years, he had seen the effect that the good work of the Department had had on the people. Mr Madikizela and the Department had changed thousands of lives and restored their dignity. He thanked the Minister and the Department for that.

The Chairperson thanked Minister Madikizela for the work he had done. The changes that the Department was making in the communities were appreciated by the Committee Members as public representatives. She also thanked the HOD for his leadership. The passion with which the HOD did his job rubbed off on the Committee Members. She thanked the whole Department for making a difference in the Western Cape.

Mr Madikizela said that it had been a very interesting ten years for him. He appreciated the Committee Members for their genuine concern over the issues affecting communities. Even though they came from different political parties, they were not here to play politics. He thanked the Committee for keeping the Department on its toes.

He said he had been fortunate because he had the most competent staff that one could hope for. The officials in the Department were so competent that they could be anywhere they chose to go. However, they were in the Department because they had the passion, drive and dedication to change peoples' lives.  For them, it was a calling to be working in this Department.

Mr Mguli thanked the Committee for all the support that they had given to the Department. The critiques of the Committee enabled the Department to enhance the programme of action that the DHS had implemented. If the Department had succeeded, then the Committee had also succeeded. He wished everyone the best for the future.

The Committee supported the additional adjustment appropriation.

The African National Congress did not support the main appropriation.

The meeting was adjourned.  

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