Western Cape Appropriation Bill: Vote 8 Human Settlements

Human Settlements (WCPP)

12 March 2020
Chairperson: Ms M Maseko (DA)
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Meeting Summary

The Western Cape Department of Human Settlements (DHS) briefed the Committee on the provincial budget allocation as proposed in the Appropriation Bill [B3-2020]. Vote 8 of the Bill’s schedule set out an amount of R2.41bn for the Department. The Minister said that additional adjustments to the appropriations had been granted to the Western Cape as a result of the under-performance of other provinces. The Western Cape was one of the lucky provinces to receive an additional R98.5m due to its performance, and because it was the only province operating at spending nearly 100% of its budget before the end of the financial year.

Members raised questions about the perceived unequal distribution of allocations to the different municipalities in the province, with the southern Cape seemingly being favoured above the central Karoo region. Other issues highlighted were the extensive use of consultants by struggling municipalities, the backlog in providing housing beneficiaries with title deeds, community scepticism over the reliability of the beneficiary lists, and inadequate efforts being made to address spatial transformation.

The Committee adopted the draft Committee Report on Vote 8 of the Bill, with the GOOD party withholding its support

Meeting report

The Chairperson opened the meeting and welcomed the Members and the delegation from the Department. The purpose of the meeting was for the Committee to deliberate on Vote 8 as included in the Schedule of the Appropriation Bill in order for the Committee to consider and adopt the Draft Committee Report on the Vote. Another item on the agenda was the consideration and adoption of the Draft Committee Minutes for a previous meeting regarding the Adjustments Appropriation Bill of 2020 that was held on 12 February 2020.

The delegation from the Department consisted of Mr Tertius Simmers, Minister of Human Settlements in the Western Cape; Ms Jacqui Samson, Head of Department; Mr Francois de Wet, Chief Financial Officer; and Ms Phila Mayisela, Chief Director: Implementation.

Background on Vote 8

Minister Simmers explained the provincial budget allocation for the Department of Human Settlements (DHS), as allocated in the Appropriation Bill B-2020. The Bill’s schedule outlined the appropriation by the Provincial Parliament of money from the Provincial Revenue Fund for the requirements of the Western Cape Province in the 2020/21 financial year.

Vote 8 of the schedule sets out an amount of R 2.41bn for the DHS. The aim is to provide settlements that offer good basic and socio-economic services to South African indigent citizens. Its goal is to offer a range of rental and ownership options that respond to the varied needs and incomes of households, and to consistently improve existing settlements through joint citizen and government efforts that are supported by private sector contributions. Overall, R267m was allocated for the compensation of employees; R118m for the procurement of goods and services; R1.39bn for transfers and subsidies; and R55m for the payment of capital assets. An amount of R 2.12bn was specifically and exclusively appropriated for the DHS.

Administration:

R 116.4m was allocated to the Division of Administration with the purpose to provide overall management in the Department in accordance with all applicable legislation and policies. Of this amount, R 88m was allocated to the compensation of employees, and R 21m was allocated to the procurement of goods and services. R 264 000 was allocated to transfers and subsidies, R 5.4m allocated to the payments for capital assets, and an amount of R 300 000 to the payments for financial assets.

Housing needs, research and planning:

R27.6m was allocated to the Division of Housing Needs, Research and Planning, for the purpose of facilitating and undertaking housing delivery needs, research and planning. Of this amount, R25.6m was allocated to the compensation of employees (CoE), and R2.05m to the procurement of goods and services.

Housing development:

R2.23bn was allocated to the Division of Housing Development for the purpose of providing housing opportunities, including access to basic services, to beneficiaries in accordance with the National Housing Code of 2009. Of this amount, R126.1m was allocated to CoE, and R84.9m to the procurement of goods and services. R 2.02bn was allocated to transfers and subsidies.

Housing asset management:

R37.9m was allocated to the Division of Housing Asset Management to provide for the strategic, effective and efficient management, devolution and transfer of housing assets. Of this amount, R26.5m was allocated to CoE, and R10.3m to the procurement of goods and services. R1.05m was allocated to transfers and subsidies.

Presentation by Department: Additional Adjustments for Vote 8

The Chairperson asked the Department to present their comments regarding the additional adjustments estimates for Vote 8.

Minister Simmers said that the additional adjustments to the appropriations had been granted to the Western Cape as a result of the under-performance of other provinces. The Western Cape was one of the lucky provinces to receive an additional R98.5m due to its performance, and because it was the only province operating at spending nearly 100% of its budget before the end of the financial year.

Ms Jacqui Samson, Head of Department, echoed the comments of the Minister regarding the Department exceeding its targets for the year. The Department had requested an increased budget from the national DHS to provide an equitable share from the excess funding available, due to the under-expenditure in other provinces. The additional amount that was available due to the under-expenditure of other provinces had been shared equally among four provinces in the country.

Discussion

Mr D America (DA) sought clarity on the R10m that was listed as to be utilised for the construction of top structures as part of a housing project using alternative technology in Breedevallei, particularly on the type and nature of the alternative technologies. Further clarity was sought on the R250m that was budgeted to be utilised for departmental priority projects, particularly on what those priority projects were.

Mr P Marran (ANC) enquired about the Department’s statement claim of spending of almost 100% of their allocated budget for the 2019/20 financial year. Did the Minister think that municipalities like Breedevallei and George, where the Department had failed to spend R82m on the Transhex Project, was compatible with the this statement with reference to those specific municipalities?

Mr A van der Westhuizen (DA) commented that the Department and its budget had always been a very interesting one, because there were very few other departments which had to rely so heavily on partnerships and on local governments as the DHS had to. Secondly, many of the Department’s projects took years to reach completion, due to the environmental impact assessments and other factors. The first question was whether the Department could assure the Committee that there were enough projects in the pipeline that would allow the Department to spend its additional funding as requested. The second question was regarding the fact that the Department’s equity share allocation had been cut, and that the Department had to rely more and more on external consultants. In the public service, the use of consultants was questioned. What could the Department do to have those consultants rather transfer their skills to a full-time basis as public officials, or was this something that should be accepted as part of the landscape of the Department? The third question was on the contestation of beneficiary lists and the public’s scepticism surrounding the integrity of such lists. He commended the Department for its communication with beneficiaries, but asked what its plan was to improve and aid local governments in fine-tuning their beneficiary lists and communication methods.

The Chairperson reminded Mr Van der Westhuizen that the discussion was focused the additional adjustments received, and that the enquiries presented were best suited when deliberating on the Vote 8.

Mr Van der Westhuizen apologised, and said he was following the meeting’s agenda, as had been provided.

Mr A Lili (ANC) asked the Minister about the serviced sites that already existed around the province, and how much had been allocated to such sites.

The Chairperson confirmed with Mr Lili that his enquiry was on the main budget, and instructed him to hold such inquiries until the main budget was under discussion. The Department was invited to present their answers to the questions of the Members.

Department’s response

The Minister addressed the question regarding the Transhex project and the alternative technologies that were being utilised, which included the Moladi alternative construction method. The modes had to be adjusted to be compatible with the Department’s typologies, and had thus caused the three month delay, but the site was currently up and running.

The R82m that Mr Marran had alleged the Department had failed to spend, had been allocated to the payment of bulk services, such as electricity provided by Eskom. Given the current state of Eskom, the Department had shifted the R82m to Forest Village -- a site that was ready for implementation -- to avoid the Western Cape being reflected as a province unable to spend its allocated funds. This meant that the Department was in line to spend its budget at approximately 100%.

Regarding Mr Van der Westhuizen’s queries on the main budget, the Department had picked up through the verification drive through the metropolitan area that it appeared that not many of the municipalities kept their beneficiary lists up to date. This had a knock-on effect on the integrity of the Department’s beneficiary lists, which would be thoroughly addressed during the discussion on the main budget. The Committee should have received the Department’s invitation to the provincial Apps launch, or should receive it later today. The Department was integrating all 30 municipalities on a comprehensive electronic interactive platform,

Ms Samson addressed the question regarding the priority projects, and said the R80m had been reallocated to other projects because of bulk services that could not fully be extended, which constituted the R30m and the R50m that had been referred to, and included the Forest Village project. The individual subsidies were for those persons who came forward who had a housing opportunity and co-funded themselves, and the Department then provided a proportional subsidy.

On the credibility of the housing demand database, the Department had greater control over the non-metropolitan databases, and was in contact with the City of Cape Town to determine how the Department could assist in improving the performance of their housing demand database. The Department had noted the problems associated with the uncertain credibility of the housing demand database and its negative impact on housing opportunities. Before the Department did the verification drives in the non-metropolitan areas, it reached a Memorandum of Understanding (MOU) with the various municipalities to ask them to clean up their databases before the end of October 2019. In this process, all outstanding documents had to be collected by the municipalities, and in an effort to supplement the data from the municipalities, the Department had then conducted the verification and registration drives. These efforts had improved awareness of the need to register, and citizens had come forward to verify their information or to register as new beneficiaries.

Mr America referred to the R250m that had been earmarked for the Department’s priority projects, and reminded it to address the earlier question on this subject.

Mr Francois de Wet, Chief Financial Officer (CFO), addressed this question by stating that the Department had requested R207m to be used for such priority projects. As the Committee knew, the Department was busy with the Southern Corridor Catalytic project, and wanted to fast track the progress, as additional funding had been approved by the national Department, which allowed for the spending of that money. On Forest Village, the Department wanted to allocate R36m of the budgeted R 207m. It had professional services at Pniel and other similar sites that were in the planning phases.

The Chairperson proceeded to the second part of the meeting, which dealt with the main budget for the Department.

Presentation by Department: Main provincial budget for DHS

The Minister said that in preparation for the budget, the Department had engaged all municipalities to paint a picture of how it should function with a budget cut of R600m, which had a knock-on effect on its operations, and was spread across the province. The municipalities were asked to look at their projects, and to ensure that they looked at their communities and echoed why certain projects were changing or being postponed. The budget cut was out of the Department’s control, and for the financial year of 2020/21, its planned activities did not show an over-commitment in relation to the funds it has available. For the outer years of 2021, 2022 and 2023, it was a bit over-committed, but in those financial years it would be adjusted.

It was time that the public felt that the DHS was a department that cared about the people, and the budget should be reflective of that and the diverse racial groups it represented. It wanted to ensure that the correct beneficiaries benefited from the housing system -- the true recipients who need housing urgently.

He said it was a difficult budget to consider -- firstly, because of the budget cuts, and secondly, the late arrival of the gazetted budget. As he had indicated, the Department had engaged extensively with municipalities regarding their community involvements. It had allocated the budget according to its strategic priorities, which looked at projects the DHS was ready to implement. Additional criteria were given to municipalities to ensure that the targets set by the Department were achievable, as the national Department was strict on tracking the progress of projects. The Department had considered the projects’ readiness, its own strategic goals, and identified where the need was.

Discussion

Mr Van der Westhuizen commented that the Department’s Achilles’ heel was in terms of capacity building in local governments. The only way that those local governments could be assisted was by the DHS. Did it have a budget to assist in improving the capacities of local governments, without taking over their projects?

Mr Marran looked at the allocations to Langeberg and Beaufort-West, and commented that there were no allocations to Beaufort-West in some of the outer years. If one looked at the Knysa, George and Mossel Bay municipalities, it was clear that a big chunk of the budget was allocated to the Southern Cape when compared to other municipalities, which was worrying. The Committee had visited the Langeberg area a few weeks ago, and the concern there was that some projects had been stopped and there was uncertainty whether they would be continued. The current allocation of only R8m to Langeberg was worrying, and clarity regarding this was needed from the Department.

Mr D Smith (ANC) referred to the list of signed-off projects mentioned by the Minister that was sent to the National Department in February 2020, and requested that the list be provided to the Committee together with a breakdown of the pending projects that are currently awaiting approval or implementation.

Ms N Bakubaku-Vos (ANC) referred to the Minister’s mention of the engagements made with the municipalities, and that some projects could not be stopped because they were already in progress. The Department was requested to present the Committee with a breakdown of which projects could not be stopped, with details on the progress that had been made up to that point. The second question was regarding Murraysburg, where the last housing project was done in 1999, and where there were currently promises of houses being supplied, but no realisation of those promises. In the central Karoo, the delivery of the promised houses in Laingsburg had been postponed. A stipulation was required from the Department outlining the criteria used to decide which projects to postpone, and whether there was a possibility of fast tracking those projects that had been postponed.

Mr Lili referred to the meeting he had with the Minister relating to the project in Saldanha Bay and the allocation of the budget, and recalled that the Minister had said no funds were allocated in 2020. There were a lot of shacks on the plots where housing was planned, and already more than 800 people were living there. Since 2007, only a few Saldanha Bay project houses had been built. Could the Department classify it as a priority project in order to streamline this project?

Mr B Herron (GOOD) referred to the fact that the Minister of Finance had made quite a big deal about the four very important priorities (VIPs), with the fourth one being spatial transformation. The Minister of Finance had made specific reference to the R7.4bn allocated to the DHS with the intent of streamlining spatial transformation. This did not seem to have been incorporated in the budget presented to the Committee, which appeared to be ‘business as usual’. Could the Department give the Committee some indication on how it planned to land the fourth VIP, as it seemed unlikely to be achieved with the presented budget? Some assistance was needed to understand the transfers made to the municipalities, as there were various listed amounts. It started off with R1.32bn, and then there was a different chart listing R1.5bn, which involved estimates and payments for local districts. Did this include the Department’s spending in those areas, whereas the R1.32bn was the transfers to the various municipalities? Could the Department explain the different allocations, as there was only an amount of R 2bn to spend? He requested a progress report on the accreditation of projects to be submitted to the Committee.

Mr America enquired about the reallocation of the R92m of the previous years’ allocation towards the Conradie “Better Living Model.” Was it necessary for that reallocation, and from which area had it been transferred, if any?

Department’s response

The Minister addressed the question about the capacity of local governments, and expressed the Department’s concern regarding the planning and implementation phases particularly, which would be discussed in more detail by the CFO.

Regarding Mr Smith’s question, the HOD had been in Pretoria yesterday, and the Committee would get a list of the signed-off projects which had been approved by the national Department.

The Department had noted the concern over certain municipalities in the central Karoo which had no projects in the pipeline, such as the Prince Albert municipality. Regarding Beaufort-West and the central Karoo as a whole, there were no projects that had finished the planning stage and were ready for implementation. This was a concern, because the Department’s mandate was to service the entire Western Cape, and delegates from the Department were scheduled to meet with these municipalities for future engagements. Regarding the unfulfilled promises made in Murraysburg, the promises were not made by the Department and perhaps it was necessary to reach out to those parties which had made the promises that had not beenkept. The Department also requested the specific name of the Saldanha Bay project to which Mr Lili referred, as there were a basket of projects under way in that area, and it was unclear which one was referred to.

The Chairperson asked Mr Lili to refer the Department to the specific Saldanha Bay project mentioned.

Mr Lili could not recall the name of the specific Saldanha Bay project, but said it was a project that had started in 2007, where only a few houses were built, but over 800 people were still in need of housing.

Ms Samson addressed the issue of capacity building, and said it was influenced not only by the budget allocation to each municipality, as the Department was also operational in each municipality by providing assistance with the pre-planning and the pipeline packaging of projects. The regional implementation teams also assisted the various municipalities.

Regarding the allocations to municipalities, the Department emphasised the importance of project readiness, and noted that targets could not be set or expenditure made in cases where bulk services were constrained. Regarding the allocations to different regions, the Garden Route had the second highest allocation after the City of Cape Town, which was calculated on the basis of need. Projects that could not be stopped included where serviced sites had been provided, but where funding was not necessarily allocated for top structures. Looking at funding constraints and the basis of need, merely providing serviced sites, with or without top structures, was regarded as a service that was provided by the Department.

The Chairperson asked for clarity on the support given to the municipalities. Where they supported before or after projects were approved? If the municipalities were supported from the outset, the Department would not be facing the problem of municipalities that had not had housing projects for decades, as problems could be picked up earlier by the Department.

Ms Samson responded to the question by using the Beaufort-West project as an example of how support was given to the municipalities. Central Karoo had been assisted in the past where the need had grown more slowly than any other district. Assistance was given at the pre-planning stage when a project was in the pipeline to be completed within the next ten years. Funding for bulk services were out of the control and scope of the Department’s mandate, although assistance in getting grants had been given to municipalities in the past. Assistance in the assessment of land availability and other technical aspects was given to these municipalities to determine which projects should be prioritised and made ready for implementation.

Mr De Wet added to the Department’s response on the capacity building by referring the Committee to page 382 of the main budget, where a list of the Department’s direct interventions were listed. To improve their respective capacity buildings, the City of Cape Town had been allocated an amount of R 7.5m, and other municipalities were also allocated funding. Two municipalities were not included -- Knysa and Oudtshoorn -- where the Department funded the salaries of their Heads of Housing to assist those municipalities. This added another R 2.7m of funding set aside for the improvement of municipalities’ capacity building. The Department also assisted when municipalities struggled with the implementation of projects, and then completes the projects together with those municipalities, instead of taking the projects over.

Regarding the orders and transfers mentioned by Mr Herron, the figures were inclusive and did not add up to R 2bn, as the same funding was reflected in more than one instance. In the Conradie Better Living Model, the Department had committed to dedicating R 118m to that project two years ago. The funding had been raised by selling land to Asla Construction, and by raising revenue. The money had now been allocated to that project by the National Department.

On Langeberg, while there was a decrease in the allocation to that municipality, there were other municipalities within that area that needed to be assisted, such as Boekenhoutskloof, Mandela Square and Robertson Heights.

Ms Phila Mayisela, Chief Director: Implementation (CDI), continued by referring to the Beaufort-West municipality, and said that in the 2018/19 financial year, the Department had accelerated its work in that area by building more houses than originally planned for. Their pipeline had dried up, as there were fewer housing projects that were ready for implementation at the moment.

On the issue of the Murraysburg project, there was currently assistance given to the municipality to build over 300 units, and it was currently in the planning stage. The Department would continue to follow up with that particular municipality.

Regarding the serviced sites projects in Saldanha Bay, the Department again requested the name of the particular project in order to prioritise it, as providing houses in rural areas was a priority for the Department.

On the issue of accreditation, there were currently five municipalities awaiting level two accreditation -- Stellenbosch, Drakenstein, Mossel Bay, George and Saldanha Bay. They were currently being assisted in going through the process to obtain such accreditation. The first step was ensuring that these municipalities had updated HS plans, but because some municipalities had outdated plans, the Department had provided technical assistance in this regard. Other municipalities were being assisted with obtaining level one accreditation, and the Department believed that all these other municipalities were operating at a level one accreditation.

The Minister reminded the CDI to address the question on spatial transformation.

The CDI said that on the issue of spatial transformation, the Department had projects in the pipeline that would address this issue, such as the projects ongoing in Hout Bay. Parcels within the inner city were also being identified to be used to build affordable housing. The Department was working together with the Department of Public Works (DPW) to address this issue.

The Minister asked the HOD to expand on the issue of spatial transformation, as it had been made a key priority by the national Department, and to give the Committee a comprehensive overview of the Department’s efforts to ensure its implementation.

Ms Samson explained that implementing spatial transformation was twofold. Firstly, it involved identifying the location to ensure that it had equitable and affordable access to employment and transport opportunities. Secondly, it was important to consider how to improve the functionality of the settlement with regard to service delivery. There were provincial Priority Housing Development Areas (PHDAs) that had been identified, and the Department had set targets for those areas which were included in its Annual Performance Plan. Investments from different operational departments were needed to ensure that spatial transformation occurred. All of the projects should be within a geographical area where there could be investment from different sectoral departments. The PHDAs would also look at the infrastructure available, and whether it would follow the joint-district approach or the area-based approach, to ensure that the other facilities required to create a human settlement were available in that geographical area.

The Minister mentioned that in the 2020/21 financial year cycle, the Committee would notice that the Department had budgeted for 321 serviced sites to be built and maintained at a cost of R16.05m.

Further discussion

Mr Marran highlighted the Langeberg issue again, and mentioned that it had had a 53% budget cut, which was the highest of all of the municipalities. The Department’s response had mentioned that it was due to other towns and municipalities needing the funding more than Langeberg did. The 53% cut did not make sense. The response regarding the Southern Cape was that the projects that were ready for implementation were being given priority. Could the Committee get a list of all the projects that were ready for implementation? The Department had stated that according to census data, the highest need was in the area of the Garden Route. Should priority not be given to the waiting lists of municipalities, which would indicate whether there was a low or a high need from that municipal area? To come back to the Transhex project, where the Department had shifted the blame to Eskom, the main appropriation had been R183m, but now it was R87m. The net allocation according to the national budget was R6m. Did this mean that the province would pay the remaining R81m? It was almost R 100m less than what had been budgeted the year before, indicating a massive budget cut.

Mr Smith again requested that the list be provided to the Committee, together with a breakdown of the pending projects that were currently awaiting approval or implementation.

Ms Bakubaku-Vos repeated the request that a stipulation be submitted from the Department outlining the criteria used to decide which projects would be postponed, and an indication given to the Committee on whether there was a possibility of fast tracking those projects that were postponed. The unfulfilled promises that were made in Murraysburg were on Facebook and other social media platforms, and this issue also needed a clearer and action-driven answer from the Department.

The Chairperson mentioned the issue of the Langeberg, to remind the Department to give clarity on the support given to the municipalities. Were projects supported before or after they were approved? Every year, funding was provided for a project in the same area, and when they were engaged with on the delay, the response was that there was no space in other towns for the project to be implemented. That was the problem faced by the municipality -- saying that they were not ready for implementation as they did not have the requisite land parcel yet. This was a problem, because there were other towns that had needs and had private partnerships that were ready for implementation. A link was needed between the Department and the spatial planning areas, as emphasised by the Department of Environmental Affairs and the municipalities.

The Minister said that the Committee would be provided with a breakdown of the pipeline of implementation-ready projects that were pending,in accordance with the matrix requirements of the national Department. Instead of the Department explaining how the matrix works, the CDI would prepare an explanatory document on how it works.

Regarding the unfulfilled promises made to people in Murraysburg, the Department noted the dangers of social media platforms for such purposes, and added context to the visit to the area. Houses had been built during the previous decades, and very old structures were presented. When the Minister had visited the site that was in the pre-planning phase, the concern immediately was that there had been a drought in Beaufort West, and that the bulk of Murraysburg’s infrastructure had not been updated in over 40 years. Could the bulk infrastructure maintain and support the upgrades and new houses that were scheduled to be built by the Department? At a meeting with the mayor of Murraysburg, the Department had advised them to rather invest in upgrading the bulk infrastructure of the town.

One concern of the community and the municipality was that when funding had been allocated to the Beaufort-West municipality in the past, it had not been used for the purposes intended. An example of this was the Department’s spending of R 909m to upgrade the toilets in the municipal area, but only 15 toilets had actually been serviced. Where did the rest of the money go to? The Minister assured the community that they would ensure adequate and efficient budget expenditure, but denied making promises to the community members. The Department was there to fulfil the real needs of the people, and had to deliver a real mandate regardless of a potential beneficiary’s political association.

Ms Samson responded on the question regarding spatial transformation, and said that the Provincial Spatial Development Framework had been tabled to support the proposals in the Provincial Spatial Development Framework (PSDF), where a growth potential study of towns had been done. This study showed the potential growth of various municipalities, which was then used to determine where capital should be spent to develop those communities. What it failed to indicate was how the Department should address the social need of housing. In the town of Suurbraak, there was a social need but there was no growth potential. The Department had to respond to the social needs as well, as it was its mandate to provide housing and improve the living conditions of the citizens. Often there was a disparity between where the growth potential was and where the social need was, and that was often the difference between whether there should be enhanced spatial transformation or not. While the central Karoo had the lowest growth potential, the social needs were still addressed.

Mr De Wet addressed the issue regarding the Transhex project, saying that the Department had planned to do 1 097 units there last year, but due to the shortage of materials the houses could not be built, because they could not be connected. The whole project had been restructured, and that explained its budget being cut from R 183m to R 87m during this financial year.

On the Langeberg project, the 53% budget cut was due to the Department not being able to have projects in its business plan that were not ready for implementation. Planning was very important to avoid the Department’s need to shift funding from one project to another to avoid losing the money when it was not spent as planned. Implementation had to occur as planned. It did not help to allocate money to a project that was not ready for implementation.

The Chairperson asked that if there was a question regarding the readiness of the municipalities, and the Committee was there to hold the Department accountable, to what extent could the Department get involved in helping the municipalities to be ready with the drivers to ensure a project was ready? Was there a way the Department could identify the smaller municipalities where intervention was needed to ensure implementation?

Mr De Wet replied that it was not the municipality that was not ready, it was the particular project. The project could have outstanding documentation, such as licences. Once the project was ready for implementation, the Department would assist the municipality.

The Minister stressed the need to exercise foresight, as part of the rule of law. The DHS and local governments needed to be joined at the hip in addressing the social need for housing. The Department would be visiting each district, with the meetings scheduled to visit one district each month. There was engagement with the municipalities, and assistance was given to them to address their issues to ensure efficiency within the pipeline. The Minister invited the Committee to join the Department during these meetings.

The Chairperson thanked the Department for the response, and acknowledged the strides the Department was making in providing housing to those who needed it. However, the Committee had noticed a loophole regarding the issue of the municipalities whose business plans did not address the demands in their towns. Permanent serviced sites or informal settlements had to be established where there were major demands. Flexibility in the legislation must happen to accommodate the beneficiaries of the housing projects.

Mr Marran referred to the Transhex project, and mentioned that almost 100% of the allocation would be spent on that particular project. When they spoke about being implementation ready, with 1 000 sites being ready for implementation, it seemed that the Department did not have the appetite to build or to continue with that particular project. What was happening now was that people from other towns who wanted a house would have to move to Transhex, which was more than 40 km away from their home towns.

Ms Samson said that technical criteria were used to determine where the budget was allocated. When a serviced site was created, the Department regarded it as an opportunity. When providing basic services in De Doorns, the Department had to look at the basic budget that was available and within those constraints it had to be determined where the biggest impact would be made. Transhex was seen as an opportunity.

Mr Marran asked whether De Doorns had no growth potential, as the response from the Department differed by stating that Worcester had the biggest potential to grow. People residing in the areas surrounding De Doorns had a very high unemployment rate, and had to flock to other towns for work. Would the Minister go to those towns and explain to the community that there would not be houses built because the growth potential was more than 30 km away in the next town?

The Chairperson said that the Committee would have a meeting with the Department on the strategic planning, for the Members to better understand the decisions made in this regard.

Mr Lili said he was concerned with the HOD’s response, and asked whether she was aware of the situation on the ground, as experienced by many of the community members the Department had to serve. It seemed as if the focus of this administration was on the Committee’s oversight to deal with the challenge of serviced sites. There was only one company that made the Committee suspicious of the process, namely Asla Construction. During the Committee’s visits to Malmesbury and Beaufort-West, it was clear that the beneficiaries were not happy with the houses and structures provided, and the common denominator was Asla. The Department must consider the issue of serviced sites, and must prioritise the beneficiaries to allow them to choose the type of the house they want, instead of just building houses in areas where there were unidentified beneficiaries. There were sites that were already serviced, so the Department’s job there was only to allocate the houses to the beneficiaries who had waited long to have a house. Asla was building houses when it was unclear whether the beneficiaries would even be satisfied with the intended result. It seemed as if the province was prioritising Asla projects, and had forgotten about the majority who had been certified already.

The Chairperson reminded the Committee that the national Policy was in place, and that the Department used those guidelines to make its decisions. Some of the concerns raised constituted a legislative issue which had to be changed by the legislators, and could not be addressed by the Department.

The Minister said that a lot of the policies the Department relied on were national policies, some of which may be outdated. The Department had engaged the Deputy Minister of Human Settlements, as many of the policies did not address the issues on the ground. One such issue was when the Department reported to the national Minister, and gets measured on its number of serviced sites. However, the culture of the government must not be to do everything for the community. At some point, the community would have to take ownership and realise that the government could only do so much to assist them. There was a real disjuncture between the policies and the situation on the ground. The Department must be challenged to think outside of the box to assist the ‘missing the gap’ market, even within the constraints of the national policy. The Department would announce partnerships with municipalities to engage them on ways to think outside of the box to implement projects that would speak to the real needs on the ground.

The Chairperson said that a meeting would be scheduled with the Department to discuss the partnerships mentioned. Engagement was needed with their colleagues in the national Department to address the amount beneficiaries qualify for, to get more flexibility to accommodate such persons.

Ms Mayisela responded to the concern over the Department’s assistance to those beneficiaries who owned service sites. Across the province, there was a programme that allowed for input from beneficiaries on the type of structures that would be built. On the issue of using Asla as a contractor, those were the contractual agreements between the municipalities and the implementing agencies who tendered for those contracts. Those contracts bound the municipalities to use Asla, as a result of public tenders. This was why Asla dominated in the municipalities. It had been brought to their attention that the contracts they had needed to be reconsidered and those appointments had to be made on the basis of a project, rather than a municipal area.

Mr Marran referred to the response about the 1 000 plots, and asked if he could go back and communicate to the community that based on the response received from the Department, there was no potential for economic growth. In the near future, there would be no houses build on those plots -- and see what happens. The municipalities were communicating different things to the people on the ground. It would be communicated that Worcester was the only town in that particular region with growth potential.

The Chairperson asked for the clarity on the response received from the Department regarding the 1 000 plots -- that there was allegedly no chance of economic growth.

The Minister responded that in December 2019, the President had signed over 28 PHDAs for human settlements, and this came in concurrence with the Department it was guaranteed funding if it developed those areas.

Ms Samson responded to Mr Marran’s comments on the De Doorns area. The Department had indicated that there was extensive funding for this area, and other upgrades had been made to ensure safer access to the community of De Doorns across the N1. However, the main concern that remained was the budget and how it was allocated across all of the municipal areas in the Western Cape. There were other people in need, such as backyarders and people living in overcrowded places, or even on farms. When the Department provides minimum services, it feels that some of the needs have been addressed. The community in De Doorns had access to basic services. One of the informers on whether to invest in projects or not was that of growth potential, but it was not the only criterion the Department uses to select projects and allocate funding. Transhex was used to integrate different communities and incorporate sustainable development, as it was along major routes and provincial main roads, and had other economic opportunities. Growth potential was not the only criterion that was looked at when the Department selected a project or allocated funding to certain projects.

Mr Marran said that Asla had been appointed as the implementing agent in 2004. The bridge that the HOD referred to had been built to connect that particular area with the rest of the town. Why did the Department not want to continue building in the area when it had already invested in the pedestrian bridge in Stofland?

The Chairperson asked the Department to outline a map of the different municipalities, and the amount spent or allocated to each of them by the Western Cape government.

Mr Smith noted that the history of Asla was to go to plots and build the required number of units at their own cost. During the outer years, Asla directly invoiced the municipalities. The Department funded a certain portion for a certain financial year. Was this the standard practice and the reason why municipalities tended to continue to rely on Asla?

Mr De Wet replied that it might have been the way things were done five or six years ago, but then Asla had run out of capital as they had operated without project approval. It does not operate on risk any more, and it was not present on any site without proper approval and a resolution taken. The implementing agent agreement had been structured in a way to allow Asla to go out on risk and build to get the prevailing subsidies when the project got approved. The Department had closed that gap, because a third party should not be able to dictate to the government on where to build.

Mr Lili reiterated the question from Mr Smith regarding Beaufort-West, where it had been allocated 200 units, which meant that Asla had gone out on its own to increase it to 800 units. The municipality had benefited a lot, but how had Asla managed to act outside of its mandate in this regard?

Ms Mayisela brought it to the Committee’s attention that where there were projects that were ready for implementation and linked to a particular need in that community, from time to time the Department took the opportunity to accelerate that project as opposed to doing it over several years, as was the case in Beaufort West. Asla did not go on risk there, as a decision had been taken internally by the Department to accelerate the process and finish the project over a period of two years instead of five years. Processes were done internally, and only when approval was granted, did Asla go ahead with implementation. The way in which the implementation agencies were structured was that the municipalities went out on tender and appointed an implementation agency to build a certain number of units. Contractually, Asla had to remain in that municipality until the specified number of units had been built, even if it took years. This fell foul of the supply chain contract regulations, which require that if there is a contract that exceeds three years, the residents must be informed of the contractual and financial engagements as a concern. Theewaterskloof had heeded the Department’s warnings and assigned implementing agents for individual projects and not for a certain number of units.

The Chairperson raised the issue of the backlog of title deeds. When was the backlog going to be eradicated, and what could be done to assist the municipalities with the backlog?

The Minister conceded that the backlog of title deeds was a concern, and that a large amount of money had been invested in these projects, with the return being very low. This was the final year that the Department would receive specific funding, according to its targets. As a provincial department, the Department was looking at options on how reducing the backlog of delivering title deeds could be accelerated, even exploring ideas such as digital title deeds. A major problem with the delivery of title deeds was that by the time the title deed was finalised by the municipality, the housing unit was no longer occupied by the original beneficiary. It was often resold or rented out or abandoned by the original beneficiary. This was a serious hindrance to the Department’s ability to conclude its processes on the delivery of title deeds.

Ms Samson said that the Department had assessed the reasons for the backlog in the delivery of title deeds pre-2010, and had established that certain planning legislative actions had not been finalised, making it hard to transfer property to an individual. Conveyancing had also been a problem, and funding to ensure the transfer of a property was mainly to be managed by the municipalities, which were now assisted by an internal team from the Department. The Department was working on a retention policy, which involved holding back a certain portion of the subsidies to ensure that municipalities had an incentive to ensure that properties got transferred. There was an internal designated team at the Department looking at the processes to provide additional resources to the municipalities, provided for by the Department’s own budget.

The Chairperson asked what the current number of title deeds that had not yet been finalised was.

The HOD answered that from 2014 to 2019, the number of title deeds not yet finalised was 43 000. The specific figures could be provided to the Committee.

The CFO stated that the backlog amounts to up to 2014 had been 37 000.

The Chairperson commented that seeing there was a problem regarding the backlog of title deeds, was there a feasible way in which the Department could implement a policy where it did not take more than three months after the finishing of a housing unit for the beneficiary to receive the title deed?

The HOD said that the way the process was designed was that a general design plan must first be submitted for approval. That plan was then approved, to which was allocated the erf numbers, as well as an erf diagram and a title deed. The conveyancing could then be done to effect the transfer, but when there was no erf number assigned, together with the diminished capacity of the Deeds Registry Office and the legislative requirements, conveyancing often took a long time.

The Chairperson said that if there was a shortfall of conveyancing, together with the current backlog of title deeds, there would forever be the problem of people that were selling those houses and making it even harder for the Department to decrease the current backlog.

Mr De Wet said that one of the challenges the Department faced -- for instance, in Grabouw -- was that much of the land was in the hands of the Department of Public Works. There was an arrangement where some of the land was transferred, but there was a delay as it had to go through the entire town planning process. Another issue was that to transfer a property, a clearance certificate was needed and certain municipalities did not want to write off the debts of the indigent people, even though the municipalities had benefited from the indigent allowances and subsidies.

The CDI echoed the comments of the CFO, and sought to bring comfort to the Committee by informing them that the Department was looking at having an internally designated team to look specifically at title deeds and to form partnerships with municipalities to ensure that the backlog did not grow.

Mr Smith asked whether the Committee was allowed to make submissions to the Department to adjust the allocations budgeted for, particularly for those allocations that should be elevated.

The Minister said that the Committee had an oversight role, and if the MPs could assist the Department in that role, engagements could be arranged.

Mr De Wet said that business plans were approved by the national Department, so when the Committee made recommendations they had to go through the formal process. Recommendations that were made now would come into effect only in September 2020.

The Minister thanked the Committee for their work and their oversight over the Department and allowing the extended time for the Department to make presentations to the Committee, to provide them with a comprehensive overview and to address all the concerns and questions of the Members.

Mr Herron, on behalf of the Committee, thanked the Department for engaging with the Committee so robustly, and for their presentations.

The Chairperson thanked the Department for the presentations, and said the remaining items on the agenda were for the Committee to vote on whether to adopt the draft Committee Report on Vote 8, and to adopt the draft Committee Minutes for its previous meeting on 12 February 2020.

Adoption of Draft Committee Report on Vote 8:

The Chairperson asked the Committee to vote on whether to adopt or reject the draft Committee Report on the Vote 8, as outlined in the Schedule of the Bill.

Firstly, having deliberated on the subject matter of Vote 8, Human Settlements, in the Schedule of the Additional Appropriation Adjustment Bill referred to the Committee, the Chairperson announced that the Committee was in support of the Vote.

Secondly, having deliberated on the subject matter of Vote 8, Human Settlements, in the Western Cape Appropriation Bill referred to the Committee, the Chairperson announced that the Committee was in support of the Vote.

Mr Herron abstained from voting in this regard, with the concern that his question on VIP four had not been adequately answered regarding spatial transformation.

Mr Marran said that support for the vote would be given, provided that the information requested from the Department was provided and the responses from the officials were recorded.

The Chairperson said that the draft Committee Report on Vote 8 had been adopted by the Committee, and reiterated the list of documents that had been requested from the Department.

Adoption of Draft Committee Minutes for 12 February

The Chairperson said that the last item on the agenda was for the Committee to adopt the draft Committee Minutes, but raised the issue of whether it would like to have a translator at every meeting and whether there was a need for it, given that the Committee should not be wasteful in its expenditure.

Mr Lili stated that it was always good to have translators, because at times people tended to speak a language that not everyone present at the meeting understood, so translators should be present at every meeting of the Committee.

Mr Marran seconded the view raised by Mr Lili, and emphasised the need for translators.

Mr America highlighted the cost containment duty of the Committee, and proposed that translators do not need to be present unless requested by the Committee beforehand.

The Chairperson mentioned that having translators was one of the standard conditions that became compulsory and had to be implemented if a Member expressed the need to have translators present.

Mr Van der Westhuizen commented that the equipment and the environment was not conducive for effective translating facilities, and the relevant venue facilities would have to be updated and maintained.

Mr Marran argued that the equipment was one part of the process, but the question was whether there should be translators at all times, or not at all.

The Chairperson concluded the discussion on the need for a translator by stating that the administration would be informed that the Committee required fully equipped translators at its meetings. Every committee meeting room should also be adequately equipped to ensure that the translating services could be used easily and efficiently by the Committee and the public.

The Chairperson, upon the vote of the Committee, then stated that the draft Committee minutes had been adopted.

The meeting was adjourned.

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