Department of Human Settlements on private partnerships with specific reference to farmer partnerships & bulk services

Human Settlements (WCPP)

28 July 2020
Chairperson: Ms M Maseko (DA)
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Meeting Summary

Video: STANDING COMMITTEE ON HUMAN SETTLEMENTS, 28 JULY, 08:00

The Committee was briefed by the Western Cape Provincial Department of Human Settlements on its housing public-private partnerships (PPPs) in the province.

The Committee was informed that partnerships had become the “buzzword,” and that much had been written about how government and the private sector should join hands to unlock further funding. The reality, however, had been that negotiating PPPs had proved to be a cumbersome process. At times it seemed that government's best interests were not being taken into account, so it was imperative to strike a balance between not so competing needs.

Members were also briefed on the Partnership Feasibility Criteria being used to select PPPs. One such project was the employer-assisted housing project in Langeberg, which involved a partnership between provincial and local government with several large-scale farm owners in the region. These farm owners had provided the land for this development, and some had also provided additional funding for top structures.

Members expressed their support for PPPs, but cautioned against their possible impact on the core business of the Department. They asked if there was a possibility of extending this type of programme to domestic workers, and also called on the Department to provide them with detailed information on the use of green technologies in these PPPs

Meeting report

Public-Private Partnerships (PPPs) in the Western Cape

Ms Jacqueline Samson, Head of the Western Cape Department of Human Settlements (DHS), and Mr Anwar Swartz (DHS), briefed the Committee on the province's PPPs.

They said that partnerships had become the “buzzword,” and that much had been written about how government and the private sector should join hands to unlock further funding. The reality, however, was that negotiating PPPs had proved to be a cumbersome process. At times it seemed that government's best interests were not being taken into account when it came to these PPPs. It was thus imperative to strike a balance between not so competing needs.

The Committee was also briefed on the criteria being used to select PPPs, which had been called the Partnership Feasibility Criteria.

One such project was the employer-assisted housing project in Langeberg. This partnership was between the provincial and local government, with several large scale farm owners in the region.

These large scale farm owners had provided the land for this development. Some had also provided additional funding for top structures.

Another example was the partnership with APL Cartons in Worcester. APL employed about 900 employees, and would like to construct houses for all of them.

Discussion
The Chairperson thanked the Department for the briefing, and said it would assist Members to become more familiar with PPPs.

Mr A van der Westhuizen (DA) said he was impressed by the Department's determination to make these PPPs feasible. There were many employers who wanted to ensure that their employees had adequate housing. He thus wanted to ascertain whether there had been precedents for the current round of PPPs, and what experience had been gained from them.

He also commended the informal settlements fire prevention plan, as fires in informal settlements had become a chronic problem. He suggested the DHS should also consider a study into the prevention of fires in backyard dwellings. He also wanted to ascertain whether the Department made allowances for small scale farmers/businessmen to also participate in PPPs.

Mr D America (DA) said that it would have been helpful to have copies of the presentation beforehand.  Nonetheless, he welcomed the initiatives by the Department. For new Members like himself, the briefing was vital and informative. He called on the Department to broaden the scope and include more participants.

Mr P Marran (ANC) pointed out that the presentation had been loaded on to MS Teams for Members' consideration. He agreed with his colleagues that more participants should be included. However, he hoped that these PPPs would not affect other housing projects.

He said TransHex had over 900 employees, and asked how many units would be constructed for its employees. He also wanted to know how many plots APL would be taking up, and whether anyone other than APL employees stood to benefit.

The Chairperson said that the presentation had been loaded over a week ago, and had subsequently been updated. It had been made available to Members.

She also wanted to establish from the Department whether the new structures would be built according to “green technology,” and would take into account issues such as water scarcity.

Department’s response

Ms Samson acknowledged Members' comments on backyard dwellings.

She said that individual farmers had come forward to participate in PPPs. These were not the only projects the Department had planned -- they were simply the only approved ones. There was room for more engagements and partnerships.

She thanked the Committee for the support expressed, as it sometimes seemed a thankless task.

The DHS had to be careful that existing mainstream housing projects were not affected by PPPs. That was why it conducted rigorous feasibility assessments.

The Department had embarked on several public awareness initiatives, and had called public meetings to inform the public about the options available to them, such as the Credit Readiness Programme (CRP).

She added that TransHex would be utilising green technology.

Mr Brian Denton, Director: Project Administration, Western Cape DHS, explained that in some cases, farmers made serviced plots available, or would only bequeath the land for development. Several farmers had expressed interest in participating, but the approval process proved to be time consuming. He added that since the budget cuts, some PPPs might be delayed, as funding had always been a challenge.

Mr Swartz added that APL had 165 employees, and at TransHex, the scoping exercise still had to be done. At the moment, 350 houses had been earmarked for construction during the first phase. It would be possible to determine how many structures in total would be constructed only once the scoping exercise had been concluded.

Ms Samson added that her Department stood ready to provide additional information on “green” procurement. It had been busy updating the province's norms and procedures in this regard.

Follow-up questions

Mr Van der Westhuizen wanted to know how PPPs could unlock further funding, given the current budget shortfalls. As he understood it, farmers stood surety for their employees. He wondered whether the same programme could not be extended to domestic workers.

Mr Marran expressed his support of these PPPs, especially since farm workers were being assisted to become home owners.

Department’s response

Ms Samson replied that packaging certain housing products could become cumbersome. This had been the reason why a strict screening process had been instituted.

She said the Department had been approached by individual employers who had enquired about housing options for their domestic workers. The challenge, however, had been that current policies did not cater for domestic workers. 

Mr Denton said he had had several conversations with contacts at financial institutions, who had informed him that banks had shown reluctance to grant new home loans as a result of the Covid-19 pandemic.

He also touched on the domestic worker question, saying that the national DHS had started a review process of related policies, as these were very specific. Various proposals had been made. He cited affordability as a constant problem.

Mr Swartz added that the costs varied from project to project, as each had its own specific requirements. It had always been easy to determine the cost associated with top structures, but it proved more difficult with the hidden costs related to bulk infrastructure.

The Chairperson thanked the Department for the thorough briefing on PPPs.

Resolutions

Two resolutions were adopted by the Committee:

  • The Department would share a report that detailed how many projects made use of green technology.
  • It should develop a toolkit for individual employers to determine whether they qualified for housing subsidies on behalf of their employees

Minutes

The minutes of the meetings on 15 and 27 July 2020 were adopted;

The meeting was adjourned.

Audio

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