Department of Human Settlements on Temporary Residential Areas: follow-up meeting with Minister

Human Settlements, Water and Sanitation

06 October 2020
Chairperson: Ms R Semenya (ANC)
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Meeting Summary

Video: Portfolio Committee on Human Settlements, Water and Sanitation (NA) 6 Oct 2020

27 Aug 2020

Covid19 intervention by Department of Human Settlements

The Committee was briefed in a virtual meeting by the Department of Human Settlements, Water and Sanitation on the establishment of temporary residential areas and construction of temporary residential units in informal settlements, as well as the preliminary findings of the Auditor-General’s special audit.

The Committee asked the Department about the subsidy quantum of R64 000 per temporary residential unit (TRU). Members felt that the amount was absurd and did not reflect the value of the Temporary Housing Units. They heard that the Department had come up with the amount after a careful consideration of its housing norms and standards. Some of the norms and standards were not met in Talana and Linda Mkhondo due to poor craftsmanship, hence an imbalance between the amount spent on the units and the value of the units built.

On consequence management, Members asked whether officials from the Housing Development Agency had been punished. They heard that the DG was not responsible for taking consequence management on these officials but the implementing officials from the provincial governments and municipalities.

On the preliminary findings of the AGs special audit, the Committee asked delegates to explain the control weaknesses within the Department. The Committee heard that there were, indeed, control weaknesses. The Department also indicated that four provincial departments had received qualified audits in two consecutive years and the Department was in a dilemma of how to improve control weaknesses in these departments without withholding the disbursement of funds.

Meeting report

Opening Remarks by the Chairperson

The Chairperson opened the virtual meeting, welcoming Members, Department officials and Committee support staff. She introduced the agenda and handed over to the Department for the presentation.

Briefing by the Department of Human Settlements, Water and Sanitation

Mr Joseph Leshabane, Deputy Director-General (DDG): Project and Programme Management Unit, DHSWS, took the Committee through a presentation on the establishment of temporary residential areas and construction of temporary residential units in South Africa.

He first touched on the procurement processes that were followed by the Housing Development Agency, the Free State Province and the Nelson Mandela Bay municipality. He moved to show the Committee a table of projects in the different provinces and/or municipalities, their need and desirability, programme and development plan, names of the responsible contractors and directors and, the unit costs, applicable variations, project cost and progress.

Mr Leshabane touched based the Committee on the preliminary finding from the Auditor General’s Special Audit. The audit had unveiled non-compliance with emergency procurement regulations; poor quality, incorrect pricing and incorrect allocations of Temporary Housing Units (TRUs). The work that had been performed by implementing agents, including the HDA, had heightened the emerging risks.

See presentation document for more details


Mr X Ngwezi (IFP) applauded the Department’s decision to conduct investigations. However, the Department had to know that its action plan subsequent to the investigation was of value. Investigations without a subsequent action plan were fruitless and a waste of time and resources. Has the Department recovered some of the money that had been lost to corruption? Persistent corruption in South Africa had a regressive effect on the economy and undermined government’s work in all areas.  

Ms R Mohlala (EFF) criticised the Department for failing to enforce procurement standards despite the availability of three male Directors-General (DGs). The fact that all three DGs were men left a lot to be desired within the Department’s gender transformation policy. As had been stated by Mr Ngwezi, it did not take a trained eye to notice that there was corruption with the TRUs. The subsidy quantum of R64 000 per ‘shack’ was ridiculous. Who had approved the quantum?

At the beginning of the COVID-19 intervention, Minister Sisulu had shown excitement for collaborating with civil society organisations that looked at re-blocking rather than de-densification as an important concept in the human settlement discourse. What was the current status of the partnership with the civil society organisations? Has the Department revisited the de-densification programme or it had switched to re-blocking for public relations purposes?

It goes without saying that government had used civil society organisations to conceal its failure and incapacity to provide housing during a crisis. There was a chance that the collaboration would disappear along with the pandemic. What was the impact of the de-densification programme on households? Who was going to remain behind at the original settlements? Have the temporary relocation areas been designed and implemented to become permanent residential areas for households moved?

She pointed out that the Department had to update the Committee on the construction of the TRUs that sought to ease congestion and the spread of COVID 19 at the Mamelodi hostels, but it had already missed the June deadline.

When was the government going to provide land parcels for the erection of houses? Clearly corruption had taken over the government policy to provide housing.

The Minister had to explain what went wrong with the quality assessment of temporary residential units if this had been the responsibility of the Housing Development Agency (HDA) from the onset. It made no sense that the HDA had started to notice shoddy workmanship on completion of the programme.

The 500 shelters built at Zilahle and Linda Mkhondo, at the cost of R22 000, each demonstrated poor financial decision making and planning within the Department. There was no excuse for squandering public funds during a crisis.

Minister Sisulu had instructed the DDG of projects to conduct an investigation on all controversial TRUs. How far has the investigation gone and was it an internal investigation or external investigation that required the services of investigating agencies?

Ms E Powell (DA) recounted that the Auditor-General (AG) had pointed out the fact that the Department had not altered its monitoring and evaluation processes in response to the emergency nature of the project. There had been control weaknesses with regards to information technology and the application controls. The system designed for the allocation of beneficiaries continued to be used without any consideration to enhance control efficiencies so as to prevent the spending of money on undeserving beneficiaries. There had been limited progress to demonstrate the effectiveness of the command centre. The expected urgency for programme delivery was likely to create additional opportunities for corruption in the procurement of land parcels. There had been extensive indicators for non-compliance with the emergency procurement regulations. There was evidence of poor quality, incorrect pricing and incorrect allocation of temporary residential units. Why had oversight been delayed? What had the Command Centre been doing? What consequence management had the Department taken on municipal and provincial officials responsible for non-compliance?

She asked the Department to provide further details on how it planned to conduct a review of its procurement regulations. Has the Department planned to monitor the pricing protocols of provincial governments?

She asked the DG to explain to the Committee the cost of each TRU and how much the metros and provincial governments were allowed to spend on civil works. The metros could have deliberately inflated TRUs prices using unrelated engineering project costs.

The DG had to explain the discrepancies in the presentations that had been submitted to the Committee on 27 August and on 04 September, specifically with regard to the procurement costs for personal protective equipment (PPE). The presentation that had been submitted to the Committee on 27 August showed that as of 07 August, the Department had spent R2.8 million on PPE. The presentation that had been submitted on 04 September registered the cost at R3.1 million. It was highly likely the Department had deliberately omitted information in the first presentation.

The Department had spent 25% of its PPE budget on Travel with Flair, an events management company. She asked the Department to explain how visiting informal settlements constituted events and why an events management was its supplier for PPE.

The Minister had to tell the Committee when the Department was going to appoint permanent DGs.

Mr A Tseki (ANC) appreciated the fact that the DDG had explained in his presentation that there was mismanagement with the TRUs and the Department had already started the consequence management processes. However, the Department had no results to show for the process, which left the Committee confused. Be that as it may, it was commendable that the Department had already started implementing consequence management pending the preliminary findings of the AG’s special audit. This demonstrated proactiveness within the Department and limited dependency on the AG.

Ms N Sihlwayi (ANC) appreciated the fact that the presentation had enlightened the Committee on issues that had been previously identified as problematic in the last presentation.

She cautioned Members not to confuse the temporary housing unit project and the permanent housing unit project. These were based on different ideologies - the temporary housing unit project was a disaster management project whereas the permanent housing unit project was a transformation project meant to redress 130 years of racial injustice. It was absurd for one to expect 130 years of colonial and racial injustice to be redressed in six months. Therefore, the Department had to exercise caution when taking consequence management as it had to be sure on what project was it punishing officials for.

She applauded the AGs involvement in the TRUs project. It was important for the AG to get involved in the policy formulation process and not just submit findings

She asked the Department to provide a comparative cost analysis of the Temporary Housing Unit Project and the already existing permanent housing unit project. The analysis had to take consideration of the material and durability of the different housing units. The durability of the temporary housing units had to be commensurate with the R64 000 costing price.

Finally, Ms Sihlwayi praised the new housing units in Mdantsane, Eastern Cape. However, she expressed concern that the persistent chaos around beneficiary lists was going to affect the distribution of the housing units. The Department had to explain the criteria that it used to identify and select housing beneficiaries.

Ms C Seoposengwe (ANC) requested the Committee to appreciate the establishment of the AGs office and other Chapter nine institutions. These served as watchdogs of the principles of good governance. The AG and the Committee’s role of oversight had to motivate the Department to exercise due diligence with policy implementation. The Department also had to formulate strategies to mitigate non-compliance with the principles of good governance. The Department had to explain what it had done to punish those responsible for the shoddy workmanship with the housing units.

Ms S Mokgotho (EFF) drew attention to the fact that the AG had reported that the municipalities and the metros had not complied with certain provisions of the Public Finance Management Act. Also, the municipalities and the metros had not followed the prescribed norms and standards. She asked the Department to explain whether it had a monitoring, control and evaluation mechanism for all the processes that municipalities and metros had to follow. If so, how did it overlook the mentioned irregularities in the municipalities and metros? This goes without saying, the municipalities and metros had a duty exercise due to diligence in the exercise of its duties. The Department had to explain whether it had taken consequence management on all officials in the municipalities and metros that were flagged for non-compliance.

Ms N Tafeni (EFF) asked whether the Department had subsequent plans to move households from temporary housing units to permanent housing units. History showed that the Department placed people in temporary housing units without any subsequent plans to move them to permanent housing units. It was concerning that the Department had wasted R64 000 on “permanent shack housing”.

South Africa faced a crisis with COVID-19 and it was shocking that during such a crisis there were people without water. The Department had unfinished borehole projects and had to explain its action plan regarding these projects.

The Chairperson reiterated on the fact that the Department had to formulate a comprehensive action plan to address the AG’s findings. The action plan had focus on regulatory improvement. Also, consequence management had to be applied in order to guarantee clean audit findings in future.

The presentation had confirmed the Committee’s views in the last meeting that the temporary housing units in Talana and Mamelodi did not meet the prescribed reasonable standards. The Department had to ensure that contractors remedy the poor craftsmanship.

The provincial governments responsible for the settlements flagged for non-compliance had to account to the Committee. Accountability would expose loopholes in the area of policy and/or project monitoring and evaluation. The Committee and the Department could also formulate strategies on how to improve inter-governmental coordination and collaboration.


On the Department’s omission to brief the Committee on its recovery plan pending the outcomes of its investigation, Ms Lindiwe Sisulu, the Minister of Human Settlements, Water and Sanitation, responded that the Department had to follow all the necessary procedures in response to the AG’s findings. First, it had to conduct investigations to determine the amount of money that had been lost and the procurement procedures not followed. Subsequent to that, the Department would then formulate a recovery plan.

Mr Leshabane added that the Department had not yet uncovered evidence of corruption or mismanagement of public funds. The AG had only pointed out risks. For that reason, the Department had not yet formulated a recovery plan.

On the criteria used to determine the value of each “shack”, Mr Mbulelo Tshangana, the DG, DHS, replied that the criteria encompassed a consideration of geo-tech variants. Geo-tech variants had permitted the Department to add an additional 15% to the actual value of the property. The resultant value of each housing unit was R64 441. He emphasised that the process was regulated. Below is an itemized breakdown of the unit price:

- Assistance to compile project applications

- Land acquisition

- Settlement planning

- Basic municipal engineering services design

- Basic municipal engineering services

- Land surveying

- Temporary shelter or supply of materials for the construction thereof

- Relocation assistance

Ms Nonhlanhla Buthelezi, Chief Director: Operational Policy Frameworks, DHSWS, informed the Committee of the different unit costs including below:

- The price for a brick and mortar house (40 square metres) was R116 000,

- The price for special units for disabled people (45 square metres) was R172 000,

- The price for special units for military veterans was R199 000. This amount was in part funded by the Ministry of Defense.

Ms Powell appreciated the above information but requested the Department to submit the actual documents.

On whether engineering services were included in the R64 000, Mr Tshangana agreed that the services were included. The Department was going to review the price. However, it had to be cautious not to affect the quality of the units.

Mr Tshangana cautioned against price fixing as this affected the quality of the product. The Department had housing norms and standards that it had to adhere to. However, the Department had fixed the price to R64 000 because service providers had charged exorbitant fees under the impression that the Department had an unlimited budget.

On consequence management, Mr Tshangana said he had written to all government structures that had been flagged for non-compliance with procurement processes to implement this.

On ensuring that contractors rectify all building errors, Mr Tshangana assured the Committee that he had written to the contracting partners to commit themselves to the cause.

Ms Powell asked what consequence management the DG had taken on HDA officials responsible for Talana.

Mr Tshangana replied that it was not his job to take consequence management on officials that did not directly report to him. His job was to ensure those responsible for the officials took consequence management.

On the housing units in Talana, Mr Tshangana said the NHBRC had conducted a quality assessment of the units in Talana and the outcomes were contained in the report. The NHBRC was going to do a quality assessment in other settlement areas including Linda Mkhondo, and the Department would present the outcomes in its next meeting with the Committee.

On collaboration and coordination, Mr Tshangana said the Human Settlement Coordinating Command Centre had not been very effective in this area. Be that as it may, the Department had some success stories. During the 2010 World Cup, it had successfully coordinated all the three spheres of governance. The setbacks that the Department had experienced with the temporary residential units had to do with poor strategic planning and the Command Centre had started to meet regularly in order to improve collaboration.

Mr Leshabane added that the Command Centre sought to coordinate and monitor the activities of all the stakeholders involved. The AG had rightfully pointed out there were weakness. Be that as it may, the Committee had to take notice that the Command Centre was not to be held accountable for the delays and failures. The Command Centre was not responsible for the project and did not give order to heads of departments and Members of Executive Councils. The Centre sought to monitor progress and had done extensive work in this area. For example, it installed cameras and dispatched teams on work sites to monitor progress in real time.

Ms Powell said that the media and not the officials dispatched to work sites had picked up anomalies with the TRUs.

Ms Mokgotho asked why the Department had not monitored the tender bidding process. Why did the officials dispatch to work sites delay reporting shoddy workmanship?

On the material used to construct the temporary housing units, Mr Tshangana said the material had been approved by the Constitutional Court since the units were temporary. The material could become problematic in cases of permanent housing units. On the durability of the temporary residential units, he said that these had a durability period of 10 years.

On the need for the Department to formulate an action plan to address the findings of the AG, Mr Tshangana agreed that this was important in order for the Department get a clean audit report in the next financial year. For this reason, it was treating the matter with great urgency.

On the deadline for the upgrading of the 29 informal settlements, Mr Tshangana said that the Department was going to share the project schedule with the Committee.

On the control weakness identified by the AG, Mr Tshangana confirmed this to be true and referenced some provincial audit outcomes of 2019. Four provincial departments had received qualified audit outcomes for two consecutive years and the Department was unsure how to ensure that control weakness were taken serious in these provinces. A withdrawal of funds from the provinces only meant the public would suffer from poor service delivery.

On gender transformation within the Department, Mr Tshangana said the majority of the DDGs in the Department were women. Of the three DGs Ms Mohlala had complained about, the DG for Water and Sanitation was in an acting position.

Ms Buthelezi said that she and Ms Bele had served as evidence that there was a gender balance within the Department.

Ms Mohlala remarked that she wanted to see women occupying key positions in the Department.

Minister Sisulu said there was a gender balance within the Department. The Department had two female DDGs that were performing exceptionally well and could potentially become DGs.

On evictions in the Eastern Cape, Mr Tshangana said that the Department did not condone land invasion as those responsible occupied land earmarked for other developments and/or reserved for already existing beneficiaries.

On the provision of land parcels, Mr Leshabane told the Committee that the Department had a project plan for this. The plan undergoing review and the Department was going to share the details in due course.

On re-blocking and de-densification, Ms Buthelezi replied that these were two different processes and explained the differences. Re-blocking sought to improve service passage and access in informal communities whereas de-densification sought to ease congestion.

Mr Leshabane indicated that the Department had agreed with the civil society groups that reblocking was not an imposed process but one that required cooperation with the community.

Minister Sisulu added that the Department had always been working with civil society organisations. In fact, she was a chairperson in one of the organisations. The organisations provided strategic planning and project support where necessary. The civil societies had advised the Department to adopt a policy of reblocking but after visiting Dunoon in Cape Town the Department figured dedensification was the appropriate policy.

On PPE procurement, Ms Lucy Bele, the Acting Chief Financial Officer, DHS, replied that the contract with Travel with Flair, an events management company, had been extended to cover the provision of PPE. She said Travel with Flair also provided PPE to dwellers at the end of all department events. Ms Powell had correctly pointed out that Department events covered settlement visits.

On the discrepancies in the procurement reports submitted by the Department on 27 August and 4 September, Ms Bele explained this had to do with an update error. The Department had procured additional services after 07 August and these were indicated in the report on 04 September. The Department had assigned a team to rectify the errors and was going to provide a written response.

Ms Powell disputed the procurement dates provided by Ms Bele. She alleged that the procurement shown in the report on the Department had submitted on 04 September had occurred in July and had been deliberately omitted from the presentation.

On the controversial beneficiary lists, Mr Tshangana said this was a problem in informal settlements. The Department had a National Upgrading Support Programme which it used to quantify shacks and register owners of units in those informal settlements. Through this process the Department was able to identify qualifiers and non-qualifiers.

On the boreholes, Mr Tshangana said that he will inform officials from the Department and they would respond in writing.

On unoccupied units in Mamelodi, Mr Leshabane responded that the units had been occupied but he was unsure about the exact date.

On permanently filling the position of the DG in the Department, Minister Sisulu replied that the Department had planned to advertise the position after the disciplinary processes of the outgoing DG had been completed. Vacancy advertisements depended on the complete easing of the COVID- 19 restrictions.

Ms Mohlala remarked that the Committee had complained about the Minister’s failure to attend meetings and had not explained her absence.

Mr M Mashego (ANC) said Ms Mohlala was incorrect to say the Committee had complained about the Minister’s failure to attend meeting. Only three individuals had complained.

Minister Sisulu replied that she only attended meetings on invitation by the Committee. She was not a member of the Committee and carried no obligation to attend meetings. On the other hand, she had been very busy due to COVID-19 and her attention had been on water delivery.

Ms Mohlala asked the Minister if she was aware of the evictions in Fleurhof. There were Ministers who had alleged sold RDP houses in Fleurhof. Has the Department initiated an investigation and how far is this investigation?

Minister Sisulu said that she was aware of the situation at Fleurhof as she had travelled there to attend to the matter. However, she was not aware of the allegations that there were government officials who had sold RDP houses. Be that as it may, the Department had initiated an investigation and this was ongoing.

The Chairperson excused the delegates and requested the Members to deliberate on the Committee programme for the new term.

The meeting was adjourned.


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