The Standing Committee on Human Settlements deliberated on the Budget Vote for the new Western Cape Department of Infrastructure. It adopted a report supporting the budget, with the ANC opposing it.
The Department told the Committee that the budget for 2023/24 was R9 887 billion, an increase of R985 809 million from the previous year. In 2024/25, the budget would decrease to R 9 661 billion and in 2025/26, it would again go down to R9 524 billion. The declines were due to a decrease in the Provincial Roads Maintenance Grant (PRMG) allocation and decreases in Asset Financing Reserve funding
for Human Settlements and Roads.
The Department said the budget aimed to contribute to economic growth through job creation and to improve the quality of life of all citizens through improved availability of quality infrastructure.
Priority projects were linked to the Western Cape’s Energy Response Plan. The Department would provide support for the Independent Power Producers Programme, the Municipal Energy Resilience Strategy, the Transmission Infrastructure Upgrade Planning project and the Distribution Grid Network Assessment.
Minister’s Opening remarks
Mr Tertius Simmers, Provincial Minister of Infrastructure, said infrastructure investment plans were guided by the Western Cape Infrastructure Framework (WCIF).
The budget would focus on how the Department of Infrastructure (DI) could contribute to economic growth through job creation and ultimately improve the quality of life of all citizens through improved access to quality infrastructure.
Energy was one of the Department’s five function areas and priority projects would form part of the Western Cape’s Energy Response Plan. The Department would provide project preparation support for the Independent Power Producers (IPP) programme, the Municipal Energy Resilience (MER) initiative, the Transmission Infrastructure Upgrade Planning (TIUP), and the Distribution Grid Network Assessment (DGNA). It would work with all municipalities.
With the prolonged load shedding since September 2022, operational demands on mechanical and electrical systems, including generators, had increased substantially together with expenditure on diesel. The Public Works Department had installed backup generators of varying sizes and capabilities across provincially owned buildings. Since 2017, the Department has been installing Solar PV equipment in provincially owned buildings to supplement the electricity supply. Two new installations were completed in February and March 2023, with one being a covering area at the green building at the Karl Bremer site, and the other a ground-mounted installation for the Department of Agriculture at Elsenburg.
Feasibility assessments of various energy solutions to reduce the reliance on the national power grid, including PV panels and generators and battery storage, were an ongoing focus, but remaining consistent in the building economy was also crucial for the Department. The Department was a key contributor to the provincial Growth for Jobs strategy.
Key projects currently underway, included the R530 million Malmesbury Bypass; the refinery interchange; the upgrade of the road between Stanford and Gansbaai; and the Plattekloof N7 bypass upgrade. The new Saldanha IDZ access road would be completed within the next few days. The district municipality undertook the project through its agency function, capitalising on the inhouse resources. The Department sought to enhance its capabilities through its local government partners in the province.
Another component of the Department was social infrastructure. The human settlements programme would deliver over 9 000 housing opportunities and develop a pilot approach to solar geysers consistent with the Energy Infrastructure Plan for the Western Cape.
Western Cape Appropriation Bill: Budget Vote 10
Ms Jacqueline Gooch, Head of Department (HOD), Western Cape Department of Infrastructure, outlined some of the key projects and priority allocations.
She said the infrastructure budget of R9 887 billion in 2023/24 was an increase of R985 809 million from the 2022/23 Adjustment Budget. For 2024/25, the budget was R 9 661 billion and for 2025/26 it was R9 524 billion. The downward allocations related to a decrease in the Provincial Roads Maintenance Grant (PRMG) allocation, a decrease in Asset Financing Reserve (AFR) funding for Human Settlements from 2023/24 and a decrease in AFR funding for Roads in 2025/26.
Ms C Murray (DA) said it was great to see an increase in the budget allocation for the coming financial year. She referred to slide 3 of the presentation and asked whether the 116 beds homeless shelter fell under sub-programme 4 for human settlements. She asked for more details on the additional allocation for Driftsands. Driftsands was a risky wetland area and she wanted to know what would be developed there. Referring to slide 5, she asked for the details on enhancing existing systems. Did this relate to the Western Cape Government App or was it broader than that?
Mr I Sileku (DA) wanted to know how staff were reacting to the unbundling of the two departments and the transition to a new one. Would the DI maintain its consistency through the change? He referred to page 437 of the Estimates of Revenue and Expenditure (ERE). He asked for more information on the 19 declared priority housing development areas intended to deal with spatial transformation.
Page 439 in the ERE showed the trend of using security services to safeguard projects instead of investing more in addressing the housing backlog. How were the Department and municipalities working together to ensure that land was protected and that individuals or groups were not using illegal methods to secure land?
Regarding affordable housing and the Finance Linked Individual Subsidy (FLISP), he said there seemed to be many people who did not understand how to access the programme. Regarding the Housing Code, there were other housing programmes, but most people seemed to only know about the Breaking New Ground (BNG) programme for those earning less than R3 500. Three seemed to be less interest in the programmes for people earning between R3 501 and R22 000. What were the successes and challenges in the uptake of the FLISP?
Mr P Marran (ANC) asked for clarity about the Department having two HODs. He asked for clarity on the Department's core functions outlined on page 435 of the ERE. He asked about the challenges in forming a new Department and whether everyone was happy and on board with the change.
The Chairperson asked whether all the Department’s new housing projects would be Green Energy Efficient going forward. Who was going to be responsible for which parts of these projects? Was the procurement of diesel by the Department only for government buildings in the province or was it also for the implementation of future projects? She asked the Minister to clarify the separation of the Department’s mobility and infrastructure functions.
The Minister said the Department in its current form, was responsible for human settlements, transport, public works and roads. Mobility focused on the transport industry and how better integration within the transport sector could exist. The Department also built roads, repaired railways, repaired ports and built new ones. It acted as an implementing agent.
The Department was creating a Western Cape Infrastructure Framework for 2050 and was about to commence with draft version 3. It would engage local government and the private sector. It would provide the document to the Committee as it substantiated and unpacked all the functions of the Department. It would engage universities and the private sector to find ways of accelerating service delivery.
To ensure that all the focus areas were able to execute their roles within a set timeframe, the Department would create its own red-tape reduction unit.
It would not be easy to amalgamate two departments with different cultures and risks within a period of 18 months. There were engagements between senior management to ensure that the administrative component was handled carefully, and that no one overstepped their jurisdiction.
The administrative processes were handed over to the two HODs and the senior management teams. Within 48 hours of receiving the Premier’s proclamation, departments met virtually with all their employees. The nature of the questions the Minister received from the broader staff component was twofold: where would each member sit and in which department? The bulk of such questions came from programme 1 which dealt with the department of mobility.
Regarding staff morale, there was a lot more opportunity in where the Department was headed. Many of the staff below certain post levels saw the opportunities, so the morale was high. Where staff would sit would be addressed in the next few days as the Department was operationally and administratively ready. Management was dealing with issues where there were people in excess in certain post levels, and a good example of that was the outgoing CFO of Human Settlements requesting to move to Mobility.
On the HOD: Human Settlements position, he said the current HOD would be the new Deputy Director-General from 1 April 2023. Part of her responsibility even though she would be the DDG, would be to wind up everything concerning the Department of Human Settlements in its current format. The outgoing CFO would need to assist with the winding up. The Premier met with both HODs to assign them their new roles, and they accepted their letters of appointment.
The programme Mr Sileku referred to was Helping Buy a Home and not FLISP, and the fact that the public still got the names wrong meant a lot needed to be done. However, there were some successes to be reported. The Department exceeded its target for the current financial year. A key component that assisted the Helping Buy a Home programme in the Western Cape was a change in how the FLISP was implemented to help more people in the province earn above the R3 500 mark.
The Department needed to first engage local government and councillors of municipalities because they were the foot soldiers in the success of Human Settlements. It then reached out to communities. The Department was not where it wanted to be in terms of its goal, but behavioural change took time. It took three years for the Department to receive a response from local government regarding free housing not being the only solution.
The Department could change its approach in the future. A study done with the Department of Local Government showed a need for the threshold for what was defined as affordable or gap housing to increase to R27 200. That would unlock more opportunities for municipal officials, police, etc. The Department had not done everything right, but it was learning as it moved along and what set it apart from other provinces was that it implemented what it learned.
The Minister said he would provide details on the housing solar geyser projects when he delivered his [budget] speech in a week’s time. The Department identified five housing projects where construction was still to commence. Almost 1 000 houses would get solar geysers and be spread across multiple districts. His guidance to the HOD was that indigent households should benefit.
Ms Gooch said the homeless shelter programme was located under the provincial Public Works Department (PWD) in programme 2, specifically because the property being used belonged to the provincial government. The Department's diesel allocation was for the provincial government buildings. A team predicted the anticipated loadshedding and then analysed the amount of diesel used per generator and put in a bid for funding by Treasury.
The team was also looking for long term projects to reduce the reliance on generators. Solar PV was installed on some of the provincial government buildings. However, in CBD buildings, the rooftops did not have enough space to generate large quantities of power. The team was investigating inverter and battery installations. Allocations for energy in the budget were intended to support the broader provincial interventions on energy security and were not specifically related to government buildings.
Ms Labeeqah Schuurman, HOD: Human Settlements, said the Western Cape did exceptionally well in building and selling the FLISP, and at a Ministers and Members of Executive Councils (MINMEC) meeting a few weeks ago, the province was asked to speak to other provinces on its model.
In the first three quarters of the current year, 2 774 FLISP subsidies were approved. This exceeded the annual target. The province, however, was concerned about a dip in the market and an increase in interest rates which had caused a slowdown. The Department had intensified its marketing both on social media and in the number of engagements with communities. It had increased its engagements with the banks.
Regarding deferred ownership, which was the rent-to-buy model for FLISP, the Department’s pilot project in Agulhas was slowly succeeding. So far, there were 19 units under construction, nine have been sold, and 13 have already been rented. The Department made efforts to engage with municipalities, which helped a lot in bridging the gap between the Department and municipalities on funding.
Mr David Alli, Chief Town and Regional Planner: Human Settlements, said task teams were set up to respond to the challenges faced by the Driftsands community. Three categories of interventions were being rolled out at Driftsands. The short-term intervention was to relocate people to higher ground within Driftsands and to provide basic services on an emergency basis.
The longer-term intervention was looking for alternative land because the Driftsands nature reserve was unsuitable for any human settlement development. The third intervention was to look for suitable land within a five to ten kilometres proximity to Driftsands. There were ongoing engagements with the City of Cape Town (CoCT) for it to be responsible for the basic services needed for the area.
Ms Kahmiela August, Chief Director: Human Settlement Planning, said they could provide the Committee with a list that provided more information on the community housing development areas. The 19 areas were Breede Valley, George, Saldanha Bay, Cape Town, Theewaterskloof, Bitou, Knysna, Stellenbosch, Overstrand, Drakenstein, and Mossel Bay.
Mr Benjamin Nkosi, Director: Strategic Management Support, said the housing app was a success story. It had seen an uptake by members of the community. People were able to either update their status or do completely new registrations on the app.
Ms Murray asked for more details on the red-tape reduction unit and when it would be rolled out. Have there been any engagements with the Department of Economic Development and Tourism (DEDAT) on how their systems could complement one another? Who could make reports to the red-tape reduction unit?
Mr Sileku said he had not received a response to his question about the amount spent on security and whether it was sustainable. He said he was picking up a trend where people invaded land and then used Resolution 32 to procure it on an emergency basis. Did the Department have any plans to curb the looting of land? He was concerned about the loss of experienced Department personnel and its impact on the performance of the Department going forward.
The Chairperson asked about the extent of responsibility of the mobility programme and made an example of land invasions by people who built houses on railway lines. Was it within the Department’s jurisdiction to respond to such issues, considering that they had to ensure the smooth running and maintenance of the railway infrastructure?
On the Driftsands issue, she asked if the Department was not inadvertently making the situation worse for themselves by budgeting for a land parcel they did not already have.
The Committee had found, in engagements with municipalities, that there was confusion about their responsibilities regarding human settlements and who was responsible for the data of the beneficiary list. If such a huge Infrastructure Department depended on the municipalities to succeed, how would it ensure that the municipalities adapted quickly to the changes that were about to happen?
The Department had not met its targets for housing opportunities, and it said it would upgrade informal settlements. What was the reason for not meeting the projections?
The Minister said responsiveness to land invasions depended on the state of municipalities. In 2021, almost 40 were governed by coalitions. The accompanying challenges impacted the response to land invasions as there was often confusion about whom to report to. Where there was no permanent mayor or a council did not have time to engage with delegations, it was impossible to know who had the responsibility to authorise actions. In many instances, the HOD of Human Settlements was called.
The Department had a team which focused on a proactive response to threats of land invasions. They were successful when everyone knew what their roles were. Some invasions cost a lot of money. In March, the Department spent just under R150 million, and over R120 million was spent by the CoCT.
The Department had monitoring units in place because there were always threats of invasions, even when it handed over houses to people. The Department had no choice but to hire security for such places. The main question was for how long, especially because most municipalities did not budget for land invasions. The Department had resorted to taking away housing opportunities to be able to pay for security to guard against land invasions.
The Department was not going to buy land for Driftsands. Its role had always been clear and the CoCT had its own role to play because Driftsands was in its jurisdiction. The Department coordinated with Transport and Public Works and the CoCT, and they all agreed that the Housing Development Agency (HDA) had a role to play in the Driftsands matter.
The red-tape reduction unit would be a multidisciplinary, multi-representative, administrative structure. Certain capacities vested in local government planning, so the approach would be to ensure that once the Department hits the ground running, the unit would have identified the red tape and found ways to work around it. One of the biggest criticisms of the public sector was that it loved creating rules, but it also took a while to adhere to its own rules, which delayed projects.
The private sector worked differently. The quicker they could get something approved, the quicker it was implemented. Time was money for the private sector. The Department had social responsibilities, and the private sector had economic responsibilities and a balance sheet to look after. The core focus of the red-tape reduction unit would be on how to bring the public and private sectors together. The Department aimed to increase the scale of its developments in partnership with the private sector by reducing the red tape.
Regarding upgrading informal settlements, the Minister said the approach by different departments would have to change. The Department could not do the same thing repeatedly and expect different outcomes. The aim was to reignite, refocus and re-package the way the provincial government worked.
Ms Gooch said it was inevitable in any Department that some people would want to leave as change unfolded. There would be a process to engage with people to ascertain why they wanted to leave and that would be followed by processes to fill the gaps. Within the limits of the compensation budgets that had been allocated, the Department would ensure that the necessary skills and competencies were available.
She said the Department did not yet have any mandate regarding rail, whether building it or maintaining it. The Minister had presented a potential future view of the new provincial Department. Currently, the Committee would still have to hold the national government accountable for any invasion across railway lines. However, that did not mean the provincial government and the CoCT were not working with the rail authorities and national government to find solutions.
Mr Gerrit Van Schalkwyk, Head of Policy and Strategy: Transport and Public Works, said a Joint District and Metro Approach (JDMA) had been adopted in the Western Cape. The Department looked at infrastructure holistically and broke it down into key projects driven within the respective municipalities. The Department would see where the challenges were, why they existed, and how they could be overcome.
Ms Schuurman said there were three phases for Driftsands, and R8 million was allocated for phase 1 dealing with the emergency relocation of 400 households. The remaining budget of R13 million needed to be reprioritised and finalised. The most important part was that the CoCT should come on board, and there had been several meetings lately.
The Chairperson wanted to know why the Department spoke about money allocation while it was still in the process of engaging with other spheres of government and did not know how they would respond.
Ms Schuurman said the Department had an implementation plan and there was a committee structure where all the stakeholders were crowded in.
The Minister said a dam at Driftsands was an asset of the CoCT. There were cracks in the dam walls which needed to be repaired and there were formal engagements with the CoCT. A committee was tasked with quantifying how much the repair would cost and identifying what the flood risk would be, which was how the relocation of 400 households came about.
Ms Gooch said the relocation would be within Driftsands. Property would not be purchased elsewhere. What was required was the clearing and compaction of areas to which people could potentially be relocated. An allocation was made from the Human Settlements programme to fund the relocation of people from critical areas.
Since Driftsands had been de-proclaimed as a nature reserve, there needed to be engagements between the CoCT and the province about its future. It would have to be planned properly from a human settlements perspective.
Ms Murray wanted to know if the budget considered the Growth for Jobs (G4J) strategy. If not, following its tabling in Cabinet, how would the budget be shifted to accommodate it? Referring to page 444 of the ERE, she asked about the successes and challenges in moving from FLISP to the Help Me Buy Subsidy. Referring to page 452 on risks and reprioritisation, the Minister had mentioned distribution as one of the focus areas for Eskom in reducing load shedding. She asked for more clarity on the role played by the Department in bolstering electricity distribution.
Mr Marran said page 437 referred to the aim of creating a spatially transformed province. Were any current projects linked to spatial transformation? Had the Department done audits of municipal, provincial, or national land and what were the details? He asked for the details of the 19 declared priority housing developmental areas and how many housing opportunities would result. Page 438 said the Department was a key contributor to the Provincial Strategic Plan’s vision-inspired priority (VIP) of safe and cohesive communities. What safety features would be included in housing projects?
Mr Sileku said programme five on page 445 referred to 234 participants that were taken through training. He said emerging contractors who were trained often disappeared.
On page 446, were there any timelines for completing the feasibility assessments? It had become a norm recently that people work three days in the office, and the other two at home, but such arrangements were on an ad-hoc basis. Did the Department have any policy to manage such cases? There needed to be consultation before any change to conditions of employment could be made. On page 448, he asked if any alignments existed between the Department’s Informal Settlements Upgrading Partnership Grant (ISUPG) and the National Upgrading Support Programme (NUSP).
The Chairperson asked how many private partnerships the Department foresaw itself agreeing to in the new financial year. On page 469, the Department spoke of building youth care centres and a homeless shelter. Where was the Department going to build the homeless shelter and why was it only planning to build one because homelessness was a province-wide problem?
On page 481, the Department mentioned the number of learnerships and bursaries. How was this aligned with page 445, where the implementation of training programmes was mentioned?
The Minister said there was a convergence of some of the Departments’ programmes for skills development and upskilling of lower-graded individuals in the construction sector.
The electricity grid was in two formats, the national grid and the municipal grid. The Energy Council in which he participated had identified that for the Western Cape to become less reliant on Eskom, it would have to focus on the municipal electricity systems and how to find alternative energy that it could plug into the system.
It was easy to generate and distribute electricity, but storage was the problem. The Energy Council would meet in the next few weeks to make key announcements on specific pilot projects. The Infrastructure Department sought to partner with the private sector in the use of municipal distribution grids. The Energy Council was assessing the capacity of the municipal grids.
The biggest success story of the NUSP had been in Mossel Bay until the protest the previous year, in which the entire community prevented the Department from continuing with the next phases. The ISUPG demanded a more focused approach to developing informal settlements because all nine provinces had been aimless in the past. However, if municipalities did not play their part, it presented challenges for the ISUPG.
Regarding safety, he referred to projects such as Conradie Park, where units were designed to keep the communities safe. The Department worked with its sister departments to build youth centres and homeless shelters.
Ms Gooch said several priority focus areas were identified in the G4J strategy. The Department’s projects, whether for Human Settlements, Roads, and Public Works, were all placed under the G4J strategy. There was no need for a specific budget realignment.
Work was being done on a few spatial transformation projects, including the Founders Garden and the Artscape Precinct where the Department expected a yield of about 2 300 units. The Luyolo Projects and a few others listed in the budget document would help with spatial transformation.
The Department held the asset register for the Western Cape Provincial Government, but it did not hold the asset registers at municipal and national levels. There was interaction between the spheres of government where necessary on land parcels that needed to be transferred from one sphere to another.
On public-private partnerships (PPPs), she said there was one formal PPP, the Chapman’s Peak PPP. Another PPP was being explored for Caledon to provide office accommodation for some departments. The Department would be pursuing other partnerships for upgrading roads or infrastructure.
The relevant departments determined the location of youth care centres and homeless shelters. In the case of the homeless shelter, the Department of Social Development indicated that it needed a property within the City Bowl area.
She said the difference between page 481 and 445 was that page 481 was linked to the Department’s staff training, whereas page 445 was linked to external training provided to contractors, artisans, and others.
Ms Andrea Campbell, Chief Director: General Infrastructure, said work on the Energy Feasibility Assessment had already started. The team was looking at short and long-term options.
Mr Richard Petersen, Chief Director: Expanded Public Works Programme (EPWP), said the Empowerment Impact Assessment’s objective was to look at the infrastructure projects of more than R10 million and analyse the empowerment possibilities. For example, it looked at the engagement of local labour, local suppliers, and local subcontractors. A core aim was to track the progress of developing contractors.
Adv Chantal Smith, CFO, Department of Transport and Public Works, said the Construction Industry Development Board (CIDB) did not allow contractors in lower grades to apply for tenders outside of their grades, but contractors with higher grades were allowed to tender below their grades.
The problem was that bigger contractors tended to play in the space designed specifically for smaller contractors. A lot of thought has gone into finding ways to protect smaller contractors so that they could emerge into the small to medium contractor space. The Department implemented a contracts framework with the aim of providing maintenance work to contractors in the lower grades.
A key aspect in implementing the Infrastructure Framework was the development of norms and standards around implementation because the Department was currently not the only one dealing with infrastructure.
Mr Van Schalkwyk said two years ago, the Department entered a partnership with academia and the private sector to improve capacity for future thinking and change management.
Ms Schuurman said there were currently 40 projects at various stages of implementation in terms of the ISUPG grant. An amount of R505 million was involved.
Ms August said the Department did not have the data on the number of households helped through the priority housing development areas (PHDAs), but they analysed the budget spend. In the previous year, the Department spent 46.3 percent of its budget on PHDAs. For the next financial year, 25 percent of the budget would be spent on PHDAs. Information on household numbers could be provided in a written response.
The Minister said the complexity of the Department of Infrastructure was clear for all to see. The journey for the new Department had just started and the Committee would be part of it. It was time to open a new chapter and show communities that this government put people at the centre of everything it did.
The Chairperson said the Department needed to figure out how it would support SMMEs and emerging construction companies. Another issue was land use by the government and municipalities. Regarding the Human Settlements component of the Department, the Committee would further engage them on the backlog of title deeds.
Committee report on vote 10
The Committee adopted a report that it approved the budget for the Department of Infrastructure.
Mr Marran noted the ANC’s opposition to it.
The meeting was adjourned.
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