Cities of Johannesburg and Mangaung on utilisation of Urban Settlements Development Grant, informal settlements upgrading programme, serviced sites & plans to curb land invasions

Meeting report

The Chairperson welcomed all present, and Mr Siyabonga Zama, Acting Director-General (DG), Department of Human Settlements (DHS), introduced the delegation from the Department.

The Chairperson welcomed the delegation, and indicated that this was a follow-up meeting with the metros. The Committee had already met with eThekwini Metro and Ekurhuleni  Buffalo City, the City of Cape Town, and still needed to meet with the City of Johannesburg, and the Mangaung and Tshwane Municipalities. The Committee had been told that the City of Tshwane did not have money to travel. She asked how money should be appropriated for people who did not want to account to the Committee. This was a worrisome statement, but the Committee had decided to go to Tshwane and would like to see a five-year record of projects. She emphasised that the Committee would exercise thorough oversight of Tshwane Municipality.

She asked why the Mayor’s were absent from the meeting, as Members were supposed to engage with the political leadership, not the support staff.

Mr Patrick Phophi, Head of Department, Department of Housing, City of Johannesburg, said the meeting was initially honoured with confirmation from the Member of the Mayoral Committee (MMC). The previous day, the budget speech had taken place and the budget debate would occur today. Both the Mayor and the MMC had to be within Council to vote on the budget. If they were not present, the Municipality would suffer the consequences. It was not that the Committee was not important. He had been requested to be present in the meeting today to represent the city.

A representative from Mangaung said the Mayor was unable to attend. The MMC was supposed to attend the meeting. She was unaware of why the MMC was not present.

Ms M Makesini (EFF) said the apology from the City of Johannesburg was understandable, but there was no apology from Mangaung, except from the Mayor. Preparations had been made, and Mangaung should take Parliament seriously.

Mr C Malematja (ANC) said the City of Johannesburg's apology should be accepted. When the President was visiting, the leadership of the metros had to be present. He thought the Committee should accept the apology of the Mayor of Mangaung.

Ms Makesini said there had been no apology from the MMC in Mangaung.

The Chairperson said the delegation from Mangaung did not know why the MMC was not present, despite preparations made for her to attend the meeting. The Committee would await an explanation and apology. The Committee understood the President was visiting the area.

Johannesburg and Mangaung use of DHS grants

Ms Lucy Bele, Chief Financial Officer (CFO), Department of Human Settlements (DHS), and Mr Pemmy Molelekwa [name unconfirmed] presented to the Committee on the utilisation in the City of Johannesburg of the Urban Settlements Development Grant (USDG), the informal settlements upgrading programme, serviced sites, and the plans to curb land invasions in Johannesburg.

A representative from the Mangaung Municipality presented to the Committee on the capital breakdown and allocation per service of the Urban Settlements Grant framework, the USDG financial and non-financial performance, and the upgrading of the informal settlements programme, serviced sites and land invasions.

See presentation slides attached for details.

Discussion
Ms Makesini asked why only 60% of the target had been met in Johannesburg. She wanted more information on the "Mafia elements" destabilising projects and what the Municipality was doing to ensure this did not happen.

She said the problems in Mangaung were political and officials would be unable to account for some of the challenges. She suggested the Committee should visit Mangaung for a detailed explanation. In 2022, before the national teams arrived in Mangaung, provincial teams had been sent to the Municipality and there had been no improvement. She asked what the role of the national team had been if there was still no improvement in dealing with the challenges. The political leadership of Mangaung should account to the Committee. Mangaung had lost R75 million on a project in areas such as Wepenaar and Thaba Nchu. People were not receiving the services due to them, and various grants were not being spent in the Municipality. The Department of Cooperative Governance and Traditional Affairs (COGTA), National Treasury (NT) and the Department of Human Settlements were meant to be dealing with these issues, but the situation had become worse. The budget expenditure of Mangaung was at 3%, and the annual budget would end in 15 days. The problem would not be resolved in 15 days. What system was being used to resolve such issues, as the mid-term budget had shown red flags and funds that needed to be better utilised?

She wanted information on a project in Namibia which was not mentioned in the presentation. She asked if a private contractor had built the development, or if Mangaung was involved in this. There were also challenges relating to the non-payment of invoices and delays in decision-making. The challenges raised by the Auditor-General (AG) seemed more political than administrative. She had heard that people needed to offer 10% of their remuneration to be paid. She asked why people were not being paid when the work was done.

Mr A Tseki (ANC) said there was information on the expenditure of Mangaung in the presentation, but he could not see any information on the expenditure of the City of Johannesburg. He asked what would happen to the funds that were not spent. Would the City of Johannesburg apply for a rollover? Mangaung had mentioned that the chance of succeeding with the rollover was zero.

On site services, he understood that quantification was a challenge. How many site services would be developed in both Mangaung and the City of Johannesburg? His experience in Botshabelo showed that there needed to be serious development in site services. People were occupying spaces and development took place there later. Diepsloot was becoming like Alexandra Township. Planners should visit the township and see the development. How would the city prevent the issues surrounding this?

He asked if people still applied for further development to their houses or structures, as he doubted this was the case in Ekurhuleni. He said people just built up or renovated their houses even if they had built on stormwater drains. He asked how the Mafia elements would be dealt with, but he had heard communities had been engaged. Was the City of Johannesburg able to handle the matter? He asked about the future of Johannesburg's residential development, as it had become a squalor. What needed to be done to revive Johannesburg? There was a radio room to stop invasions. He asked for more information on this. There was an area in Johannesburg, close to Orange Farm, where more than 10 000 shacks were erected within a week. He had addressed the community and all they wanted was services. He asked where the radio room was then. Some shacks had been demolished. The national deployment had been there for some time, but was there light at the end of the tunnel, where Mangaung could function effectively without the teams sent to assist it? Title deeds were an issue in Thaba Nchu. Law enforcers do not respond to invasions within 48 hours. This gave people rights, as the government did not act within a certain timeframe. He said there was an area where a budget was not passed, and asked whether coalitions had somehow caused this?

Mr Malematja said some issues, such as land invasions, were not taken seriously. There were complaints about ten shacks which were deemed to be a land invasion. The challenge was that officials were threatened, but law enforcement must act within 48 hours. Policies were mentioned by the municipalities which made it difficult for service delivery. He asked for clarity on which policies were being referred to, as all policies were formulated based on the needs and interests of the masses. Developers would receive more work but had not finished the work already allocated to them. He asked about rollover systems where the city had done well. He was unsure what was being referred to, as the municipalities were under administration. He was troubled by those in acting positions, as it seemed they were appointed based on closing a gap, not their capacity. Did these people have the required qualifications to act in a certain position?

He said the Region A community in Diepsloot always complained about houses. He was aware of the powers behind the riot act and why it had been passed -- it was because of the land Mafias who were continuously stopping the projects. He knew for a fact that the riot act had been implemented at many projects in Gauteng, and people were still working. When would this be implemented?

The presentation did not mention anything about title deeds, but it mentioned a waiting list and this would never come to an end, because people had not been verified to ascertain whether they qualified for houses or not. The Municipality was commending itself for increasing its spending from 29% to 44%, but he was concerned about whether expenditure would reach 100%. Both metros should be measured by the deliverables on the ground. It was misleading if the funds had to be rolled over.

The Chairperson said concerns had been raised regarding the intervention team in Mangaung. All other departments should have been coordinated. National Treasury was looking at the role of intervention. The intervention was intended to improve Mangaung, but there has been no improvement. Mangaung had become a developer when they did not have the capacity to run themselves, and this was the bigger issue. The biggest chunk of national grants came from Mangaung, which should develop and lead projects. She asked how the District Development Model (DDM) worked in the metros. How was one plan and budget produced for all departments? If this failed in a metro that was supposed to be run by one administration, other areas were clearly in chaos. She was aware that COGTA was responsible for oversight in municipalities, but in terms of the budget, more interest should be developed in Mangaung. Where was the city in terms of capacity? Were plans in place? She had heard that planners were being sourced, and asked whether these were engineers, as the engineers should be deployed through the Municipal Infrastructure Support Agent (MISA).

The problems were political and administrative. What role did officials play who had been deployed to intervene in a particular municipality? If there were difficulties found, what had been done to remedy them? Sometimes decisions are taken, and legislation may not allow for certain things. The Committee had visited Johannesburg and a multi-storey development had to be built, but people had invaded the houses at the time. There were also many units which were not occupied. There were invasions, and the unallocated units and the beneficiary process were still not fixed. The Diepsloot project was meant to accommodate people from informal settlements. The Committee knew that in Johannesburg, the majority of people were in informal settlements, and it had promised that an audit would be done. Those who did not have the required documentation were taken to the relevant authorities. Those with the required documents had been assisted to be integrated in the project, but there was seemingly no progress. This was extremely concerning. Both grants had been invested in the project, but there was a lot of corruption.

The Committee expected the City of Johannesburg to report on job creation. How many women with disabilities have benefited from programmes? On land invasions, the impact on the ground was not felt, despite the projects the City of Johannesburg was engaging in. What would it do to curb invasions and illegal occupation of land? The question was whether there was interest in amending legislation. One could not have a response team in 48 hours. If the city was given a month, would it amend safety and security issues? The issue seemed to be about capacity. What is the role of the police if they cannot protect the property of the city? If we cannot see the impact and there is no change in people occupying houses which do not belong to them, there is an issue. What was being done about this?

Without suppliers, engineers or management, there could not be accreditation. It must be proved that the required skills are present. The allocation process and the management of beneficiary lists was an issue. How was the beneficiary list managed, and how was it ensured that the destitute were prioritised by both Mangaung and the City of Johannesburg? How would the maintenance of the projects be managed, as this was not mentioned in the presentation? And what was the relationship between the Department of Human Settlements and other departments? For instance, the Department of Water and Sanitation gives municipalities grants through COGTA. How could one ensure there was collaboration and that backlogs were resolved? No funds should be sent back to National Treasury.

She asked what the Mangaung Municipality and the City of Johannesburg both needed to perform better. A 60% performance was not good -- 100% was expected. A lot of money was allocated, and it seemed like it was beyond the capacity of the municipalities to spend it. She was aware that the City of Johannesburg may encounter issues because of the coalitions. The Committee approved budgets based on projects, and officials should continue to implement projects. The Committee was unhappy about the pace at which the municipalities were dealing with backlogs. She said the City of Johannesburg was dirty, particularly in the centre, and people often offered hair care services in the same space where food was cooked. She had had to replace tyres due to the potholes in the roads.

DHS's response

Mr Zama said he would respond to the interventions by the Department of Human Settlements. Any intervention by the national government in a local sphere of government was done through the law, and this came with certain intentions. It is not a complete takeover of one sphere by another. The national government personnel deployed in Mangaung were qualified, with the required skills. Unfortunately, when interventions occur, a system with its own challenges is inherited. He had worked in local government for 17 years, and was quite familiar with its processes. When COGTA implemented "Back to Basics" and governance collapses, the entire system collapsed. Any intervention must begin with the systems. Mangaung has been able to work on its systems. A meeting had been held with the Acting City Manager as part of the interventions. The previous day, colleagues had also tried to assist the metro with processing business plans. Interventions from an administrative point of view were ongoing. He understood the concerns around the timeframes for interventions, but if the interventions did not go with political stability, they were bound to take a long time. Some of the acting positions may also have had an effect on interventions.

On the District Development Model, he said there was a good relationship with the Department of Human Settlements. During the past three weeks, colleagues had spent time working with all three metros to balance the books and confirm expenditure, but the platforms used to work with the metros may pose an issue. Heads of Departments (HODs) and Members of Mayoral Committees (MMCs) attend Ministers and Members of Executive Council (MINMEC) meetings, and technical MINMEC meetings, as and when required, but one of the challenges faced in metros was when there was no law for the Department to intervene.

Ms Bele referred to the role of interventions and the responsibilities of the Department of Water and Sanitation (DWS), given the recent issues with water, and said that a professor had spoken about the Constitution and the reason why the DWS could not take over the function of the City of Tshwane. This was due to the Constitution and its position on cooperative governance. National teams sent to intervene in Mangaung and Hammanskraal still needed to report to the Council. Cooperative governance affected how national government was able to take over and affect the functioning of municipalities.

The DHS had focused on projects, but National Treasury was in charge of the Division of Revenue Act, and there was a letter that redirected funding to fleets and other projects, making it seem like the money had not been spent. The matter had been brought to the attention of the Minister of Human Settlements, who had written to the Minister of Finance requesting an explanation of how funds could be redirected to other projects. Manguang Municipality has been able to survive due to grants from the national Department of Human Settlements. A meeting had been called at a ministerial level, and the issue was reported to have been dealt with.

There were many gaps, and most projects were not moving. They were drilling down and focusing on projects. The Minister had indicated that she did not want to hear about spending, but on the progress of projects. The Department visited Kenya, and one of the things that stood out was the inner-city development, which was beautiful. Houses were being built in Nairobi and offered as social and affordable housing. Dilapidated buildings were being purchased in Nairobi and fixed. South Africa could learn from this and do the same.

Ms Tshepiso Moloi, Deputy Director General (DDG): Corporate Support, DHS, said that in 2010/11, Mangaung was preparing to receive accreditation for a higher status, as it wanted to become a metro. The national Department then assisted it for accreditation 1 and 2 in terms of the housing development accreditation framework. It had built the governance structures and capacity was stable at that time, resulting in Mangaung being accredited for housing. It also had an agreement signed with the province to take over some projects with the province. As time went on, challenges around non-capacity, service delivery, governance and political instability had arisen and that agreement had never been concluded or renewed with the province. The intervention in Mangaung ensured that some of these challenges were dealt with.

The Minister had decided at the last MINMEC that all municipalities accredited for level 1 and 2 in terms of housing development must be revisited, and a report must be produced on the capacity and political governance to undertake the function. There are also a number of challenges relating to revoking the statuses of these municipalities. The Minister had indicated that other municipalities could not be accredited in the interim until the framework had been reworked and approved to capacitate those municipalities that were lagging behind.

With the North West Housing Corporation, around the Winterveld and Mabopane area, there were around 14 000 interventions by the Department. A debtors book and asset register had been provided to the Department on this. After verification, it would transfer those properties to their rightful owners, but Thaba Nchu still had houses that the North West Housing Corporation owned. After numerous engagements, the Department had still not been issued with a debtors book and asset register to highlight the extent of properties that should still be transferred and have title deeds issued. Without this, the Department could not intervene in Botshabelo and Mangaung. The Department had to engage with Mangaung and the North-West Housing Corporation to determine the extent of properties to be transferred.

Mangaung's response

A Mangaung Head of Department (HOD) said there were always elements against the work being done, such as unions or the administration and the province versus the Minister. It was safe to say that ever since she arrived, she had never been welcomed and there was always pushback against anything she had tried to implement. There had been a provincial administration for three years, and now there was a national intervention. The national intervention came in the form of being seconded to a Head of Department (HOD) post, and when one is seconded to a department or Municipality, one forms part of the employees, whether in top administration or not. The Municipality had tried to pass a budget in the past financial year, which did not work. The budget was not sustainable. The Committee was correct in saying the intervention was not working, but it was not sustainable and nothing could be done without support. An area could not be changed if one was not welcomed.

The Municipality had not spent its funds due to a number of issues. It had received assistance from the Department of Human Settlements, but there were still gaps. Different departments should work together. The Municipality had worked in silos for so long that projects remained unfinished. There were three construction and social amenity projects which had been stalled for the past ten years and every three years, they had been revitalised, and new people were appointed each time. With the assistance of the DHS, Mangaung had been able to identify issues and what should and should not be done, but it was too late to change or implement anything new as it was already in the third quarter. By this time, at least 75% of the grant had to be spent with deliverables, but only 43% had been spent without deliverables. The executive management team and the province had started interacting only in January, and the District Development Model was still not approved.

She asked the Committee where intergovernmental relations were, as there was a huge debt with water. The National Treasury benchmarking review revealed a huge problem, and the Department of Water and Sanitation had nothing to say about the state of water in Mangaung. The cholera outbreak had begun in the Free State, and nothing had been said about this. Over 80% of the water treatment plants in the Free State were dysfunctional. The generation coming after her would have nothing if things had not changed. Mangaung had an expenditure of only 43%, and when combined with the entities, it had an expenditure of 82%, which was still nothing.

The Municipality was not collecting enough and its infrastructure was non-existent. The finance team was working on a strategy which would assist the Municipality with expenditure where it was able to make its own funds available. This would take a long time to achieve, and support was needed from all spheres of government. The Council should be dissolved altogether, since Mangaung was under administration. The Municipality was dysfunctional, and should become steady and then stable. There were 14 municipalities which were dysfunctional and seven which were steady. Those who were steady were slowly moving towards being dysfunctional again.

The last time the Mangaung municipality appointed staff was in 2014. It met in July, August and September 2022 to appoint more staff. On 19 December 2022, the Council resolved that no appointments would be made in the Municipality. To date, there were fewer than 2 000 staff members.

Referring to land invasions, she said most areas had been invaded by government officials such as members of the South African Police Service (SAPS) and other departments. These officials had their own sites with title deeds, but had invaded other spaces hoping their children would get the space. Most people were aware that five township establishments were in progress, and people invaded these spaces, which changed the entire layout, resulting in restarting of the process.

Ms Makesini asked if some officials could be summoned to account for what the HOD had been saying to the Committee. She said she knew her statements would be disputed.

The Chairperson said the officials should be called to account. They could not apply legislation when it suited them and revert back to another clause when it did not suit them.

An official from the Department spoke about the job creation system involving the Expanded Public Works Programme (EPWP).

City of Johannesburg's response

Mr Phophi said there had been a report Council needed to approve, but government had changed and the report was not approved. The report required mayoral committee approval. Without approvals, decisions made would lead to investigations, or the idea that people were pursuing their own agenda. Supply chain management processes were also being frustrated and panels were cancelled. 13 informal settlements had been targeted and goals had been achieved, but with the bigger settlements, the planning department had to approve them.

At the end of May, the spending pattern was at 63% and currently, at 78%. The city was confident that it would spend its allocated budget. On site services, the target was 3 657 sites earmarked for sites and services. It was moving at a snail's pace, as some areas needed to be cleared for development. In Alexandra township, structures had been illegally built by a church and demolished three weeks ago. In 2016, a consortium was building on the city’s network, which was impacting infrastructure. The city had demolished this, and the occupiers had demanded compensation. The same thing happened in Diepsloot, and Mafia elements were making money.

Taking action or demolishing a structure within 48 hours was not helpful, and legislation relating to this should be amended. The court had indicated in 2017 and 2018 that the city must have the names of the people in illegally built structures, and it must understand the status of those people and whether they could fend for themselves. The city must then provide alternative accommodation -- but how could this be done for those engaged in illegal activity? Two people had died in land invasions close to Orange Farm. One had died as a result of being shot. There were some people with seven stands in the area. The city had gone to court on the structures in Lenasia and won the case, but in some areas, it faced challenges. Last week, it found shacks close to Orange Farm and this area needed to be saved for Eskom to build its network.

The City of Johannesburg had launched an internal department to deal with Mafia elements and engage with communities on this, as they were sometimes instigated to collapse some of the projects. People were vetted to assess whether they had a criminal record or any other interests. Some instigators were being threatened, and three houses belonging to whistle-blowers were burnt. The city was working with private property owners, and those who dealt with the rights of ratepayers and property owners in the inner city. The worst area was the FNB precinct, where people sold things on the streets to make a living. Some people had signed a lease agreement with the city but refused to pay and had sub-let the space to foreigners. Permit holders in Alexandra receive notices and fines to stop illegal activity. If there is no compliance, the city demolishes the structures, which was when the occupants negotiated to remain in the space. There were many service delivery issues in Diepsloot. Some people invaded land and needed to be evaluated to ensure they did not occupy the land permanently, as other people would flock in.

The target for issuing title deeds over the medium term expenditure framework (MTEF) period was 10 518, and 11 109 have been achieved to date. The target of transferring properties in Alexandra had been surpassed, and spaces in sub-divisions needed to be audited. In spaces such as Sebokeng, the network was very important, and if there is no sewer network in the south, it would paralyse 5 000 sites. People had been relocated from Sweet Waters, but connecting to the sewer network was challenging.

Another project had started in 2008 and approval was received from the city. The project plan was for 6 000 units, and there were now 7 500 units. The deliverables would be increased to 11 400. There was a mine dump space and an old hostel which would be demolished to increase the number of units. The project moved along as and when space was available.

The city was finalising a process of maintenance, where developers must get a body corporate to augment reconstruction and development programme (RDP) houses. Those living in RDP houses did not earn enough money, and they would make an initial contribution to sustain the structures for five years, after which the body corporate would make money from rental units to ensure that it does not become a squalor. The Department of Human Settlements had requested the City of Johannesburg to remove rates charges for people who had fully subsidised units. This was working, as people could not be expected to pay rates for services and contribute to the body corporate when they were unemployed or receiving South African Social Security Agency (SASSA) grants.

Regarding issues of corruption and maladministration with projects and the handing over of houses, there were a few houses chosen by the Council where the residents had been approached, and foreign nationals were staying there. A Council resolution was passed in 2019 in Lufhereng, that councillors should allocate units. To date, the forensics team could not confirm that the correct allocations were made, as the required documents were not in place. If people were found to be selling units, they would be dealt with decisively.

Land invasions on private land presented a complex issue for the government, as it had to compel owners to go to court. Allocations were made with a preference for older persons. A 110-year-old who was allocated a house may not get a chance to occupy the house, and the person's daughter would be living in it. He was constantly receiving calls about houses not being allocated, and houses being sold to neighbours. Some people were allocated a house, but the partners took over, which became a huge problem for the Department.

The Department could do better, but needed to be assisted with approvals of reports and amendments of variations. For instance, if a contract should be extended, according to Section 116 of the Municipal Finance Management Act, one needs to advertise for 30 days and write a report that goes to the Mayoral and Council Committees to note objections. If this did not happen, they would suffer the consequence of not spending on a project while it was in progress. There were two projects where R110 million should have been spent in one financial year, but this would become irregular expenditure without approval. There were some projects in Johannesburg, such as Diepsloot, where no progress had been made. An accrual would be raised so the money was committed to the system. The Department would like to create a forum for all property owners and ratepayers in the inner city to assist with relaxing rates, and take back their properties and develop them.

Mr Tseki asked for continuous reports on taking back the city so that this could be tracked in separate Committee meetings. Samples and biometrics were used to verify the residents and beneficiaries of houses. The Department should have a tracking system in place for this.

The Chairperson said the Act stated that the houses belonged to government for ten years, but it should develop a programme on how to protect the houses for that duration. Government must monitor the houses it gives to people. It must be included on the title deed, so people are aware that legislation was in place to monitor the houses for ten years. The law should state that people could not rent out a house given to them by the state if they did not have any other accommodation. This would help to stop the creation of informal settlements. She referred to Hillbrow in Johannesburg and the surrounding environment, which was concerning. Spatial planning and integrating people were important. The Department would be called again to respond to issues in the metros.

The meeting was adjourned.