Acquisition of state-owned land including Priority Development Areas and measures to curb land invasion/unlawful land occupation; DHS Q3 2023/24 Performance; with Deputy Minister

Meeting report

Department of Human Settlements (DHS): Third quarter report

Mr Shaun Mlanzeli, Acting Chief Director: Office of the Director-General, DHS, led the presentation on Quarter 3 Performance as per the 2023/24 Annual Performance Plan. For the period under review, the Department met 88 percent of its targets. Thirty-three targets had been planned for, with 29 achieved. This was a slight improvement over the previous quarter.

One notable target not achieved under the Administration Programme was the appointment of a service provider for the Digital Transformation Strategy and Implementation Plan (DTSIP). The State Information Technology Agency (SITA) had been approached to assist with developing the plan and the acquisition of their services would be finalised in the fourth quarter. 

Ms Lucy Bele, Chief Financial Officer (CFO), DHS, gave an overview of the financial performance. The revised budget as of 31 December 2023 showed that the departmental expenditure was at 74 percent of the total budget at the time of reporting. The operational expenditure was at 65 percent, while grants and transfer payments were at 75 percent.

Concerning under-performance or under-expenditure of provincial grants, provinces were requested to submit their recovery plans which were analysed and forwarded to the Minister and Members of Executive Council (MINMEC) forum. MINMEC resolved that there would be bilateral meetings between the Minister and the MECs of the affected provinces, which eventually took place. It was then resolved that funds be withheld from underperforming provinces and shifted to provinces with performing projects encountering cash flow constraints. Similar interventions had been explored with the country's metros.

(See attached presentation for further details)

Discussion

Adv M Masutha (ANC) noted the improvements reported by the Department. He noted however that in the end, delivery did not happen only at the national level but further down the track and especially at the local government level, where there were serious problems. Even though South Africa's constitutional democracy dictated that there be a distinction between the three spheres of government in running their affairs, the reality was that the national leadership needed to take responsibility to make sure that the overall system worked for the betterment of the lives of the people. Since the last local government elections, there have been a lot of coalition governments across the length and breadth of the country, especially in the big metros. The reality was that not much political stability had been realised in the process. The consequence of that had been that local government in those areas had not functioned optimally, impacting service delivery. Much of that instability was purely political and those in political leadership should reflect on this, because, at the end of the day, it was the citizens that suffered.

Adv Masutha further remarked that it was unfortunate that the Minister had to attend a Cabinet meeting on the day of the Committee meeting, because she would have been the best person to guide it on measures that were being taken, especially at the level of Cabinet itself, to ensure that stability was realised in all three spheres and especially local government level. This would include what was being done to ensure that provincial-level efforts were made to help municipalities stabilise, because budgets were not being passed, meaning that funds could not be spent. It was unacceptable that after 30 years of democracy, this was happening. Political instability saw billions of rands being returned to the fiscus because mature agreements could not be reached. He noted that this seemed to be happening across provinces, and instead of political parties pointing fingers at each other, they should work together to ensure that the people of South Africa received services.

Ms M Makesini (EFF) requested a detailed report on consequence management concerning an unpaid invoice mentioned in the presentation. How many of the non-achieved targets had been deferred to the Fourth Quarter? She also requested a report with updates on projects, especially in KwaZulu-Natal and the Eastern Cape. What were the challenges at the different municipalities and how effective would the recovery plans be? Were there any other interventions in place to assist these institutions? With regard to the performance of municipal grants, which municipalities were doing better than others?

Responses

Ms Ngaka Dumalisile, Deputy Director-General (DDG):  Affordable, Rental and Social Housing, DHS, noted the comments by Adv Masutha and committed that should the Minister not be able to join the meeting after the Cabinet meeting, the issues would be escalated to her for detailed responses. She assured the meeting that some of the 12 percent of targets not achieved had already been achieved, including settlement of the outstanding invoice reported on.  

Ms Mathope Thusi, acting DDG: Corporate Services, DHS, said regarding the ICT strategy that the Department was following up with SITA and they hoped that by the end of the week, SITA would have responded with a proposal for an action plan. They hoped that the matter would have been concluded by the end of the quarter.

The CFO, Ms Bele, responded on the issue of the invoices. The unit responsible was requested to give a detailed response, after which a submission was made to the accounting officer. Further guidance was awaited from that office following an investigation, after which a report would be given to the Committee. She assured the Members that the finance division of the Department was working hard to ensure compliance with prescripts.

She noted that a transfer to the Social Housing Regulatory Authority (SHRA) was made in January at the request of the entity, so this was not to be seen as a target that had not been met. Regarding the Economic Classification Programme, she said the Department had an Emergency Housing Response Fund used to procure building materials or fire kits. Service providers were appointed, and information about actions taken was available from the unit.

The CFO outlined the challenges they had met in the various municipalities, confirming the issues about political instability raised by Adv Masutha. This included instances where councils had not sat to approve expenditures. Buffalo City was at green in the colour-coding system for performance, which meant they were doing well. Others were doing fairly well. The metros coded as red were the City of Tshwane, Nelson Mandela Bay, Mangaung and Ekurhuleni. They had been requested to submit recovery plans. The Department had proposed that funds be moved from non-performing projects to those that were doing well. Each municipality had presented their own proposals, and these would be looked into, working with the National Treasury. However, the support of political leadership would still be crucial to ensure political stability.

Regarding provinces, the Western Cape had not done well and hence its recovery plan was being discussed, as had been done with provinces like the Free State, which was already yielding results.

Mr Siyabonga Charles Zama, DDG: Informal Settlements Upgrading and Emergency Housing, said that in total, they were busy constructing 1 484 Temporary Residential Units (TRUs) for people affected by different disasters, especially those who had been residing in mud structures. In the Eastern Cape, there were 962 of these units in different districts. In KwaZulu-Natal, 522 were being built and these were at various stages of construction. In far-flung areas, contractors had challenges procuring suitable building materials. In some rural areas, challenges included weather patterns and accessing rugged, undeveloped terrains. There were also local business forums in some areas that expected to be contracted at higher rates, which frustrated progress. He proposed that when the Department reported on the Fourth Quarter, they would be allowed to submit detailed information on the progress made with the various projects.

Dr Alec Moemi, Director-General, DHS, referred to the ICT strategy. He informed the Committee that during the initial talks with SITA, the Department rejected a proposal by SITA as it would have been far too expensive for the Department. They were required by law to utilise SITA and no one else and had depended on them to bring the matter to finality. There were promising developments, however. The new acting CEO of SITA was assisting with the project and he was confident that the target would soon be achieved. The matter had also been escalated to ministerial level to ensure its finalisation.

Adv Masutha requested that the Department submit a full list of the outstanding ICT-related matters with SITA. The Committee would then hold the latter accountable, first in writing, or if time allowed, invite them to speak on these challenges as they affected not only this Department, but others with whom it worked to ensure the delivery of housing services.

Update: Acquisition of state-owned land

Mr Lucien Rakgoale, acting General Manager: Land Acquisitions and Management, Housing Development Agency (HDA), took the Committee through the presentation. In 2019, the Department of Public Works and Infrastructure (DPWI) released properties for human settlement development through a power of attorney (PoA). The properties were released based on requests received from various provinces and municipalities. The proposed developments were aligned with the principles of the National Development Plan (NDP) including: spatial justice, spatial efficiency, access to adequate accommodation and the provision of quality housing options. The land parcels were at various stages of planning by provinces, municipalities and the HDA.

The HDA had recently purchased three buildings in Cape Town, Kimberly, and Johannesburg to transform them into a combination of medium income housing options, including open market sectional title, social rental housing, and student accommodation. The HDA is currently in the process of finalising the technical feasibility studies, conceptual redevelopment plans, and financial modelling for the buildings. The Agency had further identified several state-owned inner-city buildings for release for the development of social housing and student accommodation. It would commence with the process of acquisition during the 2024/25 Medium Term Expenditure Framework (MTEF).

The presentation concluded with proposed interventions and recommendations for preventing illegal land invasion.

(See attached presentation for further details)

Discussion

Mr C Malematja (ANC) enquired about the ‘hotspot’ land in the Western Cape, and what could be done to ensure the development of this land with some sense of urgency. This also applied to other state land being invaded and taken over illegally.

Ms M Makesini (EFF) remarked that the Department had been dragging its feet on addressing the issues of apartheid spatial planning. Political will was needed to ensure that the issues were addressed. Was there any indication as to when the resolutions by councils of municipalities would be presented on pre-planning and township applications, so that the Committee could ensure that matters are dealt with according to the law? She asked for further details about the type of housing earmarked for the Coega area. Regarding the deeds of donation process that was done by the Department, there had been mention of waiting for a signature. Which signature was this and when did they expect to get it for the process to go ahead? She welcomed the consideration given by the Department to student accommodation and asked how far the processes were in other provinces other than Gauteng.

Mr A Tseki (ANC) asked if any private sector land had been expropriated for housing development.

Responses

Mr Bheki Khenisa, Chief Executive Officer, HDA, confirmed they had recently expropriated land from private landowners at Marikana near Rustenburg, where land parcels were required for human settlement development. There were others in the pipeline, and they would be able, at an opportune time, to report on them appropriately.

On issues in the Western Cape, the challenges with expediting some of these projects were in the main related to securing the required approvals, including issues relating to bulk services. There were a number of projects in the Western Cape whose implementation they were trying to expedite so that there was visible development on the ground. Regarding preventative measures against land invasion, the HDA usually used security service providers in instances where land parcels were susceptible or prone to invasions. This would include surveillance security services or permanent security where required. The Agency worked closely with municipalities in this regard.

On spatial transformation, the Agency had earmarked some parcels and properties owned by the state through the Department of Public Works and Infrastructure (DPWI) for development. Some of these were located in excellent areas which would ensure transformation from an economic point of view.

They continued to liaise with municipalities regarding council resolutions, and he was confident that these would be made and communicated soon.

The Coega development presented an opportunity for mixed-income housing because of the location of the land.

Regarding deeds of donation, some properties were located in deep rural areas, and the HDA was negotiating with the DPWI for them not to be donated and transferred to the HDA but for them to be transferred directly into the names of the respective municipalities.

Regarding the Cape Town land grabs, some people had invaded specific properties that were not suitable in the main for human settlement development. The HDA was conducting a detailed investigation to see if they could use the unoccupied portions for emergency housing. In Bloemfontein, there were inner city housing initiatives that did not necessarily centre around buildings, but also vacant land parcels that were allocated for human settlement development.

Further discussion

Adv Masutha enquired if private sector social schemes were still practised in relation to affordable accommodation in the inner city. He noted that municipalities had taken over some of these historic properties but there had been no upkeep, leading to degeneration and the general decay of inner cities. This needed to be turned around as it was not sustainable. He suggested government should look into how it could partner with communities to deal with these issues. Perhaps a budget line should be created, where some of the funding would subsidise renovations by individuals in these areas. These assets would then improve in value, as would the neighbourhoods and cities. The White Paper would present an opportunity for these and other ideas to be debated.

Responses

Ms Zenkosi Mhlongo, acting DDG: Research, Policy, Strategy and Planning, DHS, remarked that there were a lot of proposals that formed part of the policy positions in the White Paper that were being discussed with a range of stakeholders. She emphasised the issues raised by Adv Masutha about partnerships to ensure integration and sustainability, taking into account both the economic and even the aesthetic aspects of the country’s human settlements. She noted with appreciation the inputs received from the members.

Ms Pam Tshwete, Deputy Minister of Human Settlements, noted that the deadline for submissions on the White Paper had been extended to 15 March. She requested that Adv Masutha make a written submission to enrich the current draft. On land invasion, she commented that by-laws were there, but the challenges were around enforcement. The municipalities would need to be assisted with this issue.

The meeting was adjourned.