Metros: USDG reports, Beneficiary lists, Informal settlement upgrades, Land invasions; with Ministry

Meeting report

The Chairperson welcomed Members, Executive Mayors and Members of Mayoral Committees (MMCs), and proceeded with the consideration of the agenda. He requested adoption of the agenda, which included presentations from the Department of Human Settlements (DHS), and the Cities of Ekurhuleni (CoE), Johannesburg (CoJ), Cape Town (CoCT) and Tshwane (CoT).

Mr S Dithebe (ANC) moved the adoption of the agenda, and Mr K Sithole (IFP) seconded. The agenda was duly adopted.

Ms Kholiswa Pasiya-Mndende, Committee Secretary, noted apologies from Mr L Mphithi (DA) and Ms S Frenchman (NCC). She said the Deputy Minister, Ms Tandi Mahambehlala, had requested leave to be excused early from the meeting, and the Minister, Ms Thembi Simelane, had also requested leave to also be excused early to attend another meeting.

The Chairperson said the meeting formed part of the oversight role performed by the Committee, and had been convened to address issues involving expenditure, management of beneficiaries, and land invasions. He invited the Minister to present her opening remarks, followed by presentations from the various metros.

Minister's opening remarks

Minister Simelane began her remarks by stating that all of the metropolitans were struggling in some form or another. She had difficulty with Executive Mayors not availing themselves to the Minister or the projects initiated by the Department to assist them in their duties. She stressed the importance of these projects and jointly developing a way forward. She highlighted the Free State , Gauteng and the Western Cape as being the metros most affected. She said the Western Cape had written to the Department to share their dissatisfaction.

Regarding the cities' business plans, she said process dictated after the DHS performs its own assessment of them, they would submit them to National Treasury. Treasury would perform their own checks and assessment to reaffirm the business plan and figures. She said the Western Cape's assessment had since been approved, and the Department was engaging with it to see to the plan's implementation.

As part of the stop and reallocation strategy implemented by the Department, it had also visited the Free State and was working with the Mangaung Executive Mayor and MMC to resolve its issues. The chief financial officer (CFO) had also been assigned to work closely with the highlighted metros to resolve their respective issues.

She once again called for the metros to work together with the Department to help resolve their respective issues. She pleaded with the Executive Mayors and MMCs at the meeting to cooperate, and said the success of each metro would also be the success of the Department.

Dr Alec Moemi, Director-General, DHS, said the Department's presentation would be done in two parts. Ms Lucy Bele, CFO, would present on the financial performance of the municipalities, and Ms Sindisiwe Ngxongo, Deputy Director General (DDG): Entities, Oversight, IGR, Monitoring and Evaluation, would address the monitoring, evaluation and non-financial performance aspects.

DHS Briefing

Ms Bele said that when the DHS had met with the various metros, it had indicated that National Treasury had issued directives to stop providing a portion of the Urban Settlements Development Grant (USDG) and the Informal Settlements Upgrading Partnership Grant (ISUPG) to metros that were not performing, as of 31 December 2024.

This determination by National Treasury had been made according to the same yardstick used across provinces. The stopping or reallocation of funds was in line with section 18 of the Division of Revenue Act 24 of 2024.

While the process of stopping and/or reallocation was initiated by Treasury, the metros had been made aware of this plan. They metros were also invited to submit their proposals to National Treasury in response, and they had done so, expressing their dissatisfaction. The Department had issued letters to those which had spent less than 45% of their total budget, therefore stopping the grant/s previously received.

She gave an example of some of the metros where funds had been stopped or reallocated: 

• Nelson Mandela Bay - R67 476 000;
• Mangaung - R65 000 000;
• City of Ekurhuleni - R63 084 000;
• City of Johannesburg-R33 974 000; and
• City of Tshwane - R 70 000 000.

She said these funds were not taken from the USDG, but were reallocated to other metros who were sitting above the 45% spend mark. These included:

• Buffalo City, which received R90 000 0000;
• eThekwini, which received R159 534 000; and
• City of Cape Town, which received R30 000 000.

She highlighted the metros that were still underspending their respective budgets as of 28 February, even after the USDG cuts, indicating the percentage spent against the total available funds:

• City of Ekurhuleni - 47.7%;
• City of Johannesburg - 49.6%;
• City of Tshwane - 43.1%;
• City of Cape Town - 53.0%

She took the Members through the various cuts to the ISUPG, with the City of Johannesburg being the only one of the four metros which did not receive a ISUPG cut. The City of Ekurhuleni suffered a R55 622 000, and the City of Cape Town was cut by R30 594 000, but the City of Tshwane received an additional R90 000 000 in support of its ISUPG.

She said the Department was being as fair as possible in these allocations, looking at each metro's performance. This was done bearing in mind the metro's financial year ends in June of each year, but the Department's financial year ends in March. She said the Department looked at the six months' performance to assess performance.

Ms Bele concluded her presentation and gave the floor to Ms Ngxongo to proceed with the non-financial performance information.

Ms Ngxongo gave a high-level view of the presentation, stating that the purpose of the USDG was to supplement the capital revenues of metropolitan municipalities to implement infrastructure projects that promote equitable, integrated, productive, inclusive and sustainable urban development.

She highlighted the projects under implementation for each metro and the lack of performance, measuring performance against the planned annual targets. She raised concerns about prevailing issues of water and electricity across the metros.

Regarding job creation opportunities provided by the municipalities through the Expanded Public Works Programme (EPWP), each metro was listed below with the annual target set and the first and second quarter performance:

• Ekurhuleni: Annual target 12 250. First quarter output 3 384; second quarter output 6 752.
• Johannesburg: Annual target 16 000. First quarter output 6 500; second quarter output 1 775.
• Tshwane: Annual target 11 360. First quarter output 5 225; second quarter output N/A;
• Cape Town: Annual target 30 000. First quarter output 14 829; second quarter output 36 813.

Regarding the management of the beneficiary list for housing allocations, she said the Department had guidelines that metros had to follow. The Allocations Committee was responsible for the selection and allocation processes in terms of the legislative provisions and the allocations guidelines. She gave a brief overview of the different role players and their respective roles, from provincial Departments of Human Settlements, to the role of municipalities and the national DHS in the allocation process.

Ms Ngxongo highlighted that the role of the national Department included the verification of selected names of persons from the housing needs database drawn up by the Office of the Municipal Manager against the National Housing Needs Register/Demand Database. It also informs the Allocations Committee of the verification results to enable the committee to forward the list of verified names to the project manager.

She said there was no National Housing Register for the CoCT, but the Department was using the National Housing Needs Register, which was still a work in progress.

see attached for full presentation

Minister Simelane concluded the presentation by referring to the difficulties with the implementation of projects. This was why she had called on cities to prioritise engagement with the Department to assist in the implementation of blocked projects. It was important for metros to start and finish projects to ensure their beneficiaries benefited from these projects.

The Department was also looking at sewer allocations and the services the metros would be able to provide to people living in informal settlements. She made an example of a mobile ablution facility, and called for dignity to be brought to these communities.

She was also concerned about the lack of focus on eliminating squatter camps and formalising these settlements. Over the years, the focus seems to have been on trucking the ablution services and the like, not the elimination or eradication of squatter camps.

Lastly, she said there seemed to be an increase in requests from communities for serviced stands, with the proper streets and the necessary infrastructure. More and more people were requesting these to build homes for themselves. While some were unable to do this, it was vital for metros to allocate the land to people and build homes for them, rather than having them live in informal settlements. She said this was the agreed approach with Committee Members, and said this should be at the back of everyone’s mind.

The Chairperson expressed concern with the issue raised by the Minister regarding Executive Mayors who did not avail themselves for engagement with the Department. It was also concerning when they failed to attend Committee meetings. He appreciated the Executive Mayor of Ekurhuleni for availing himself and being present at the meeting. He advised the other metros to deliver the message to their Mayors on the importance of their attendance at these meetings. He said the call to these meetings had been a call from Parliament, and Departments and Members had been given notice weeks in advance to plan accordingly. He said Mayors should exercise their executive authority to ensure they attend these meetings.

He highlighted there were always issues being brought to Members from municipalities, and these issues would be addressed at these meetings. He gave an example of engagements the Committee had had with the MMC of Johannesburg about Slovo Park. It had also received complaints about Khutsong relating to sinkholes, and so on. These were issues that had been brought to the Committee that needed to be addressed. Executive Mayors had to take their rightful places in attending and prioritising Committee meetings to resolve these issues.

City of Ekurhuleni

Mr Nkosindiphile Xhakaza, Executive Mayor of Ekurhuleni, thanked the Chairperson for the opportunity and said the City welcomed engagement from the Committee and was open to direction from it on a way forward. 

He said the CoE was committed to devising responsive business plans and revised key performance indicators (KPIs). However, the City did have an issue with capacity. In response to some of the capacity issues, the metro had finalised the appointment of a Head of Department to better address capacity issues.

He mentioned problems with project planning and execution as other persisting issues the Department faced. He said it was committed to resolving this issue and addressing underspending through spending the allocated budget timeously.

He said the presentation would highlight the spending on water provision, specifically on reservoirs connecting mega human settlements such as Daggafontein, John Dube, and so on. While the City had added capacity in these areas, its impact was not adequately felt within human settlements.

Mr Kgopelo Hollo, MMC: Human Settlements, CoE, said the Department had been allocated R1.3 billion, having spent only 49.3% of the budget. He shared the USDG expenditure across departments, with human settlements alone spending 97% of its USDG . The Department had so far spent about two-thirds of its ISUPG budget of R787 million. He indicated how the funds were spent through the various departments.

He reported on the re-blocking of informal settlements that the Department had been able to achieve, varying from 100% to 99% in Msholozi, Madelakufa 2 and Umgababa, to mention a few. After re-blocking, the Department awaits approval from Eskom for electrification.

He said the Department had projects it was planning with an allocated budget to address various environmental challenges. He proceeded to take the Committee through the different sites and the allocated budget for water, sanitation and so on.

He shared the plans by the Department to curb land invasions. He said it was considering submitting an item for council consideration and approval to have a budget to curb the land invasion for housing projects or land earmarked for housing development. The City had a land invasion unit within the Ekurhuleni metropolitan police department which was dedicated to, amongst others, patrolling and policing areas earmarked for housing development as well as removing unlawful occupiers. Some of the challenges with this were the reallocation of occupants to alternate accommodation.

Cllr Hollo said the maintenance of the beneficiary records was done through the housing subsidy system (HSS) and the provision of reports for planning purposes. The allocation of beneficiaries was done by a joint allocation committee shared by officials in the City, and also involved Department officials. The Department strives to consult with all relevant stakeholders before it undertakes allocation administrative work, and also aims to keep the communities informed of progress.

Executive Mayor Xhakaza concluded the presentation by adding that the metro's informal settlements had increased from 119 in 2021, to 131 presently. Various mega projects had been announced, and while some were stalled, some were moving forward and the City was responsive to this increase.

See attached for full presentation.

City of Johannesburg

Mr Mlungisi Mabaso, MMC: Human Settlements, CoJ, introduced his delegation and said they would present on the grants, informal settlements, service stands and interventions by the City to curb land invasions.

He said the City had prioritised 181 informal settlements according to the challenges they faced. Joe Slovo informal settlement was one such settlement the City had prioritised. He said the Department would establish a standing committee which he would chair, and it would coordinate with other stakeholders to provide clear directives on development at Slovo Park. 

Mr Tyrin Naidoo, Group Head: Strategic Portfolio Management Office (SPMO), COJ, focused on the USDG part of the presentation, and said the Department’s strategy was focused on human settlements infrastructure, water and electricity. The CoJ was dedicated to creating inclusive, sustainable communities by directing USDG funds towards the development of integrated human settlements. This approach aimed to provide affordable housing options, promote social cohesion, and ensure residents had access to economic opportunities and essential services.

By strategically investing USDG funds in infrastructure and human settlements, the City aimed to stimulate local economic development, attract private investment, and enhance the municipal revenue base, thereby ensuring long-term financial sustainability.

Historically, the CoJ has performed well on USDG expenditures, except for 2016/17 and the 2019/20 financial year, which were significantly lower owing to the COVID-19 pandemic, when the National Treasury norm of 95% was not achieved.

The CoJ had a consolidated performance dashboard in place to monitor and report its grants performance monthly.

Mr Naidoo highlighted some of the challenges the Department faced in executing various projects. These included a lack of integrated, outcomes-based planning; limited strategic alignment of project selection, and an absence of standardised lifecycle plans across the portfolio.

He emphasised the First Home Finance (IAM) programme was the Council's commitment to full utilisation of grants. The IAM improvement programme, approved by Council in September 2024, sets out a five-year plan, with 29 transversal improvement initiatives, to drive proactive and sustainable infrastructure management. The Department had a combined 2024/25 spending performance of 58.5% on USDG, and was committed to targeted, intentional and purposeful spending.

Mr Oupa Nkoane, Executive Director: Local Government, CoJ, referred to the upgrading of various informal settlements in the City, and said the Department aimed to develop sustainable infrastructure and was also actively working on the reallocation process.

Cllr Mabaso concluded by sharing the challenges the City faced in one of the informal settlements, Kliptown. Firstly, finished units had been invaded, and secondly, the land identified for reallocating to the victims had also been invaded 

See attached for full presentation.

City of Cape Town

Mr Carl Pophaim, MMC: Human Settlements, CoCT, began by saying the City respects this Committee not only for its oversight, but also its guidance. He gave a high level overview of the lengthy presentation.

He said the City had been able to deliver about 52 667 housing opportunities and was focused on priority housing areas, with a waiting list of over 400 000 individuals. The City would meet this demand only in 80 years. The City was committed to bridging this gap through various initiatives, such as the housing allocation policy, which seeks to ensure apartheid spatial planning is addressed and allocations performed in a fair and transparent manner.

The City sought to adjust its approach to enable affordable housing through its housing programme. The City was finalising an affordable housing policy to enable and accelerate affordable social housing.

USDG expenditure was at 93% as at 31 March. The budget had been reprioritised in the adjustment budget by aligning funds to projects that were performing well. The same approach was taken with the ISUPG, which was at 96% expenditure as at 31 March.

The City had delivered 2 751 serviced sites and 1 854 top structures as part of its government-subsidised housing initiatives.

The City had taken measures to prevent unlawful land occupation. Some of these measures included:

• Joint Operations Committee (JOC) to deal with upcoming marches, events, protest actions posing security risks and threats, comprising interdepartmental and invited external stakeholders such as the provincial Human Settlements department and the South African National Roads Agency Ltd (SANRAL).
• Close working relationship with councillors, leadership and community structures, such as the SA National Civic Organisation (SANCO), neighbourhood watches, ward councillors and sub-councils. community development workers (CDWs) and street committees.
• Utilisation of technology, such as drone footage, "Eye in the Sky", and the Emergency Policing and Incident Command (EPIC).
• The City's law enforcement and metro police, the Special Investigating Unit (SIU) and SA Police Service's public order policing (POP) unit.
• Alert Safety and Security in advance of any volatile situation, and inform staff immediately of a dangerous situation in the area, such as gang violence, active protests, land invasions, etc.
• Patrols to monitor and prevent any unlawful land occupation within the prescripts of the law.

The City had an informal settlements upgrading pipeline to ensure alignment of conditions that must be met for upgrading to take place in a sustainable manner.

See attached for full presentation.

City of Tshwane

Mr Aaron Maluleka, MMC: Housing and Human Settlements, CoT, said the Department had taken to Council a policy to manage informal settlements. The CoT had 502 informal settlements and was presently spending over R300 million on them, which he said was unaffordable. He agreed with the Minister that Departments should focus on bulk infrastructure, namely sewerage, water and electricity. He highlighted how long it would take for upgrades and interventions to increase and develop serviced stands.

He said cross border issues presented a challenge to the Department in delivering serviced sites and formalising informal settlements, especially the borders of the North West. Another challenge was providing electricity and water for everyone, with the City losing more water that should be reaching its consumers. The City was looking at alternative sources for water and ablution facilities, and was working with Council for Scientific and Industrial Research (CSIR) in this regard.

He said there was no excuse for the underspending of grants, and the returning of grant funds constituted a defeat to poor communities.

Ms Nonto Memela, Group Head: Housing and Human Settlements, said she would not get into detail on some of the challenges the Department faced, but the slides provided a detailed overview. Some of these included a lack of investment in bulk infrastructure to respond to the city's growth and development needs. There were a myriad of urban challenges, such as immigration, urbanisation, and common developmental challenges.

She highlighted the CoT's ageing infrastructure as a further challenge which had led to leaks and massive losses. The infrastructure was further overburdened by a lack of investment in bulk infrastructure such as water and electricity.

In response to these challenges, the Department had implemented a range of programmes to resolve these issues. One such initiative was investment in improving the City's own sources of water to curb over reliance on other institutions, such as Rand Water. However, due to fiscal constraints, the Department still had water treatment plants which were not operating at their full capacity because of a backlog in maintenance and repairs. She said the backlog was estimated at R7.3 billion. The Department was heavily reliant on the DHS's grant funding. Part of the priorities of the City was the implementation of the revenue enhancement plant for increased funding. This would be used to address issues of water and electricity, amongst others.

Discussion

The Chairperson started the discussion by asking the Minister why the Department was giving money to entities that could not spend the money.

Mr C Poole (DA) began by agreeing with the Minister on the importance of serviced stands and issuing title deeds, affording people the dignity they deserve. He also expressed agreement with the Chairperson, asking why money was being given to metros who could not seem to spend that money to address prevailing issues.

He addressed Ekurhuleni, referring to its USDG expenditure, and asked what measures had been put in place to spend the rest of the budget in the first quarter. What measures had been put in place to address capacity issues at the project management level?

He said water and sanitation was a big project across various communities, yet spending was only at 26.1% to date. What was the reason for this underperformance?

While the CoE had acknowledged the challenges faced by housing liaison officers and managers, he said it had failed to addressing them through employing adequately qualified people. He asked what the set timeline was for training these employees and if training had already be done, when had it been provided?

With Tshwane having already spent R300 million on upgrading informal settlements, how many of the more than 500 informal settlements had been upgraded. How many serviced sites had been delivered and title deeds issued to date in the current year.

He asked the CoJ, with an expenditure of 60.6% at February, if this was in line with the targets set for the year. He asked for an explanation from Johannesburg on the overspending highlighted under Johannesburg Development Agency (JDA), and underspending in regard to Johannesburg Social Housing Company JOSHCO, stated as 4.60%

He said the Committee had taken note of the huge concern that it would take the City of Cape Town 80 years to address the housing backlog. While the City had made efforts to mobilise the private sector to try and address this backlog, he asked whether it had been successful in such an endeavour.

How many title deeds have been handed over to date, including the forced removal of communities from their original land? Was there a community where such a handover of title deeds had occurred or a project materialised to restore the dignity of people?

In the Khayelitsha housing project, the CoCT had recorded that 1 570 opportunities were forgone -- what was the reason for this loss?

Ms T Magagula (ANC) said while the Committee acknowledged that Ekurhuleni was still new in its caucus issues relating to its annual planning, the budgeting and allocation would have been handled by the relevant administration, while politicians would be at the forefront of implementation. She asked if the Department had administrative capacity, or if it was still looking for people who were qualified. She raised concern at the Mayor's reference to informal settlements increasing daily, with 110 informal settlement in 2011, and that number now sitting at 131. This meant there was no monitoring of land invasions in the City.

She also expressed concern with the budget spent versus amounts not being spent by the City, saying that this was a clear sign of a lack of implementation.

She asked for clarity on Kwa-Thema Hostel. The City had said they had adjusted the budget to R10 million to upgrade the bulk infrastructure of the hostel, and thus far, it had spent R 7.1 million. She asked what exactly this R7.1 million had been spent on. Ms Magagula shared a conversation she had had with the Chairperson on KwaThema Hostel on 16 December last year. The following day, the Committee had a meeting with Mr Siyabonga Zama, DDG: Informal Settlements Upgrading (ISU) and Emergency Housing, DHS, which he had convened. At this meeting, the Department had assured the Committee that repairs would follow the next day to address the hostel's infrastructure issues. To date, nothing had been done, and she asked what bulk infrastructure issues had in fact been addressed.

Regarding other informal settlements that were also meant to be upgraded, such as Gugulethu, she said it had been more than 30 years without redress and she still did not see it being mentioned by Cape Town, yet the city had a budget and money left unspent. Out of the R787 million, R486 million was not spent to date.

Regarding serviced stands, she asked how many of these had been provided to date. There was land identified 20 years ago, and to date nothing had been done about issuing people with serviced stands. She gave an example of the N17 project still not being implemented, and said the same could be said for the Vlakfontein project, yet these had been identified years ago.

She highlighted projects under Langaville extension 18.7 and extension 3 (KwaThema) that were other examples of unfinished projects. She asked when these projects would be budgeted for and implemented.

Mr K Sithole (IFP) began with the CoJ, asking about the allocation of USDG, which he said should be made directly to the metro to address its issues. He said the CoJ had a long history of informal settlements with very little effort towards upgrading them. He gave an example of an informal settlement in ward 65 , another next to Denver Hostel, and many more which were not being catered for. What were the MMC and the metro going to do to address these informal settlements?

He said he had been a councillor of Ekhuruleni in 2006, during which time a lot of progress was being made. He asked specific questions on various wards, asking the City for feedback on progress being made regarding ward 81(sewage issue), ward 46, Vosloorus (water issues), ward 52, Thokoza (plans to move or reallocate people); ward 90, Tembisa (increased crime in the informal settlement; and ward 74, Kwa-Thema.

What was the City doing to address the persisting issues faced by these informal settlements? Was the City well capacitated to address these issues? If not, he requested the CoE to seek capacity provincially and nationally.

What was the reason for the slow pace of the Madelakufa project, and where did progress currently stand?

He was concerned no action was being taken in upgrading informal settlements in Tshwane. The residents would be promised progress, but none would follow. He gave examples of ward 100 and ward 99, particularly the informal settlements near Mamelodi East.

He raised concern at the rise of land invasions in Tshwane, and asked what was causing the delay in adequately addressing these issues.

He said the Winterveldt area still had mud houses and persistent water issues, while the Department alleged a programme had been initiated. What was this programme, and what issues had it addressed? He gave another example of the hostel in Mamelodi West, and said there was no progress there -- why was this the case? Lastly he requested an update on Bloemspruit , as this provided the Department an opportunity to create multiple jobs -- how was the Department responding to this?.

Regarding the CoCT, he said while development occurred across the City. he saw very little progress in the upgrading of informal settlements. He made an example of informal settlements in and around Cape Town International Airport. He said that since 2010 there had been no improvements at these informal settlements specifically , and asked for feedback on this matter.

Lastly, he highlighted the construction mafia issue faced by all metros, and asked what strategies were in place to deal with this matter.

The Chairperson called on the Minister to address some issues before her early departure from the meeting. He said the Committee was not happy with efforts from the National Home Builders Registration Council (NHBRC) and the new time slot given for committee meetings. The Committee had requested a meeting with the NHBRC to address issues involving the Prevention of Illegal Eviction from and Unlawful Occupation of Land Act (PIE Act). The Committee was waiting for input from Members of Parliament on the PIE Act.

Minister's Response

Minister Simelane responded by explaining the process involved in the making of the beneficiary list, in collaboration with the State Information Technology Agency (SITA). She said the beneficiary list would be linked with a system in terms of section 10 of the Housing Policy on the sale of a home and the related condition for sale. The system would further track the sale to ensure the person who owned the house did not then rejoin the beneficiary list for reallocation to another home. She said the Department was looking at vulnerabilities in the system, and gave an example of 80-year-old male who had been waiting to be allocated a home. She said the Department was working on updating the system to ensure vulnerable groups were prioritised, including pensioners, child-headed households, people with disabilities, and so on.

She said these enhancements to the system would come with an easier distribution of title deeds. She conceded a lot of work still needed to be done, and the Department was sitting with over 3 000 title deeds for issuing. She highlighted some hindrances to this process, such as conveyancers, transfer costs and so on. She said it was unfortunate how government tended to tie its own hands in execution through various mechanisms. What was stalling the process was the transfer of houses, with state attorneys refusing to transfer any further homes, alleging the rate they were being paid was too low. The Department's argument was that they should not be paying for these transfers to the poor, and various other issues. The Department was seeking alternative dispute resolution options in this regard. Litigation tended to stall progress, so the Department's approach in dealing with municipalities and other stakeholders was alternative dispute resolution.

Regarding the Department's budget, the Minister urged Members to vote for the budget later that day. She said the Minister of Finance had gazetted the municipal trading services, addressing the issue of money being given to Departments and going unused. She stressed the Department had called for a strong focus on creating settlement and spending money on what created dignified human settlements. It was against the misuse of funds to address related issues of sewage and water, etc.

She pleaded for the Committee's understanding on budget issues and underspending. Previously, when there were budget cuts, funds would not be reallocated within Human Settlements but would be returned to the fiscus for use in other departments. However, this has since changed, and funds were reallocated within the DHS. With this in mind, the Department had made the decision to have the CFO, Director-General and technical teams visit all the metros and provinces and assess them in order to assist in better operations.

Reallocation within the Department was better than funds going back to the fiscus, as they could be used to assist in addressing departmental issues. She once again encouraged the metros to indicate to the DHS when help was required, and to make use of these trading services and reallocation of funds amongst the metros to spend, and spend appropriately.

Lastly, she addressed the hostel issues. The Department had different grants, and metros should complete projects before enrolling new projects. She hoped there would be implementation and progress on the various metros' business plans in the new financial year, and the Department would be in a position to report on the progress, and the Committee would be able to hold it accountable.

The Chairperson added that around May this year, there would be discussions on budgets for the various departments. A case should be made for Members of the Committee to agree to this budget so it could present it to National Treasury. The Department should ensure the funds were allocated accordingly, and the budget spent to address the problems faced by the respective metros.

The Chairperson thanked the Minister, and excused her from the meeting.

Further discussion

Mr T Gamede (MKP) addressed his questions to Ekhurleni, and said the presentation had highlighted the Department's underspending and project delays, as evidenced by the USDG and ISUPG expenditure reports. This raised concerns over the Department’s capacity to effectively plan, manage and execute projects. How could the City improve its project management and implementation processes to ensure more efficient and timely utilisation of grant funds? What systemic changes were necessary to prevent recurring underspending and service delivery?

He asked the CoJ, given the historical challenges with USDG expenditure, Covid-19 and other adverse challenges, how it was building more resilience into its project planning and execution processes to ensure they met the City’s expenditure targets, even in the face of unforeseen disruptions.

The presentation had illustrated the importance of an equitable and transparent housing allocation processes, considering the complexities involved in the beneficiary selection and the need to address historical backlogs. What innovative mechanisms or technologies could be implemented to further enhance transparency and public trust in the allocation of housing?

Addressing the CoCT, he asked how its allocation of the USDG reflected broader social economic priorities. Also, what alternative programmes could enhance equitable development across different communities? Given the challenges the City had highlighted in its project implementation, what strategic governance or policy shifts could improve accountability and efficiency in the use of parliamentary grants and other funding sources?

Referring to the CoT's identified challenges with engaging infrastructure maintenance backlogs and financial constraints, he asked how it could prioritise the sequence of infrastructure projects to maximise long term sustainability, all the while minimising disruptions to service delivery and considering the needs of different communities within the municipality, taking into account the rapid growth of informal settlements and the complexity in relocating or upgrading them. He asked what innovative, participatory and socially equitable strategies the CoT could employ to address housing backlogs, improve living conditions and integrate these settlements into the broader social fabric, while also mitigating the risk of land invasion and ensuring access to basic services.

Ms M Dlamini (EFF) began by stressing the need to guard against political instability, as the change in councils deeply affected service delivery. She called for integrity in service delivery to be upheld.

She referred to the construction mafias and extortionists, and expressed concern that MMCs were complicit in the construction mafia rings. She wanted to call on Members and the Department to be alert to the fact that these mafia and extortion rings operated within their midst, and with the help of municipal officials. She made an example of numerous cases currently in court where MMCs were alleged to be involved in numerous illegal activities. She suggested lifestyle audits should be conducted on all officials to further guard against this.

Addressed to the CoCT, she said Members needed to see and communities feel where money was being spent. She agreed with Members who raised concerns over the informal settlements near the airport being neglected. Members could not applaud changes they did not see. She gave an example of Acacia Park and nearby shacks that had been erected in the area, highlighting how nothing was being done in this regard to relocate people.

Regarding the CoE's capacity issues, she asked how many officials were in acting positions, and how vacancies the City currently had.

Referring to the digitising of the beneficiary list in Gauteng, she asked for further information on the digitalisation process and making the list public. She asked how the Department was going to address the issue of misallocations, where a beneficiary would be allocated a particular house but someone else would be found to be occupying it.

She asked the CoE which informal settlements could they identify as settlements they had upgraded100%.

Addressing Gauteng more generally, she asked how the metering system in hostels was operating. She also sought a progress update on the Winnie Mandela informal settlement in Tembisa, and details of the contractor that was working on this project.

She asked the CoJ how social housing issues were being managed. How was the City managing evictions, hijacked buildings and, more specifically, the occupation of hijacked buildings?

She recommended that the Committee should have a joint sitting with different departments, such as Water and Sanitation, Public Works and other stakeholders, such as Statistics South Africa, to address bulk infrastructure issues. She made an example of the CoCT, and refuted claims of there being no land for people to occupy.

She asked the CoT what engagements it had had with the North West Housing Cooperation. She wanted to know if there a demarcation issue in Gauteng.

Finally she highlighted the issue of under capacity in municipalities resulting in the overuse of consultants. She was concerned on the reliance of outsourced labour which did not yield fruitful results.

Mr Dithebe asked a general question of all metros. He said there were entities such as the Council for Scientific and Industrial Research (CSIR) to assist or guide in the upgrading of the housing subsidy system (HSS) and housing deeds register. He asked what progress had been made by the CSIR, the Department and SITA in upgrading these systems.

He recalled that when the Committee had performed one of its oversight visits in the Free State, one of the companies had undertaken the responsibility to provide trenches for terrestrial fibre. He said departments could not work in silos, and the DHS needed to ensure that fibre coverage was provided in rural areas. It was incredibly embarrassing for Members of Parliament to be in areas without the necessary internet coverage. He sympathised with locals living in these areas, and called for coverage challenges to be addressed.

He referred to the delay experienced by the CoT in the implementation of projects and its inability to respond to land invasion issues. He said the CSIR had developed the green book which assisted in various ways, such as predicting patterns of climate change, environmental protection and so on. The metros should be using this green book to assist in the implementation of projects. He made an example of the 384 informal settlements in the CoJ, and said the metro should be mapping and reviewing the future flood lines to adequately place people in safe environments.

He concluded by saying it appeared the CoCT was ideologically positioned to pursue gentrification and was mounting resistance in very subtle ways to ensure people in informal settlements were never attended to. This was further evidenced by the lack of spending. He said the City needed to understand they lived in one indivisible Republic, and asked the MMC to comment on this. 

Ms Z Abader (MKP) stressed the importance of the completed projects, and said that by the end of the five-year administration, Members and DHS officials should ensure nothing was left uncompleted.

She said the CoCT had recorded 426 000 people still waiting to be allocated homes, but argued this was not an accurate representation. She highlighted the 80-year backlog, and said there was in fact land in the City, and it only had to source the land. She stressed the dignity of people and the humanity aspect in human settlements. By the end of March, only 59% of the USDG and 46% of the ISUPG had been spent, with delays due to protests, internal capacity and so on. She asked why, after decades of democratic governance, the City still could not secure its housing project sites. How did it justify spending less than 60% of its USDG with such dire housing conditions? R240 million of this year's budget remained unassigned, yet people were being told there was no budget to address these issues.

She commended the CoE, and said 90% expenditure was commendable. She highlighted litigation as a waste of time and money in resolving issues.

Ms B Kegakilwe (ANC) asked the CoJ what the City was doing about the 27 projects it had highlighted as a concern, with currently zero spending.

The CoE indicated it had capacity challenges and appointed a head of department (HOD) in response to this. She asked whether the challenges had been addressed through this appointment. With regard to environmental resources and waste management, only 4.8% of the allocated budget had been spent. What challenges need to be addressed to improve waste management? She commended the City for its 97% human settlements expenditure. However, only 32% of the road and stormwater budget was spent -- was this indicative of a lack of infrastructural issues? It had spent only 7.6% of the allocated water and sanitation budget -- what were the challenges in addressing these issues and spending the allocated funds?

The CoCT had presented a waiting list of 426 000, with a maximum number of 4 949 homes it could build per annum. She said that while the City could not plan for the projected 80 years, it could plan for the five years it was in office. She recommended the City take the necessary measures to provide homes for people. They had said they were unable to meet demand due to a lack of funds, yet they sat with an unspent budget. She asked the City to use the funds it had to address housing shortages.

Most of the targets presented by the City were not achieved, so why it set targets they were unable to achieve? They had also indicated they had over 845 informal settlements -- what was the City planning on doing to address the increased number of settlements? What had led to this increase?

She asked the CoT, with its ageing infrastructure, why it had failed to spend funds to improve it. The City should make it a point to spend the allocated funds to meet the various challenges of infrastructure, water and sanitation, etc. The City had lamented over the challenges in its procurement process yet had failed to spend the available funds. The administrative and governance authority should make it a point to address these procurement issues for services to be provided to the people. Lastly, she asked how many serviced sites would be allocated to the "House Gold" development.

Responses

Ekurhuleni

Executive Mayor Xhakaza said the City did have an issue with funds, and this was impacting the implementation of projects. He also highlighted the construction mafia as another hindrance. He said the City was attempting to address this issue through engagement with the Presidential Infrastructure Coordinating Committee. The Department had launched a joint operation with the Minister of Police to deal with crime around the province, but unfortunately, they had yet to see action.

He said the Department was addressing the project management and procurement plan. Integrating these into the budget assisted in addressing this issue. In the last financial year, the Department had been able to spend almost 100% of the grants in addressing procurement issues, and was well on track to do the same in this financial year.

He said there were risks associated with spending, so the Department was cautious of malicious compliance. It was continuously ensuring that the amounts reported as spent were evidenced on the ground.

Regarding the specific projects referred to by Members, he said the Department had a partnering project which carried out upgrades to water and sanitation. He gave an example of a reservoir in ward 46 in Vosloorus which the City was fixing, and said it would be completed by 31 March.

Essellen Park was an example of another project which had stalled due to environmental issues, but the Department should be able to complete it soon. He provided context, and said with a change in mayorship there had been a regress in progress due to a change in approach. However, the City was committed to addressing these challenges and partnering with the provincial and national government to address these issues. 

He said the City was busy with an occupancy audit to ascertain numbers. There were 12 new informal settlements, although there could be more -- the audit would provide accurate numbers. The City was committed to resolving its capacity issues and finding space for the increased numbers.

He highlighted waste water treatment capacity as a concern, as the City had not built a plant to cater for growth. This was an area the City was looking to address with an estimated R7.5 to R8 billion to build a plant.

MMC Hollo said the issue of capacity was being addressed. The Department had appointed a new HOD, Dr Steven Ngubeni. This appointment would drastically improve matters and provide stability. Responding to questions on vacancies, he said the City was currently sitting with 51 vacancies.

Regarding the lack of spending and lack of bulk infrastructure when it came to hostels, he said there was a hostel development programme on which national government had placed a moratorium, advising the City it could not continue building units because they were not affordable for hostel dwellers. He said funds were now being utilised on the planning and redesigning of the hostels.

He addressed the question on how many informal settlements the Department had been upgraded100%, and said there were quite a few. He gave an example of Winnie Mandela, Ward 6.

He said Ekurhuleni was learning from CoCT, and building constructive roads within informal settlements.

He said the City was still in the process of repurposing the beneficiary list. The legal department had raised concerns around the Protection of Personal Information Act (POPIA), so there was still consultation to determine whether the list should be publicised or not.

He said the beneficiary administration was fully digitalised and was made easy by the HSS, where everyone could verify their details on the system.

Regarding the Winnie Mandela project in Tembisa Extension 25, he said the total amount required to complete the project was R97 million. The City would require additional funds for its completion.

Johannesburg

MMC Mabaso began by stating the City was at accreditation level two. He said they installed infrastructure and ran programmes to build infrastructure. The Department was working with the CoJ on all of its projects.

Regarding serviced stands, he said the Department had been able to deliver 701 on its greenfield project, which was one of two serviced stands projects. It was also exceeding its annual targets on the issuing of title deeds, but was having issues with the proclamation and conveyancing processes, as previously alluded to by the Minister.

Regarding the underspending of the USDG on George Goch informal settlement, he said the Department had encountered challenges where a power of attorney had not been issued by the property owner. However, the matter had been resolved and a new contractor was on site to start operations.

He said the Department had prioritised old informal settlements. The City had a council resolution of listing 802 informal settlements, and all the old informal settlements were incorporated in this council resolution. Regarding the George Goch informal settlement, he said the City had appointed a contractor for its upgrading, but the City had an overflow. It was therefore required to obtain an alternative site to relocate some of the beneficiaries in order to formalise the informal settlement. The City had faced a similar situation with the Denver informal settlement.

He stressed these were informal settlements within the inner city, and there were insufficient spaces for relocation. However, the Department had been able to acquire three properties, with one property donated by the Johannesburg Metropolitan Police Department (JMPD) to be used as alternative sites.

The greater Kliptown development had been stalled by invasions, but the Department was engaging with a developer called Southern Farms. The Department would then integrate the Kliptown development with the new Southern Farms development in Johannesburg to deal with the housing issues. The biggest challenge was the housing invasions, but the Department was working with the Hawks and the SAPS to address these issues, and was forging ahead.

The CoJ had not had many cases involving the construction mafia, but had dealt with them when they had attempted to extort their contractors.

Regarding the publication of the beneficiary list, he said the Department had been advised to protect the personal information of beneficiaries, and the matter was currently with the legal department. There were hindrances concerning confidentiality and the protection of information, as alluded to by Ekurhuleni.

Regarding the prioritisation of allocations, he said this was influenced by various issues such as court orders to allocate people to safer areas if they were in areas prone to flooding, or other adverse circumstances. He gave an example of region A, where Eskom had taken the City to court because people had settled under Eskom’s servitude. The Department had been compelled by the court to allocate people to other houses.

He said hostel residents were not paying for services due to the poor living conditions. These living conditions also made it difficult to bill meters because of the living arrangements, where different families shared one unit. It was a challenge to register a meter for one individual when no one person wanted to take accountability. He added that hostels in Johannesburg were in unproclaimed townships, and some properties were still zoned as farm portions and so forth—they were not yet established townships.

The Department had challenges with social housing management, which the Department was addressing through various interventions. It was also addressing hijacked buildings in Johannesburg, with the biggest challenge being the provision of alternative accommodation. The Department did not have alternative accommodation readily available, nor sufficient resources to acquire more properties to convert them to temporary emergency accommodation.

The Department was also evacuating people from buildings that had been condemned. It was currently working on two properties where it was planning to perform evacuations, and was in the process of identifying alternative accommodation and executing their order to save lives in situations of potential disaster.

The Department had encountered demarcation issues specifically with Buffalo City and Ekurhuleni. It was engaging with these municipalities to see how it could best provide services to residents.

Regarding the 27 projects with zero spending, he said they were unfunded due to the revised budgets.

Cape Town

MMC Pophaim addressed the comments made on the informal settlements near the airport, and said this was a long-standing issue involving various failures by different mayors. The situation today, particularly along the N2 gateway, was that there were more than 20 000 structures, with over 80% of them in category C informal settlements in flood plains with high water tables.

The CoCT had prioritised four of the existing informal settlements which were up for redevelopment -- about 10000 structures in the BM section, Taiwan, Thabo Mbeki East and West. Many other informal settlements were located on a landfill site. He stressed that whether he was the MMC, or someone else held the position, the prospects of R1 billion being allocated towards rehabilitating a landfill site were nil. In these circumstances, a mass relocation would be required, with viable land for development.

The construction mafia was a countrywide issue, and he highlighted provinces which had battled with this such as KZN and Gauteng. He said the CoCT had responded to this through:

• Blacklisting companies through due diligence measures from doing business with companies linked to the mafia;
• Firing those implicated, such as MMCs, directors, managers etc;
• Investigating forensically and charging those involved;
• Criminally charging city officials

 He said the construction mafia issue could not be addressed in isolation from the law enforcement agencies. He emphasised it was a SAPS core competency to protect people. The City had allocated a substantial budget towards law enforcement and private security where required. He conceded this could have been used towards human settlements, but the City was intentional in addressing the issue of the construction mafia through these means. Three projects -- in Gugulethu, Delft and Edward Avenue -- had been relaunched with contractors appointed and the necessary integrated security provided. The construction mafia issue was a transversal matter which required all counterparts to come to the table.

Regarding the City's allocation of the USDG, he said the current CoCT administration spends the most on bulk infrastructure in the entire country, which is focused on historically disadvantaged areas. He said R500 million was spent in Khayelitsa on bulk sewer infrastructure. He detested the assertions made that the City directed its USDG funds to advantaged areas. He said Mr Gamede had made an important point on how to increase governance efficiency with expenditure of the grant.

After this financial year, there would be an analysis of where there had been an underperformance, and whether this was linked to mismanagement. The result would lead to the necessary consequence management. The City was implementing transversal project management monitoring at a central level. The Executive Mayor had appointed two different platforms as oversight for catalytic projects to ensure milestones were in line with the business plans submitted to the provincial and national Department, where required.

Addressing Ms Dlamini, MMC Pophaim said he endorsed her recommendation on lifestyle audits on officials. The CoCT required lifestyle audits of every single MMC and committee member. Upon appointment, the MMC would have an audit undertaken, and the Executive Mayor had made it clear that if any questionable findings were found, the culprit would removed.

He extended an invitation to the Committee to go on a tour of the City to address some of the concerns on spending and upgrading of informal settlements, to see the investments made by the City. He said there had been extensive investment not only on basic services, but also the upgrading and blocking of informal settlements.

He said the City had a multi-party committee working on informal settlements, relying on each others' constituencies and expertise in order to mitigate risks.

Regarding Acacia Park, he agreed with Ms Dlamini on the matter. It was deplorable that within 100 meters of a national key point there were informal settlements. This informal settlement was located on Department of Public Works land for defence and military veterans, and the Passenger Rail Agency of SA (PRASA) on the opposite side. He stressed it was unfair that the City received the brunt of accountability, when other organs of state and other departments did not experience the same. Surely, a shared-dual approach should be taken to mitigate issues of land reform? He supported the call for engagement with other departments, such as Public Works, to further address housing issues. He made an example of land in the City allocated to the Department of Defence which was not utilised effectively.

He said gentrification was a consequence of investment in basic services, political stability, policy certainty, and the private sector investing in the City. However, there was no CoCT policy for gentrification. He outright rejected the view that the City made an effort through gentrification to remove people from historically exclusive places in the central business district (CBD). He said this administration had done more than most to release municipal-owned land in the CBD, Salt River, Woodstock and many other areas to ensure people of colour had access to historically white-owned land. However, without funding, this was a lost cause.

MMC Pophaim also rejected the view that the City spent less on informal settlements. He said 74% of the City's budget was spent on indigent communities through basic services and infrastructure delivery. The numbers were there for the Members to engage on.

He agreed with Mr Dithebe that more needed to be done, and agreed the previous administrations had done little to nothing to address these issues. This was why this was now a mayoral programme.

Regarding the USDG and ISUPG, he said the City had spent well on these grants in previous years, exceeding 97%. Regarding the 426 000 waiting list, he agreed this was not an adequate picture -- it did not include those who qualified and those who did not qualify. Further, the Reconstruction and Development Programme (RDP) did not work because of the growth in demand. He said the Department was certainly not able to plan for 80 years, but the approach to addressing housing issues needed to change. This would require denser human settlements, changing from title to tenure and rental, to mention a few issues.

Responding to questions on underspending, he said he was not particularly happy with the City's performance in the ISUPG space. He committed to a 97% spend on the USDG and 96% of the ISUPG. He believed the City's recovery plan was functional and that it would meet this target.

Lastly, he referred to the City's enabling programme for affordable housing -- specifically social housing. He said the CoCT had awarded 4 268 social housing units through City-owned land. A further 7 000 affordable housing units were built in the current term, 4 849 social and 1 824 GAP properties. Regarding restitution, through a tripartite alliance of the CoCT and the national Departments of Human Settlements and Public Works, a 30-year restitution issue had been unlocked in Bishops Court, which was one of the most highly valued estates in southern hemisphere. People who had been historically removed from that area had been provided with access to the land, with homes being developed and provided with a financial incentive.

The MMC provided another example in Richmond, where the City had coordinated a consortium where beneficiaries had elected not to have homes on their property, but rather to have a multi-million rand commercial investment in which they formed the majority shareholder and received dividends monthly. City-owned land had been provided for this purpose.

The Chairperson accepted the MMC’s invitation to the tour, and said the Committee would be there.

Ms Kegakilwe interjected, and said the MMC had been incredibly rude to Committee Members. She said his responses to questions made it seem as if Members had been asking stupid questions. She requested he adjust his tone and show due respect and respond accordingly. She made an example of the 80 years raised by the City, and said the concerns raised were valid -- this information had been taken from the presentation.

The Chairperson thanked Ms Kegakilwe, and said it was not necessary for the MMC to respond. He emphasised this Committee meant business and was committed to its oversight role. It also carried out its own research and analysed the presentations provided. He said the Committee would make the oversight visit to Cape Town.

Tshwane

MMC Maluleka said the City was committed to formalising informal settlements and issuing title deeds. The Department had land which it was using to develop 5 200 stands which would accommodate people of ward 99 and ward 100 in Mamelodi while the Department was dealing with the backlog. He invited the Committee to visit Tshwane to see the work the Department was doing in providing service stands.

He agreed with Ms Dlamini regarding political instability in mayoral appointments, and the need to bring stability into these transitions.

He acknowledged Mr Dithebe’s suggestion on the Green Book tool, saying the Department would look at this and other innovative tools.

Regarding the North West Housing Corporation questions, he said the Department wanted to acquire a power of attorney when dealing with historical issues on industrial parks, which were owing money to the CoT. He said this would assist in the formalisation and issuing of title deeds. While there had been progress at some industrial parks, the Department sought to invest in them and attract investors.

He said the City was investing about R500 million in the Winterveldt area to ensure people had water. A large part of the area was privately owned and while there were disputes concerning how the Department would expropriate land to compensate owners, the newly enacted Expropriation Act would guide the Department in this regard.

With the increase of informal settlements in the City, he said that during Covid many people had tken advantage of the Prevention of Illegal Evictions (PIE) Act, making it hard to evict people. 

Regarding performance and accountability he said there were generally recognised accounting practice (GRAP) standards that needed to be met. The Department was avoiding recording assets under construction where projects were not completed. The least the Department could do at this stage was to complete a small number of projects at a time, rather than having multiple projects left incomplete. The Department would focus on building its bulk infrastructure to provide serviced stands. He said Ms Memela would address questions on how many serviced stands the City had, and how many title deeds had been issued.

Ms Memela said over and above the reprioritisation of projects with funds being reallocated to projects that were performing with contractors on site, from those which were underperforming, the Department was also addressing the underperforming projects by providing the necessary capacity to ensure these were provided for in the new financial year. She added that contractors were also increasing their capacity to ensure more teams on the ground.

She said the Department did have an enterprise project management unit whose purpose was to monitor and provide oversight of projects as part of its turnaround strategy, and to catch up on plans per project to address underexpenditure.

Regarding serviced stands, she said the upgrading of informal settlements was an incremental process. Of the informal settlements that were already upgraded, 62 were fully upgraded with basic services such as water, sewerage and electricity, with over 100 000 beneficiaries, and over 82 000 informal settlements were also benefiting from some of these projects.

She said the City had reduced its title deeds backlog in the past two years from 15 000 to just under 7 000. In this financial year alone, the Department had already issued 1 800 title deeds, with a further 80% of title deeds registered by the province delivered to the City for issuing. Due to time constraints, she would respond to the questions on hostels in writing.

DHS

DG Moemi apologised for the late submission of the presentation by the Department. The Department agreed with Ms Dlamini on the issue of political instability affecting service delivery. Regarding the Department supporting municipalities, he said while the DHS accepted responsibility, it was paramount for metros to also do their job in supporting municipalities. Where officials were failing to do so, the Department would come in to assist.

In reviewing the budget, the Department had looked at the Construction Industry Index published by Statistics South Africa, that dealt with key drivers and cost systems, and looking at the costs of building a standard 40 square meter house, the Department was already over paying. The quantum was already above what was required.

Lastly, the Department had a housing fund with properties across the country. It had taken the decision ago to give these to the municipalities, but the municipalities did not want these properties because the people occupying these homes were not paying rent and service costs. The housing fund was therefore paying the city councils annually for rates and taxes for these buildings. It was not attractive for metros to take on these buildings, because they would not be making money. He said the Department had set a cut-off date, and if metros had not accepted its offer by then, it would evict those people and they would become the problem of the municipality in terms of how they would house them. The Department would evict them so that it had functional buildings available for repurposing for proper allocations.

The Chairperson asked when the cut-off date was, and the DG responded that it was 31 March 2025.

Closing remarks

The Chairperson thanked the Members, the various metros and their delegations, together with the national DHS, and said the Committee would visit the different metros to ensure services were delivered.

The meeting was adjourned