Repayments by key clients to National Housing Finance Cooperation: Monitoring Mechanisms & National Land Transport Transition Am
NCOP Public Services
30 August 2006
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Meeting report
PUBLIC SERVICES SELECT COMMITTEE
30 August 2006
NATIONAL HOUSING FINANCE CORPERATION: REPAYMENTS BY KEY CLIENTS: MONITORING
MECHANISMS AND NATIONAL LAND TRANSPORT TRANSITION AMENDMENT BILL [B 38D -
2005]: BRIEFING ON AMENDMENTS
Chairperson: Mr R Tau (ANC, Northern Cape)
Documents handed out
National Land
Transport Transition Act 22 of 2000
National Land
Transport Transition Amendment Bill [B 38B-2005]
National Land
Transport Transition Amendment Bill [B 38D - 2005]
National Housing
Corporation Mechanisms in place to monitor repayments
SUMMARY
The National Housing Finance Corporation reported on its history, its
mandate and its work. It highlighted the successes achieved and the challenges
it faced. Since inception it had approved R2.5 billion of loans and disbursed
R2.1 billion. It funded all social housing or rental developments and funded
intermediaries. NHFC looked closely at accreditation and credibility of the
institutions to ensure the success of a project, provided regular monitoring
and gave technical support and resources to rehabilitate institutions in
distress. Members raised questions on the poor conditions of some houses
provided and the methods employed by institutions. It was noted that it was
sometimes difficult to distinguish between the work of the Department of
Housing and the NHFC. Eviction orders and social housing were raised. The
committee was pleased about the positive interaction and looked forward to
further engagement with NHFC.
The Department of Transport briefed the Committee on further progress with the
National Land Transport Transition Amendment Bill. This Bill had originated in
the NCOP and the Portfolio Committee on Transport had made some amendments. It
was therefore referred back for consideration. The Department of Transport went
through the amendments. The main amendments related to definitions of 'midibus', 'minibus'and 'motor
car' to align them with the definitions in the Road Traffic Act. The reference
to municipalities acting on request by the MEC was deleted, as they would be
obliged to implement integrated transport plans. It was felt that rather than
specifying numbers of seats in vehicles in certain sections of the Amendment
Act, the Minister should issue a notice, which would allow for more
flexibility. The Portfolio Committee had recommended that a new Section 43(c)
be added to the principal Act, to prevent unlicensed operators from operating
illegally. The proposed section dealing with Tourist Services had now been
removed altogether, at the behest of industry stakeholders. Figures 1 and 2 of
the Act would be repealed. Members raised queries on the distinction between a
minibus and midibus, and why the definition of “association”
was limited to taxis. Delegates from KwaZulu Natal commented that many in that Province were
opposed to recapitalisation because of the removal of
clauses providing for different numbers of seats per vehicle. The Chairperson
announced that the Bill would now be referred to the provinces, who could accept or reject it, but could not make further
amendments
MINUTES
Presentation by National Housing Finance Corporation
Mr S Moraba (Chief
Executive Officer, National Housing Finance Corporation (NHFC)) indicated that
NHFC came into existence 10 years ago. Its initial mandate was to lend money to
institutions that would in turn lend to mid-income and lower income earners.
NHFC had then changed its model and decided to deliver a direct product to the end
user. Factors that influenced this decision included intermediaries that added
unreasonable mark ups and the refusal of banks to engage with ‘risky’ clients.
He confirmed that since inception, the NHFC had approved R 2.5 billion of loans
and disbursed R2.1 billion as at 31 March 2006. All social housing/rental
developments in the country had been financed by the NHFC. Furthermore, NHFC
had funded intermediaries in all the provinces except Northern Cape. This
anomaly would be rectified. The factors governing its disbursement were price,
location and the quality of houses. Particular attention was paid to the
accreditation and credibility of the institutions to ensure the success of a
project. NHFC provided regular monitoring to ensure that development was
ongoing, and to avert or correct deficiencies. Technical support and
appropriate resources were directed to rehabilitate institutions that were in
distress.
Discussion
Mr M Mzizi (IFP, Gauteng) requested more information about the Germiston City House Management (GCHM) and its activities
in Thoza and Khatlehong.
Mr S Moraba answered that the city was consolidating the housing
institutions and that GCHM had been had been selected as a key housing
development institution in that area. He supported the idea that key
institutions were identified to act as delivery agents for social housing in a
designated area.
Mr F Adams (ANC, Western Cape) alleged that the Cape
Town Housing Close Corporation and several other institutions in the area were
guilty of corruption, mismanagement and supplying a poor standard of work.
Ms Adrienne Egbers (Chief Financial Officer, NHFC)
elucidated that the cooperation would examine all houses and repair any
defects.
Ms H Matlanyane
(ANC, Limpopo) bemoaned the abject state of many
housing projects in Limpopo. She blamed authorities
for not exercising proper monitoring because the same institutions continued to
receive more funding.
Mr A Osman
(Acting Deputy Director-General, Department of Housing) voiced his sympathy and
confirmed that R100 million had been earmarked recently for projects in the
province. He promised that results would be more visible in the near future.
The Chairperson commented that it was difficult to distinguish between the work
of the Department of Housing and that of the NHFC and its intermediaries.
Mr S Moraba admitted that
it was difficult to make that distinction. He clarified that the NHFC‘s point of departure was to ensure that those who
received money had a sustainable income to effect repayments.
The Chairperson asked for examples of best and worst projects.
Mr S Moraba mentioned NHFC’s partnership with ABSA in transforming the
Brickfields area as a positive example that should be emulated. The Housing
Association of East London and Middelburg Housing
Associations projects also received positive mentions. The Housing Association Blaauberg had not been so successful.
Mr M Mzizi enquired whether
the NHFC executed eviction orders.
Mr S Moraba replied that
the intermediaries did pursue eviction orders, but that NHFC preferred to
exhaust every other available remedy before resorting to evictions.
Mr L Van Rooyen (ANC, Free
State) asked about the definition of social housing.
Mr A Osman said that this
was not quite certain. He opined that it was an expensive product with limited
application. He felt that it should be viewed as rental housing.
The Chairperson stated that his Committee was very pleased to have had this
meeting, which had been an eye-opener.
National Land Transition Amendment Bill [B38D-2005}
Introduction
The Chairperson explained that this was a Section 76
Bill that was first was first considered by the NCOP Select Committee on Public
Services. It was then referred to the
National Assembly’s Portfolio Committee on Transport for comment and proposed
amendments. Amendments had been made, and it was therefore now being returned
to the Select Committee for approval. The Department of Transport would outline
the changed made.
Briefing by Department of Transport
Mr J Patel, Acting Chief Director: Integrated Transport Planning, briefed the Committee and listed the various amendments made by the Portfolio Committee to the National Land Transport Transition Amendment Bill [B 38D - 2005] (“The Bill”). He was working from the D version .
Mr Patel summarized the changes as follows:
Clauses 1 (a); 3 (a), (b), (c); 4 (a); 7(d); Clause 24(a) and (b)
The words 'core city' was removed in these clauses because they had negative
connotations.
Clauses 1 (c), (d) and (e):
The definitions of 'midibus', 'minibus'and
'motor car' were amended to align them with the definitions in the Road Traffic
Act.
Clauses 6 (a) and (b); Clause 8 and Clause 25
The Portfolio Committee had recommended the removal of the references to 'MTAs' because these were derived from apartheid
legislation.
Clause 7 (d):
Apart from the consequential removal of the word 'core city', dealt with
earlier, the Portfolio Committee had also deleted the phrase 'requested by the
MEC'. The rationale was that municipalities no longer needed to be requested
but would be obliged to implement integrated transport plans.
Clause 15 (a):
The Portfolio Committee had recommended the removal of the whole phrase (a) to
(e), specifying the number of passengers carried. It was felt that these categories
should be added by the Minister by way of a notice instead of being included in
the Bill. This would avoid amending legislation every time new vehicle
capacities changed.
Clause 17:
The Portfolio Committee had recommended that a new Section 43(c) be added. Its
intention was to prevent unlicensed operators from operating illegally.
B Version of the Bill: Clause 20
Mr Patel pointed out that Clause 20 of the B-version
of the Bill had sought to include a new section dealing with Tourist Services.
This had now been removed altogether, so no reference to it appeared in the
D-version. This was deleted at the behest of industry stakeholders.
Clause 28:
The Portfolio Committee had recommended that the principal Act be amended
by the repeal of Figures 1 and 2.
Discussion
Mr M Mzizi (IFP, Gauteng) asked for a distinction between minibus and midibus.
Mr Patel used the definitions in the
Road Traffic Act to indicate that a 1 to 18 seater
vehicle was a minibus, one with 18 to 34 seats a minibus and one with more than
34 seats was regarded as a bus.
Ms M Mamase (ANC, Eastern Cape) enquired why the 2000
Act had still referred to core cities.
Mr Mokonyama (Acting
Director General, DOT) explained that this term was introduced in the Urban
Transport Act of 1967 and had not yet been repealed. DOT welcomed the fact that
it would finally be removed, as it would not affect the work of the
Department's work.
Mr A Watson (DA, Mpumalanga)
said that it seemed that the Portfolio Committee’s suggested amendments had
simply been accepted, although when similar amendments had been proposed by the
Select Committee they were not taken into consideration.
Mr Patel rejected this assertion and stated that the
DOT regarded both houses as equally important in respect of their oversight.
A special delegate from KwaZulu Natal commented that
many in that province were opposed to the recapitalisation
because of the removal of the clause that made provision for different numbers
of seats per vehicle.
Another KwaZulu Natal delegate expressed
dissatisfaction that the word “association” was limited in its definition, by
referring only to taxis. He pointed out that there were other associations that
were not catered for.
Mr Mokonyama replied that
the DOT had wished for a broader definition but that the definition was
confined because the meaning of association throughout the principal Act
referred to taxis.
Mr A van Rooyen requested
that the DOT must supply the Committee with a written report of all proposed
amendments and motivation. He was fully supported by the other Members.
Mr J Patel undertook that he would send through a report.
A KwaZulu Natal special delegate wanted to establish
whether members should take a positive or a negative message regarding the Bill
to their respective provinces.
The Chairperson said that each province had to make such a determination
independently.
The Chairperson clarified that the Bill must now be referred to the provinces, who would either accept of reject it, but could not make any
further amendments.
The meeting was adjourned.
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