Repayments by key clients to National Housing Finance Cooperation: Monitoring Mechanisms & National Land Transport Transition Am

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.