ATC130813: Report of the Portfolio Committee on Human Settlements on the oversight visit to the North West province, dated 24 October 2012

Human Settlements, Water and Sanitation

Report of the Portfolio Committee on Human Settlements on the oversight visit to the North West province, dated 24 October 2012

The Portfolio Committee on Human Settlements (the Committee), having conducted an oversight visit to the North West from 17 to 22 June 2012 in relation to the policy and legislative compliance and the implementation of the human settlements strategic plans, projects and programmes , reports as follows:

1. Background

In terms of the RSA Constitution of 1996 and Parliamentary Rules, the Committee has an obligation to conduct oversight over any executive organ of State that falls within its portfolio. In line with this mandate, the Strategic Plan of the Committee undertakes to conduct provincial visits to oversee the implementation of project plans and programmes. The Committee also undertakes to evaluate progress made and identify any challenges encountered in the implementation processes. Furthermore, the Committee seeks to promote and enhance co-operative governance and intergovernmental principles in the delivery of sustainable human settlements. In order to fulfil its strategic plan objectives the Committee conducted an oversight visit to the North West province from 17 to 22 June 2013. .

1.1 Objectives of the visit

The objectives of the oversight visit were to receive a briefing from the MEC and the provincial department responsible for human settlements on the following:

· Implementation of a comprehensive integrated human settlements strategy in the province;

· Performance in meeting service delivery targets set for 2011/12 and challenges encountered and ascertain whether there has been value for money;

· Plans, programmes and progress in the implementation of rural sanitation;

· Plans, programmes and service delivery targets for 2012/13;

· Progress report in support of the disaster affected communities;

· Blocked projects and plans to unblock them;

· Status on audit of poorly constructed houses and cost implications for rectification of such houses;

· The number of informal settlements, the plan and the progress in upgrading such settlements, including community residential units (CRUs);

· Progress in the implementation of the Farm Worker Assistance Programme;

· The co-ordination and management of the beneficiary list and incorporation of backyard dwellers to the provincial housing data base;

· Use of alternative technologies in construction of houses;

· The North West Housing Corporation closure;

· The role played by the private sector in service delivery.

2. Delegation

The multiparty delegation consisted of Ms BN Dambuza (ANC), Chairperson of the Committee and leader of the delegation; Ms JE Sosibo (ANC); Ms D Dlakude (ANC); Ms G Borman (ANC); Ms N Mnisi (ANC); Mr JM Matshoba (ANC); Ms P Duncan (DA); Mr S Mokgalapa (DA) ) and Mr KP Sithole (IFP).

2.1 Officials from the national Department of Human Settlements

The delegation was accompanied by Mr L Jolobe, Chief Director: Transformation; Ms M Pine, Office Manager: Transformation; Mr S Solomon, Deputy Director: Parliamentary Service and Stakeholder Liaison: Office of the Director-General; Ms N Yako, Assistant Director: Cabinet Cluster and Parliamentary Liaison: Office of the Director-General; Mr N Cele, Deputy Director: Project Implementation Support; Mr A Matshego, Deputy Director: Sector Information Management; Mr M Lelosa, Director; Mr R Kolokoto, Deputy Director; Mr T Madonsela; and Mr S Habib, Deputy Director.

2.2 Members of Provincial Legislature and officials as well as officials from the provincial Department of Human Settlements

The delegation was accompanied by the Chairperson of the Standing Committee, Mr H Mahlakeng; Ms TB Motshegare, Member of the Provincial Legislature, and Ms C Rens, Administrator: Standing Committee.

It was also accompanied by Mr T Mokhatla, Head of Department: Human Settlements; Mr N Mgengo, Chief Director: Human Settlements; Mr A Manuel, Manager: Strategic Planning and Ms E Mhlanga, Protocol Officer.

3. Summary of the purpose of the visit

Ms BN Dambuza, leader of delegation briefly explained the purpose of the oversight visit. She informed the meeting that the delegation was executing its constitutional mandate as guided by the Rules of Parliament and other legislative reforms to promote cooperative governance, and intra and inter-governmental relations. The visit was underpinned by the need to establish what legislative provisions served as obstacles to service delivery. Moreover, it sought to evaluate the progress made with regard to the attainment of Outcome 8 and whether, the delivery agreements with the Department of Cooperative Governance and Traditional Affairs and the Department of Water Affairs were implemented for the purpose of Outcome 8.

3.1 Executive summary of the oversight visit

The delegation visited the North West province from the 17 to 22June 2012. The visit covered all four-district municipalities namely: Dr Kenneth Kaunda; Dr Ruth Mompati; Dr Modiri Molema and Bojanala. The delegation met with MEC for Human Settlements and Public Safety, Mr NPD Maloyi. At the time of the oversight visit the province was experiencing service delivery protest. Some of the protests were due to incomplete and sinking houses due to lack of or poorly conducted geotechnical studies. Tranche payments were made by the province to various municipalities for building of houses; however municipalities also made tranche payments to contractors who served as implementing agents. Many of the contractors failed to build houses or disappeared subsequently upon receiving the tranche payments, which gave rise to blocked projects. The province reported that tranche payments were no longer being made. Conditional grant was used for rebuilding the old houses instead of building new houses (new old houses) and that impacted on targets being not met. The province undertook to have a clean audit by 2014, following the qualified audit for past financial years. There were areas that were still using the bucket system (informal settlements) and in other areas using Ventilated Pit Latrine (VIP) toilets. An amount of R57 million was allocated during 2012/13 financial year to cater for proper sanitation. The said amount was not used by the time of the visit (second quarter).

A service provider was appointed for the winding down process of the North West Housing Corporation (NWHC) and was working closely with the office of the Public Protector. The process was challenged by the absence of asset register for the corporation. The province was considering appointing a Commission of Enquiry to further investigate the past performance of the corporation. An amount of R11 million has been spent on the winding up process and the costs were expected to escalate.

4. Presentation by the provincial department at Hotel School in Mafikeng

4.1 Welcoming remarks by the Member of the Executive Council (MEC)

The delegation was welcomed by the MEC for Human Settlements and Public Liaison, Mr PDN Maloyi. The MEC assured the delegation that even though there were delivery protests spread all over the province the delegation was safe and secured. He also informed the delegation that he was only seven weeks in his new deployment. The Chairperson of the Standing Committee on Human Settlements was also seven days in the office. He informed the delegation that the department was faced with various challenges of service delivery protests. The department undertook to have a clean audit by 2014.

Most of the municipalities were still not providing relevant documents for audit purposes, thus resulted to qualified audit report for three consecutive financial years. In Potchefstroom and Swartruggens, houses were sinking due to dolomite. That was due to failure of municipalities to conduct proper geotechnical studies. Incomplete houses in most areas of the province were due to the failure of contractors, contactors disappearing with money and inferior workmanship. Some of the contractors’ contracts were terminated and appointed credible contractors. Some houses were allocated in 2002, but still not completed. The conditional grant was used for the rebuilding of old houses instead of building new houses. The MEC informed the delegation that the challenges of service delivery required a concerted collaborative effort from all stakeholders.

The MEC informed the delegation that the North West Housing Corporation was a great challenge that was delaying the delivery in the province. He further informed the delegation that the decision was taken to wind-down the corporation, but not all the necessary steps were taken into account. The Corporation was formed through the Provincial Act, which was not repealed and no documents were available. Properties that were bought by individual persons were never transferred to the owners and there were no title deeds issued. The report received indicated that one house was sold to more than three people by unregistered estate agents. It was alleged that an individual bought the whole township for R2 million of which proper documents were not found. The North West Housing Corporation had appointed unregistered and scrupulous company to sell houses for it and the money never reached the Corporation. In some instances an individual purchased two townships with one cheque.

4.2 Presentation by the Head of Department, Mr T Mokhatla

Mr Mokhatla informed the delegation that the department was in a process of developing sustainable Human Settlements but was relying on the cooperation of the municipalities to release land. The municipalities were also expected to deliver bulk serves; however, they would prioritise other issues not related to human settlements. He suggested that provincial departments should be mandated to electrify completed state subsidy houses and claim later from Eskom. The request was because beneficiaries were not able to occupy their houses as electricity was not yet installed and that led to vandalism of the units and or illegal occupations.

The province had planned to deliver 13 853 units for 2011/12 and the total delivery by March 2012 was at 16 333 with a variance of 2 480. During the 2010/11 financial year the department had under-spent by (12%) of its total Conditional Grant allocation. Subsequently a roll-over of R148, 810 million was requested. An amount of R100 million of the initial voted allocation was also transferred to Merafong Local Municipality due to cross bounder issues and this resulted in the grant being reduced. The housing disaster relief grant for rural intervention was R15 840 million, only 15% of the grant was spent.

An Expenditure Recovery Committee was established for 2011/12 financial year to monitor the conditional grant expenditure on weekly basis. After the department had noticed that it might not spend a turnaround master plan was developed to ensure the attainment of delivery targets and spending of the allocated budget. Based on the turnaround master plan the department achieved 100% of expenditure of conditional grant and rolled over funds.

Mr Mokhatla reported that in a MinMec meeting that was held the national Department of Human Settlements adopted a Macro Coordinated and Alignment Framework which seeks to foster cooperation and joint planning. The purpose of the framework was to promote and enhance the coordination of the sector departments and alignment of services such as bulk service provision, social amenities and other community across sectors.

The provincial department had enhanced its intergovernmental relations with delivery partners that were municipalities, contractors or developers. It had also signed implementation protocol with Social Housing Regulatory Authority (SHRA) and the National Housing Finance Corporation (NHFC) for rental stock. The development of provincial plans with a particular focus on the conditional grant business plan was based on a number of key aspects like the consideration of municipal Integrated Development Plans (IDPs) and the provincial Housing Chapters; integration of existing information initiatives and sustainable human settlements development and asset creation. The 2012/13 Departmental Conditional Grant Business Plan, Project List and Cash Flow projections were developed in full consultation with municipalities. The provincial department had planned to deliver 10 932 houses and rectify 1 285 units in 2012/13 financial year. The units include all the district municipalities.

The provincial department had conceptualised a North West Informal Settlement Upgrading Programme in 2007, with a view to eradicate informal settlements and establish a baseline of informal settlements in the province. The province had 140 informal settlements with 76 000 temporary structures. An Atlas informing the informal settlements upgrading was completed. An amount of R230 million was set aside to develop those areas (informal settlements).

The province reported that it was not doing well on the rental stock; however, it has signed an implementation protocol with SHRA. The affordable rental Housing Programme was one of the initiatives towards the eradication of housing backlog, providing rental housing opportunities for low income persons who cannot be accommodated in the formal private rental market. The department had a target of 20 000 units per annum over a four year period (contribution towards Outcome 8) and the two rental housing programmes have been introduced in the form of Community Residential Units and Social Housing. There were 100 community residential units that were under construction in the City of Tlokwe Local Municipality. Those units were scheduled for completion by July 2012.

The provincial department reported that state owned entities and state departments were known to own several pieces of land that were closer to urban centres and were underutilised. An implementation protocol was signed with delivery partner Housing Development Agency (HDA) and 259.67 hectares of land were purchased in Ventersdorp for R14 million. An amount of R25 million was set aside to purchase more land parcels.

Three municipalities were assessed for level 1 accreditation by the Compliance and Capacity Assessment Panel. However, the national Department of Human Settlements targeted to accredit one municipality, Rustenburg. With regard to the implementation of Finance Linked Individual Subsidy Programme (FLISP), the department reported that 124 beneficiaries have been approved and an amount of R23 461 million has been set aside for the programme. Implementation protocol has been signed with the National Housing Finance Corporation (NHFC).

The role of private sector partnership was crucial as it was enabling the provincial department to implement various housing programmes for various categories of beneficiaries. The provincial department has engaged the mining sector in the Province, i.e. Impala and Anglo mines through FLISP and over than 1 300 employees have benefited on the programme. Further engagements were being held with other mining houses such as HERNIC in Brits with the view to address challenges of De-Kroon informal settlement as part of informal settlement upgrading programme. Working relationship with National Housing Finance Corporation had been established for the implementation of the FLISP programme and an amount of R24 million has been committed to the programme for 2012/13. Impala committed to deliver 2 500 units and such a benefit would be extended to other qualifying beneficiaries such as public servants, etc.

Farm Worker Assistant programme has been implemented through the Department of Rural Development and Land Reform and an amount of R159 million has been committed. A portion of land has been acquired in the Ventersdorp area to provide suitable human settlements to some of the beneficiaries who come from the neighbouring farm area. The People’s Housing Process Programme was implemented in two projects Lethabong with 96 and Ditsobotla with 710 units. The people were beginning to establish housing cooperative and stockvels in an endeavour to create their own schemes. Jobs were created during the implementation of the programme as well as the skills were transferred.

The provincial department reported that there was no disaster fund allocated during the previous financial year. The provincial department was using the Human Settlements Development Grant (HSDG) to address the issues of disasters. In Mooinooi, Madibeng municipality feasibility studies were conducted for 500 units that were affected by disasters. In 2006, a contractor was appointed to build 1000 housing units for families who were victims of a natural disaster in Taung. It was reported that the contractor only built one (1) house and disappeared after receiving a tranche payment of R87 million. In Greater Taung Local municipality, contractors were appointed to build 263 units during 2010/11 financial year. The Special Investigations Unit (SIU) allegedly refused to furnish the provincial department with a progress report, because the Department is also subjected to the ongoing investigation. The provincial department reported that it received its Disaster Relief Funds very late in the 2011/12 financial year and could not spend their allocation, but have subsequently applied to have the funds rolled over for the 2012/13 financial year.

The number of blocked projects was not provided instead a number of reasons that contributed to projects being blocked were cited. The province reported that tranche payments were made to various municipalities for the building of houses, however, municipalities also made tranche payments to contractors who served as implementing agents. Many of the contractors disappeared subsequent upon receiving the tranche payments, which gave rise to blocked projects, irregular and unauthorized payments. The province however confirmed that the tranche payments practise has been stopped by the current MEC. In Kothlong municipality tranche payment was made to a contractor and a project was approved and later discovered that the land was not owned by the municipality and the project became blocked. The provincial department undertook to investigate extensively all the municipalities that failed to account for the money that was transferred to them. It also acknowledged that the process would be costly; nevertheless, it was hoping to get good results.

It was also stated that the rectification programme was the competency of the national department. The provincial department reported that conventional housing delivery method was used in most of the projects in the province. However, there were approximately 176 beneficiaries identified, who benefit from the use of innovative technology system. The contractor was already appointed and occupied site. It was reported that the establishment of the Housing Needs Register was underway. The system would be linked to the national department database and will in future inter-phase with the Department of Home Affairs. It would be allocated at municipalities with the server at the provincial department.

The provincial department stated that sanitation was a new mandate that was implemented by national department. The bucket system had been eradicated in most areas of the province. Nonetheless, the system was still being used in the informal settlements of Klerksdorp and the community of Popo Molefe Informal Settlement (in Madibeng Municipality) was compelled to use open defecation or share temporary toilets that were allocated. However, those temporary toilets were not emptied constantly. An undertaking was made by the national department to supply the Committee with a detailed report on the Rural Housing Infrastructure Programme. The delegation was disappointment to learn that the national department had assigned R57 million for 2012/13 financial year for the provision of sanitation in North West province, but failed to utilise such funds in the first quarter of the financial year. The national department was requested to provide a detailed report to the Committee on the state of sanitation in the province, including the expenditure plans of the R57 million allocated to address sanitation challenges in the province. The provincial department had committed itself to provide Jojo tanks in all new generation houses for water harvesting that can also be use for irrigation purposes (food security gardens).

4.3 Winding down of North West Housing Corporation (NWHC) - by Adv Mogale

Adv Mogale indicated that the process of winding down the North West Housing Corporation was initiated in 2009. The process was to be overseen by the provincial Department of Human Settlements. No due diligence report was conducted. The service provider was appointed and terms of reference were signed, and the service provider assumed its duties on the 15 th November 2010.

The service provider was expected to mainly compile an asset register, prepare financial statements and audits, close the corporation legally and financially manage the revenue of the institution. The service provider was expected to wind down the process within a period of a year. Adv Mogale indicated that, because there was no due diligence conducted, it was even more difficult because terms of reference that were set, were not enabling the service provider to achieve its mandate, and because the challenges were immense.

The service provider was a joint venture comprising of three categories: the financial, the legal and the technical sections. The technical section’s responsibility was to look for properties of the institution. They have used all means including conducting the desktop research, interacting with municipalities and communities. There were no records in the institution; the Department of Public Works was contacted to establish if they could have any records. Unfortunately, the information that was available was neither reliable nor authentic.

It was further indicated that the Board of Directors was dormant and the department has a duty to resuscitate the board, as it was the only accounting authority that could assist at the time. The employees who were with the corporation were transferred to different departments because the institution had financial problems. By the time of the visit, the technical section had collated 33 000 properties classified as old and new stocks and or vacant land. Old stocks were zero related houses and were built during the Bophuthatswana era.

Adv Mogale indicated that Cabinet took a resolution that the old stock houses should be handed over beneficiaries rather than selling to them. It was also found that other areas that were in the then Bophuthatswana, some beneficiaries had deed of grants. However, the deeds given to beneficiaries were not given as full title deed. Beneficiaries were given a perpetual possession as condition in the title deed. The executive committee and provincial department agreed that those deeds must be given a full status.

The financial section’s responsibility was to organise financial statements and oversee the audit process. This was done due to the finding that there were no authentic documents. As a result this posed a biggest challenge. It was also observed that there were no assets registers.

The third section was the legal section. The Department of Human Settlements did not know that there was an influx of litigation matters against the corporation. A repeal bill was drafted and taken to the state law advisory, but, unfortunately it could not be tabled before the legislature because it lacks full record of assets and liabilities as per requirement. It was then put aside for a while and concentrated on cases that were coming forth. The cases were similar and had high amounts of money that creditors were claiming against the corporation. The legal section came up with a strategy of how the cases could be dealt with, and one of the cases were a three storey building that an individual claimed that he had bought on auction. On the eve of the case being heard, the legal representative that the department had, told the department that they do not have a case. But, when the team looked in to the issue, it was discovered that the department had a strong case.

The case was continued and it was ruled in favour of the department. An amount of R22 million was saved from this outcome. That case was taken as a test for the department and could be used as a reference in other cases. The challenge was that the management did not adhere to regulatory frameworks; there was non-compliance of procedures and of awarding tenders.

The greatest challenge was that, the beneficiaries that were disgruntled because the problem has been persisting for many years. In other instances one property was sold to more than five people. The other challenge was that, all the people paid money to the corporation but the money could not be traced. All those people had complied with the requirements but they could not get tittles deeds or security tenure. There was also a challenge of bogus agents going around telling people that they were acting on behalf of the corporation.

An investigating team has been established with the South African Police Service (SAPS) and the Commercial Crimes Unit. A case had been opened against those bogus agents. One of them was arrested and the case was still sub judice. There was no township register. The other challenge was that houses have been allocated to certain individuals and some of them had passed on. Adv Mogale indicated that in such cases, houses were to be transferred to families and they were required to execute the Administration of the Estate.

The service provider went to the municipalities concerned and assisted with establishment of township register. Another challenge was that other townships fall under the jurisdiction of other provinces, while the stock in those provinces was registered under the provincial department. Gauteng came forth and assisted with the occupancy survey and that was really adding value to the service provider. When the service provider came on board, a moratorium was placed; stating that, none of the asset transfers to be effected until further notice, this resulted in a new challenge.

In the compilation of assets registry, approximately 63 000 properties were uncovered and had already been transferred. It was discovered that other properties were fraudulently transferred and there were no records to trace all those. There were law firms that had money in their trust accounts but the money could not be transferred to the corporation nor effecting transfers to beneficiaries. The provincial department had decided that the former board members should not be charged with fiduciary duties so that they could also assist in resolving those challenges.

Adv Mogale indicated that they were at a stage where they were not sure if the corporation was solvent or insolvent, because there was, no baseline and the assets could not be located. The office of the Public Protector was also assisting due to the influx of queries.

4.4 Deliberations by delegation

The delegation appreciated the sincerity and transparency by the MEC on the issues of service delivery challenges and further welcomed the extensive presentation by the HOD. The delegation enquired about the strategy to recover funds that were paid to contractors, as tranche payments. The delegation established whether there was a relationship between the provincial department and the National Home Builders Registration Council (NHBRC) in terms of quality assurance compliance. The winding-down of the NWHC was wearisome as it has taken too long to finalise. Therefore, the Commission of enquiry was most welcomed and persons responsible should account. Another concern was the issue of unspent funds (MIG) on bulk infrastructure by the municipalities. The delegation raised a concern on the fairly low expenditure of about 15 per cent on rural housing development yet the province is a rural set-up. The delegation sought clarity as to how many houses were due for rectification and the number of units rectified as from 2009/10 to 2011/12. The delegation enquired whether the housing needs register was aligned with the Housing Subsidy System in the national Department of Human Settlements. The delegation was concern about the lack of progress on Community Residential Units programme while there was budget allocated for the programme. The delegation enquired about the cost of the winding-down process of the NWHC and on which budget was the project funded from.

The delegation sought clarity on the number of families who were to benefit from the disaster programme as well as the number of units that were affected. The delegation ascertains the number of beneficiaries to benefit from the FLISP programme. The delegation requested the provincial department to furnish a detailed report on the performance of RHIP during the previous financial year. The Committee sought clarity on how many informal settlements have been upgraded on what form.

4.5 Responses by the provincial department

The provincial department reported that all projects were taken over from the municipalities, and it was only Moses Kotane that was not completely taken over. With regard to CRU, the provincial department reported that 100 units were under construction and would be finalised by July 2012. It was reported that due to lack of information from some municipality, the provincial department would take costly exercise to recover the tranche payment made. With regard to NWHC, the old stock was to be handed over to beneficiaries. The new stock will be sold to the occupancy. The power of attorney would be taken by the Premier and the houses would be registered on the deceased name and later transferred to their beneficiaries. The provincial department reported that quarterly meetings were held with NHBRC.

The funds for winding down the NWHC were sourced from the Department’s savings. The Auditor-General proposed that the Executive Committee (Exco) should fund the winding down of the Corporation.

5. Meeting in different districts and local municipalities

5. 1 Meeting at Dr Modiri Molema Council Chambers – Mafikeng municipality

The delegation was welcomed by the Chief Director, who later handed over to the Regional Manager to present the project profile of the Municipality. The delegation was later joined by the leadership of the Mafikeng municipality.

The Regional Director presented the profile of Ditsobotla project. He informed the delegation that the project had 48 units for people with special needs. The project was approved in 2008.

Ditsobotla People’s Housing Process project with 710 units and were allocated into four villages. The developer was challenged by dolomite risk as discovered by Geographical Information System (GIS) studies that were conducted. Ventilated Pit Latrine (VIP) toilets were provided in all rural villages.

Mafikeng Villages project with 1 000 units, started in 2011 and envisaged to be completed in October 2012. There were 381 units completed and an amount of R53 million was already been spent. The project was aimed at eradication of informal settlements in around the Rooigrond Correctional Services. The project was not enrolled with National Home Builders Registration Council (NHBRC) and internal bulk services were not applicable and VIP toilets were installed. The money for the project was transferred to Tlokwe Municipality and later transferred to the developer.

The delegation proposed that the municipality and the provincial department should brief the Committee on the tranche payment in Parliament. The date of the meeting was to be communicated.

5.2 Meeting at Dr Ruth Mompati District Council Chambers

The Chief Director presented human settlements projects in the district. It was indicated that there were approximately 106 villages in the area of Taung. The area has been identified as being prone to floods. The delegation was informed that in Vryburg Ext 25 in Naledi local municipality there was a project where 1 000 units were approved. Construction of the houses started in 2009, during the time, the municipality was an implementing agent. The project was supposed to start in December 2011 but delayed due to challenges in the appointment of service provider. The project was approved at a total amount of R56.2 million; expenditure was at R540 000 at the time of the visit and the balance of R55.7 million. There were no units completed by the time of the visit. It was reported that tranche payments were made by the province to the municipality. It was reported that 405 units were completed; however the audit revealed that they required rectification. Furthermore, those units were illegally occupied. It was further reported that the district area was challenged by the discovery of traces of dolomite after a borehole had been drilled near the area where development was to take place. The project had to stall until the study of the stern of the dolomite was complete.

In another village the contractor was supposed to construct 3000 units and R87 million was paid towards this project. It was indicated that when the province took over, a lot of work had to be done in resuscitating the project and that was to be done in phases. In the previous financial year the project was taken to the Special Investigating Unit (SIU) to try to recover whatever that has been paid to the contactor because of the shoddy workmanship. It was further stated that the province will have to take care of all the issues that were not taken care-off by the previous contractor including the Geographical Information System (GIS) studies. Then, there were 100 foundations reported to have been completed in that project.

The municipality was stricken by disasters in 2006/07 financial year. Various villages were affected. An emergency housing project was approved consisting of 2 000 units which forms was part of disaster project. The units were divided amongst four women contractors that were appointed. An amount of R87 million was allocated with the aim of responding to disasters. With regards to sanitation, Ventilated Pit Latrines were to be installed. Unfortunately, one contractor completed its units. Some had challenges varying from dolomite challenges and among others.

In greater Taung, Ba Ga Mothibi village, there were 21 subsidies approved and 18 units were reported to be completed by the time of the visit. This was called War on poverty project. It was reported that VIP toilets were to be installed.

In Pampierstad rectification, it was reported that the project was initiated in 2002, consisting of 900 units approved. The units were poorly constructed and an audit was conducted. The results revealed that out of 900 units, 578 units required rectification. It was reported that rectification was completed.

In Boitomelong Ext 5, it was reported that the project started in December 2011. There were 257 units that were approved. The project value was R14, 3 million and by the time of the visit, expenditure was at R7, 4 million.

The delegation requested a full report on the criteria used to screen the developers. It further established whether the provincial department was able to recoup monies from the constructors producing poor workmanship. Finally, the delegation agreed that the information presented was not convincing and either or in monetary value and units delivered. The delegation agreed that a proper report should be compiled and submitted to the Committee.

5.3 Meeting at the City of Matlosana local municipality

The Chief Director presented the project profiles. He reported that Jourberton 20 was a Breaking New Ground (BNG) project. The project was an informal settlements upgrading with 975 units. It was indicated that sites were serviced and there was water connections and access roads. Approximately, there were 130 units that have been approved. The project was allocated an amount of R9 million. Houses that were completed have been occupied. Bulk water and water reticulation was already in place. House specifications were 45m² two bedrooms, bath, toilet and a basin.

Jakaranda farm worker project was a project that was going to accommodate 64 families from the farms. An amount of R4, 5 million was allocated for the construction of 64 units and 63 beneficiaries were approved. It was reported that the Department of Rural Development and Land Reform purchased land for the beneficiaries. There was no bulk sewer and the provincial department opted for integrated VIP system. The houses were 45m², two bed-roomed houses with a kitchen. The project was constructed by a woman contractor.

Jourberton Ext 24 was a pilot project that was aimed to built 1 752 units, Khuma Ext 11 was aimed at building 316 units. It was reported that in Khuma Ext 11, there was a trace of dolomite; however the Council for Geoscience recommended that the construction should continue. In Kanana had 2 600 units to be constructed. It was reported that contractors were appointed.

Tlokwe Community Residential Units was reported to have 100 units which were aimed to be completed by July 2012.

The delegation was concerned about the number of units that were given to one contractor Toro ya Africa who seemed to fail to built and some houses showed poor workmanship. The developers in the province seemed to be administering everything i.e. beneficiary list management and construction of houses. The delegation requested the provincial department to furnish it with a full report clarifying reasons for the project to delay, the number of units to be constructed and the contractors appointed. The delegation was concerned about the non involvement of NHBRC at the initial stages of the projects. Furthermore, the delegation was concerned about the balance of R18 million in Jakaranda while houses were completed. It was proposed that 30% of work should be given to women and youth contractors. The delegation was concerned about the provision of VIP toilets to farm dwellers whereas the farm owners were utilising waterborne system and that was viewed as some kind of discrimination.

The Chief Director reported that the provincial department had a practice of giving the developer the function of beneficiary management as well as the allocation of houses but it was since stopped by the MEC. The provincial department later took a decision that it would manage the beneficiary list. That was due to the fact that the provincial department had trained staff to utilise the Housing Subsidy System. It was reported that there were no accredited municipalities to handle beneficiary list but they were tasked to deal with data capturing.

The Chief Director reported that in Khuma Ext 14, private geographical information system studies were utilised. It proposed that for units to sustain dolomite the units should have aprons and gutters to redirect rain water. It was reported that in Jakaranda the province was obliged to install VIP toilets as there was no bulk infrastructure.

The mayor reported the there was a housing backlog was at 31 000; 14 900 household in informal settlements; some of the areas in Klerksdorp were using bucket system and pit toilets; there were illegal settlements in private owned farm land, with no services at all and some with only on water tap installed.

The provincial department undertook to provide the study of all informal settlements that were upgraded and or receiving services.

The delegation recommended that the province should assist Matlosana in drafting an urgent a plan to access funding from RHIG to address sanitation and water challenges within the municipality.

5.4 Meeting at Bojanala District Municipality

The Acting mayor welcomed the delegation. He informed the delegation that the district was not yet accredited and local municipalities were developing agents. The regional director reported that there were five local municipalities in the district. He then presented seven projects that were Mazista 500; Mothutlung; Boitekong Ext 15; Serelang Ext 1; Redirile; Rasimone and Sunnyway.

5.4.1 Mazista 500, Kgetleng local muncipality

It was reported that Slate is mined at Mazista for roof tiling and other tiling purposes. Some of the mine workers travel each day from Swartruggens to the area whilst others live in old mining houses on the site or in old railway houses and shacks at the former Mazista railway station. These houses and shacks were generally in a bad condition. The owner of the slate mine, Mr. Roelof Brits, donated land for a new housing project for these contract workers. Water is obtained from communal taps while the people were using pit latrines as a means of sewage disposal. The project was approved in 2009 for the construction of 500 housing subsidy units. Toro Ya Africa Consultants was appointed as a turnkey developer. The project was located at Swartruggens to eradicated informal settlements in the area of Kgetleng local municipality. The proposed development has been constructed on Portion 29 of the farm Doornkom 418 JP, Mazista, North West Province. The farm is situated to the west of the R509 provincial road between Koster and Swartruggens. The development falls within the jurisdiction of the Kgetlengrivier Local Municipality and the Bojanala Platinum District. The size of the property measures 89.9805 ha.

5.4.2 Derby 129, Kgetlengrivier local municipality

The project was initially approved for 126 beneficiaries in October 2003. At the time of approval of the project the land was still in the ownership of Department of Public Works. The project was blocked while waiting for transfer process. The transfer process was finalised in November 2009 and in 2010 the project was resuscitated as a special women project. The project was approved in 2009 for the construction of 129 housing subsidy units. An Ikatiseng Property developer was appointed as a turnkey developer. Delay was experience in project preplanning. The project was completed in May 2012. This project forms part of the Women’s build initiative where women contractors were allocated projects to implement

5.4.3 Boitekong Ext 15, Rustenburg local municipality

The Department entered into an MoU with the National Housing Funding Corporation (NHFC) and Impala Platinum to implement the Finance Linked Individual Subsidy Programme (FLISP) in Boitekong Ex 15. The aim of the project was to deliver 1553 units in the area. The land was purchased by the mine from the municipality for residential purposes. Two types of houses were developed in the area. The description of the houses are 60 square meters at the price of R265 000.00 for three-bedroom houses and 50 square meters at a price of R225 000.00 for two-bedroom houses. The mine provides a R75 000 interest-free loan to its members and the rest of the money is financed through a loan from NHFC and the subsidy amount from FLISP. It was reported that the project was valued at R52 million.

5.4.4 Serelang Ext 1, Rustenburg local municipality

On 13 November 2008 Anglo American Platinum and the Department entered into memorandum of understanding to implement FLISP project in Seraleng. The sod turning for project launch was done in April 2009. The project was to construct 1 000 housing units. Phase one of infrastructure was completed by the last quarter of 2010. The infrastructure includes sewer, water, electricity and roads.

5.4.5 Mothutlung, Madibeng local municpality

The project was approved on 21 September 2005 for the installation of Internal Services and the construction of 1000 housing units at Mothutlung Ext 2, within the jurisdiction of the Madibeng Local Municipality. Two show houses were built and during the construction phase the Council was notified that there were no bulk services in the area and MIG funding was applied for and approved. Proconse Consulting Engineers were contracted by Madibeng Local Municipality in 2011 as Project Managers for the installation of bulk services. The engineers have struggled to complete installation of bulk services up to now. Tranche payments were made to the Municipality for the installation of internal water and sewer connections. The contract was subsequently ceded to Homes 2000 (Pty) Ltd by the Municipality. The construction of top structure has started but cannot be completed due to the unavailability of bulk services. The developer has completed the internal services and awaiting bulk for internal connections. Presently the project has registered 927 wall-plates. The wall plates are waiting for completion. The developer cannot complete the houses because beneficiaries cannot move into the houses without ablution facilities, which will create a health hazard. The completion of these houses may also lead to illegal occupation of these houses whilst awaiting completion of bulk services installation.

5.4.6 Rasimone, Rustenburg local municipality

The Department entered into agreement with Tawana Business Projects to construct 50 units in the village of Rasimone. After finalization of a contract with the developer, the project was delayed while the subsidy administration and geotechnical investigation was concluded. In February 2011, the developer was instructed to establish the site plan and start construction of housing units. The project formed part of the women’s build initiative where women contractors were allocated projects to implement. The project was reported as complete. This project participated in the Provincial Govan Mbeki awards in the category of best women contractor projects and won. The project also participated in the national Govan Mbeki Human Settlements awards and won in the category of best woman contractor.

5.4.7 Sunnyway, Madibeng local municipality

The Department and Madibeng Local Municipality entered into an agreement with Sunset Bay Trading 441 for the construction of 1000 housing units and services at Sunnyway Village within the Madibeng Local Municipality. This project is under construction and the developer was finalizing the installation of services and the construction of top structure was anticipated to commence during the second quarter of the 2012/13 financial year.

The construction of proper road infrastructure was also in progress, in order to allow for easy access of public transport to the area and a much higher standard of service to the beneficiaries of this development. The project by its nature is an integrated rural development and will enhance the normal living of people as it would also accommodate different categories of the community and facilities such open parks, sports, picnic facilities and a sustainable fresh produce garden and market might be considered at a later stage. That would strongly contribute towards the Comprehensive Plan for the establishment of Integrated Human Settlements by Government.

5.4.8 Delegation concerns, comments and questions for clarity

The delegation was concerned about the omission of Moses Kotane projects in the presentation yet a request was made to report on all projects undertaken at the municipality. A Member of Parliament deployed in Bojanala district municipality informed the meeting that there was a project consisting of 4 000 units was left unfinished; in Serelang 460 were illegal occupied; houses built under the power line; the communities were complaining that loan houses were not belonging to human settlements but to the mines. She was surprised that Moses Kotane challenges were not mentioned and appealed to the delegation of the Portfolio Committee on Human Settlements to consider revisiting the housing delivery matters in the district.

The delegation requested the district to provide it with the number of informal settlements and plans to upgrade such settlements and budget allocation; programmes and plans in place for rectification programme and the number of housing backlog. The delegation was concerned about the report on Madibeng local municipality on its bulk infrastructure delays whereas there was money for sanitation (RHIG) which had not been used by the province. It was concerned about the beneficiary management as corruption was rife. The delegation enquired when was the municipality going to purchase honey sucker trucks as it seemed that then the number was low. The delegation observed that the relationship between the province and the NHBRC seemed to be boardroom based as it was not visible on the ground. A concern was raised on under expenditure on MIG while the district had challenges of bulk infrastructure.

5.4.9 Responses

The regional director informed the delegation that the district was struggling to get beneficiaries for FLISP projects and only 65 applications received; only 49 of the applicants were approved due to stringent conditions. It was further reported that mines would continue to build houses and allocated people who qualifies to access loans. The district reported that Moreteng project which was build under power line became blocked while was on wall plate and was vandalised. It was reported that it was under resuscitation and the service provider was appointed. The township registration was approved and planned to be finalised by March 2013. On illegal occupation, it was reported that it was a huge challenge as people would go as far as swapping the stands. The eviction process was started and could not get the court order on three occasions. The district was also concerned that it should provide alternative accommodation for the evicted people.

It was reported that the municipality do not own the electricity licence in Mothutlung. In Mazista it was reported that the developer was lobbying for funding, unfortunately the municipality could not agree with the technology. With regards to land issues, it was reported that the study conducted revealed that only 4% of land was owned by the Rustenburg municipality. It was reported that housing units backlog was at 58 000.

The district municipality was concerned that the department of minerals energy was issuing mineral rights to the mines without consultation. The district reported that it had 68 informal settlements consisting of 54 392 shacks. In Rustenburg, it was reported that there were 13 informal settlements consisting of 34 846 informal dwelling. In Madibeng, there were 31, with 15 022 shacks. It was reported that there was a need of three honey sucker trucks for the municipality. It was reported that in the upgrading of informal settlement both the in-situ and relocation were used. The district reported that it had no knowledge of the bucket system.

The delegation noted that district was unable to respond on issue of bucket system. The delegation stated that a Member of Parliament has a Constitutional mandate to execute an oversight on any executive authority on issues pertaining service delivery. Therefore it was recommended that a meeting be convened between a deployed Member of Parliament within Bojanala constituency area, especially Moses Kotane and the province to deliberate on human settlements issues and report outcomes to the Committee within three months.

6. Projects visited by the delegation

6.1 Site visit to Rooigrond informal settlement

The delegation was informed that the settlement was established in 2007. A large number of the Rooigrond community consists of farm workers that were evicted from the farms around the area. The community experience service delivery challenges such as lack or poor basic services, housing, water, sanitation, health services and access to economic opportunities. A decision was taken by the municipality to move the residents 500m away from the correctional services. One of the reasons for moving them was to prevent the smuggling of drugs to the prisoners. The community urged the delegation to assist in reinstating the services such as mobile clinic, internal roads for easy access by ambulance, police, disaster management services and also other services outlined in the indigent policy such as burial of indigent members of the community. The municipality informed the delegation that basic services were provided in the area closer to the correctional facility where the community was requested to move to. The provincial department indicated that the funds were made available for the construction of 1000 units for the Rooigrond informal settlements. However, the funds were moved to another project as the municipality was waiting for Councils’ resolution on the final decision about the settlement.

The delegation resolved that the municipality should communicate with the community and consider their concerns. The municipality should review the decision of moving the community away from the correctional services, as that was unnecessary. It was also resolved that basic services should be provided and VIP toilets should be installed. The municipality undertook to meet the community and discuss the way forward.

6.2 Site visit to Ditsobotla special houses for people with disabilities

The project started in 2008, as the Premier’s initiative to assist people with disabilities who were attending school in the vicinity to be accommodated and to use houses as hostel. The project had 48 units and those houses were 49 m², two bed-roomed, bathroom and open kitchen. The project was enrolled with NHBRC. The terms of the project was that the houses should be transferred to beneficiaries and issued with title deeds. The municipality stated that there was a process in place for transferring the houses to beneficiaries. The old structures that people were previously residing in belonged to the Department of Public Works. Those structures were dilapidated.

Local people were employed as subcontractors for building and painting. The contractor informed the delegation that it had applied for top-up funding to install gutters for water redirecting. The houses were well constructed.

The delegation observed that the houses were not user-friendly as there were no hand rails in the bathrooms and there were baths instead of showers. There were no sinks in the kitchen. Electricity was not yet connected. The beneficiary stated that it was difficult for her to use a bath and she would prefer a shower but they were not consulted. The delegation emphasised that hand rails, shower instead of a bath, sink in the kitchen should be installed. Furthermore, that an apron should be broadening to accommodate wheel chairs beneficiaries.

6.3 Site visit to Ditsobotla People’s Housing Process (PHP) pilot project

A developer was appointed to build houses for the beneficiaries (that is called managed PHP). The municipality was monitoring the construction and was paying the contractor based on the report received from its inspectors. The project was enrolled with the National Home Builders Registration Council. There was electricity in the village, but no water even though water reticulation was done. The water from the boreholes was not enough for the village. There were 31 units that were constructed and there were in different stages i.e. foundation, wall plate and some on roof stage. The communities were using Ventilated Improved Pit (VIP) toilets. The delegation was informed that an amount of R3 million was set aside to resolve water shortages in the village. There were no baths or sinks installed in all PHP houses. It was alleged that houses that were in municipal land had basic services installed but those in tribal land were not provided with such services.

The Community Development Worker informed the delegation that the VIP toilets were installed in 1998 and were not maintained. Sanitation issue was a challenge. The district normally emptied the toilets but the challenge was with disposal and not knowing what to do with it. It was alleged that there was no proper social facilitation. The community was never given a chance to contribute in building of their houses. People that were working in the project were not registered and were victimised, not paid on time.

The delegation was not happy that kitchen sinks, bathrooms and toilets were not provided.

6.4 Site visit to Dihatswane village

Dihatswane is one of the six villages that have been identified for housing developments in the area. A total number of 145 units were planned. It was indicated that the municipality had planned the units to be 150 and they were reduced to 145. The contractor, Mosegedi and Associates built 135 and the construction started in 2011. It was further indicated that progress on construction was dependent on the approved beneficiaries. The municipality indicated that they traced the beneficiaries according to the location. There were people who were in a wrong side of the village and there's a dispute between the Tribal Authorities and the municipality; that was why houses could not be build in such areas. The challenge was that on the application people write an address only to find that they live on the other side of the village, hence the disputes with the Tribal Authorities.


The delegation raised a concern that there was a perception that houses that were built for people living in the villages should be substandard and this should not be the case, houses must be of the same quality. It was enquired whether the National Home Builders Registration Council was assisting with the issues of quality.


The Councillor indicated that there were more than 300 people who needed houses; however, a decision was taken that 1000 will no longer be allocated to Rooigrond because of the disputes in the area. In Schoongesigt only 45 beneficiaries would benefit, others were told that the area was dolomatic but there was no geotechnical study report to attest to that. She further indicated that people were promised that the municipality will come to verify if they were on the list or not; out of those, there were nine beneficiaries’ people on the tribal land. The provincial department had indicated that there was a memorandum of understanding that people should benefit.


The Ward Councillor informed the delegation that houses that were built were not the ones that they were promised. She alleged that the Integrated Development Plans (IDPs) were not taken into account when developments were taking place.

The delegation through interaction with community members, observed that there were people who had been residing in Schoongesigt for the period more than 20 years. However, the provincial department did not considered nor provide those communities with houses and that was totally unacceptable. The delegation stated that the Rooigrond project should continue, as the budget was already made available. It was concerned that the communities were not consulted about the issues that concern them.


6.5 Site visit Moshawane in Signal Hill


The Regional Manager stated that the project was a rural project. There were 72 units completed out of 300 units that were initially approved. The houses were two bed-roomed houses, reported to be poorly constructed, and would require rectification. There were no internal doors and the delegation requested that doors should be installed. There was a need to register beneficiaries in the area of Moshawane. Water was raised as critical and scarce resource in the area.

A community member complained that there was no school, no clinic and there was no water and no electricity. She alleged that unscrupulous people sold houses while others were not getting them.

The delegation urged the municipality to assist communities with water as it is a basic constitutional right.

6.6 Site visit to Setlopo disaster area

The Dithakong disaster of 2006 had affected 130 housing units. By the time of the visit only 40 units were completed and 90 units were to be completed by end of September 2012. The village had communal taps, electricity and outside VIP toilets.


The chief in the area informed the delegation that water was still a challenge as the area was experiencing water scarcity; in other houses people were digging their own boreholes. The Municipal Manager told the delegation that there should be a review of legislation, as most of the powers and functions between local and the district municipality, rest with the district. The grants were received by the district and most decisions were taken by the district on how the grant should be spent without consulting the local municipality.

6.7 Site visit to Pampierstad

The project was part of the cross boarder project between Northern Cape and North West. The project started in 2002 with 900 units. After the demarcation, the area was handed over to Northern Cape. Records reflect that 578 houses in Pampierstad were being subjected to rectifications due to shoddy workmanship. In the same housing project in Pampierstad, it was evident that contractors were contravening norms and standards e.g. there were no aprons on the outside walls and the inside walls were merely backwashed and not plastered. It was evident that the provincial department therefore runs the risk of conducting rectifications upon rectifications if the matter was not attended.

The delegation supported that the funding formula should be reviewed and thereby ensuring that funds for the Rectification Programme are separated from the Human Settlements Development Grant. The province made a commitment to furnish the Committee with a separate report on this matter.


6.8 Site visit to Synchrocom

The delegation visited Synchrocom where 257 housing units were constructed. The delegation was concerned about the reporting that was not clear and lacked specific issues e.g. foundations done and structures completed. Clarity was sought on what happens when a contractor leaves the site without completing the units and also what happened to the retention fees. A concern was raised on why R87 million was transferred to that particular contractor because that could open doors for corruption. It was further indicated that payment system of the municipality was not up to standard. It was alleged that rules of the Public Finance Management Act (PFMA), No 1 of 1999, were flouted, and the system needed to be tightened to avoid corruption.


In response, the municipality informed the delegation that upon receipt of the funds they immediately transfer them to contractors without having conducted a proper study on the progress of the project. However, the SIU have been investigating the issue, and the reports were still outstanding. The delegation was requested to intervene in the matter. The Mayor indicated that Naledi municipality was going to locate people who occupied incomplete houses. It was further indicated that there was a house that was built for R8 million and there was no proper briefings as to what was the progress on the Special Investigating Unit (SIU) investigations in respect of the house. It was further indicated that there was no coordination in the running of projects, the national Department of Human Settlements does its own programme, another Department will also come with its own programme, and the information received was disjointed.

6.9 Visit on the War on poverty project

The housing units were called new generations. There were 18 out of the 21 units completed with VIP toilets installed and water was available. The toilet was designed in such a way that when it was full they can dig a pit next to the full one, move the top structure, and cover the new pit. Another one is to provide the chemicals that will help to decompose the solid waste. Eskom was also called in to provide electricity.

The delegation enquired as to which process was followed in identifying beneficiaries. It was further enquired whether the province does the screening of beneficiaries. It was indicated that the municipality identifies the beneficiaries that are needy.

The municipality indicated that out of 21 beneficiaries that were initially approved it was later discovered that three beneficiaries did not qualify. It was further indicated that the initiative was a joint venture between local and provincial governments. However, three beneficiaries failed because they might have benefited in the past.

The delegation indicated that when a beneficiary could not be located, the municipality should be advertised in the local media such as community radio station as well as in the print media until they were located. The delegation was concerned about the size of houses build by the province (45 m²) and sought clarity on how the province was managing it.

The delegation reported that people always complain that they have been taken out of the beneficiary list without them being informed. However it was requested that when taking them out, they should be duly informed.

The delegation was impressed with the quality of the house. However, there was no toilet or a water sink inside the house.

6.10 Site visit to Matsheng project

The project was declared a project of war on poverty and was an initiative by the Deputy President, Kgalema Montlante. The project consisted of 50 approved units and was still in the process of completion in Matsheng.

6.11 Site visit to Vryburg


It was indicated that initially the project was supposed to deliver 3 000 units. It was stated that 87 units were poorly constructed. There were 405 units that were illegally occupied and unfortunately those units had defects that required rectification. It was also reported that NHBRC was involved in the quality assurance determination, therefore the delegation instructed the national department to make a follow-up on the issue and NHBRC should be liable for the rectification cost. People were supposed to be evicted but they were refusing. The area was initially identified to upgrade three informal settlements in the area. By the time of a visit, units were supposed to be 90 percent complete, but the process has stalled.


Adjacent to the 405 units’ project, there was a site which was identified to develop 1000 units and the geotechnical studies outcome report stated that the area was dolomitic. However, the second opinion revealed that the area was not dolomitic all and that raised a serious concern about the credibility of some geotechnical studies conducted. The delegation enquired if there has been a survey to see how many people need to be relocated. On issues of land, the community indicated that the land is theirs.

The mayor of Naledi municipality indicated that there was a huge backlog in the area. A beneficiary list was in his office and would like the regional manager to explain the processes to be followed in compiling the beneficiary list.


It was indicated that other beneficiaries did not qualified as alleged to be previously benefited, some people live in old structures and they were found not to be having title deeds.

The delegation recommended that community education was very crucial and communities should be educated about various policies in human settlements. It was also indicated that not everyone could be given a house free. It was recommended that the provincial department should convene an urgent meeting to support the Naledi municipality in addressing housing challenges in the area. Furthermore, a team from the national department should form part of the meeting and to Vryburg, meet with the mayoral committee with the aim of resolving challenges encountered, and provide a report to the Portfolio Committee. The mayor of Naledi municipality indicated that a local housing Indaba was scheduled to take place during the 1st week of July 2012.

The delegation indicated the Vryburg project should be treated as a priority project. She further indicated the committee would follow the progress in that particular housing project. It was indicated that the SIU investigation issue might be a delicate one and the Committee will liaise with the national Department of Human Settlements on the matter.

6.12 Interaction with Community members

A community representative from Huhudi, indicated that they had three informal settlements in the area. He further informed the delegation that the community moved into the houses in November 2011 because they no longer had patience of waiting. It was also stated that the community was informed that the houses would be demolished, however they did not understood why the houses would be demolished when so much money was already spent in constructing of those houses. The community also reported that they applied long ago for houses and were not receiving them and those who recently applied were the ones receiving the houses.


The delegation informed the community that their issues were being investigated. The mayor indicated that there were houses to be constructed where the community would be given proper shelter. It was further stated that people would be given houses in accordance to the beneficiary list.


6.13 Site visit to open land where construction was due to start in June 2012

Site visit to an open Land parcel where there was going to be a Housing Development in Vryburg. Mrs Annel Barnard from NHBRC indicated that the project was enrolled but the NHBRC discovered that the area was dolomitic. It was then decided that geotechnical report will be complied. Mrs Barnard also indicated that the NHBRC was involved with other project in Vryburg but the community has illegally occupied the units. The NHBRC stated that there is going to be 1000 units. She further indicted that in some areas, developers do not listen when they are told that they should stop with developments following the geotechnical findings.

A representative from Toro ya Africa, Mr Less Davis, indicated that part of the reason that project was stalled is that there were no services installed. This has led to houses not being insured.

The leader of the delegation stated that, once the project is enrolled with NHBRC, it is not a project of the Province and in this instance where shoddy work was done, NHBRC should take the responsibility. NHBRC must take ownership and a report be provided to the Portfolio Committee in two weeks time.

6.14 Site visit Joubertina Ext 6

It was indicated that the project started in 2005 and finished in 2010. There are no doors inside. The delegation enquired as to whether the assessment of this project was done because it is an old project with old specification. In viewing the house, it was found that the house qualifies for rectification. The toilet is outside but there is water.

The delegation recommended that those houses must be fitted with doors, especially for those beneficiaries who are unemployed.

6.15 Site visit in Tlokwe in Ikageng Township in Potchefstroom R24 million project

The project was meant to cater for 100 units. The project was to transform old hostels into family units. It was indicated that the municipality prioritized this project and it is going to be rental units. It was stated that from the revenue collected, maintenance of the structures can be carried out. The project will was meant to be handed over in July. The municipality will take charge in the running and maintenance of the units. The units are not yet complete. The yard will be paved and there will be playing grounds and other amenities. It was stated that R2 million has been budgeted carry out the objectives.

The delegation enquired if SHRA was involved in the project and how much the municipality was going to charge for rentals. It was further enquired if there is a Memorandum of Understanding between SHRA and the Municipality. It was indicated that the project is meant to improve the quality of lives of the people who live in these Hostels. The Municipality will take charge of identifying these beneficiaries. The delegation enquired as to who will be managing the property. The Contractor Andisa, a youth Contractor indicated that they went to rope in Toro ya Afrika to form a joint venture. He further stated they also made sure that youths form part of this project and there are about seven companies owned by youths.

The leader of the delegation enquired if there are plans in place that will make sure that local people from the area are provided with skills. It was indicated that a meeting was held with SHRA and another company called Madulammoho (they are responsible for management of buildings such as the ones visited by the delegation). It was indicated that Madulammoho from Johannesburg will be in the area for five years and will transfer skills to the local community. Beneficiaries are already been identified and 2000 applications have already been received. It was stated that beneficiaries are per the policy. It indicated that rentals will be charged as follows, bachelor flat (10 of them) at R550.00 per month. There would be one bed-roomed flat (30 of them) at R750.00 per month; and two bed-roomed (60 of them) at R900 per month. It was indicated that the project is enrolled with NHBRC.

6.16Site visit to Reagile EXT 3 in Koster (the incomplete project)

It was indicated that the project was started between 2003 and 2007 and the houses have been identified for rectification. It was a blocked project and was awaiting the enrolment with NHBRC. It was indicated that some people could not wait any longer and they decided to move into the units even those that were not completed. The area has got bulk services.


6.17 Site visit to Mazista Project in Swartruggens


It was indicated that the community were relocated to this site from the other area. The delegation enquired as to where are the facilities such as schools and clinics. It was indicated that mobile clinics are available and children attend school in Swartruggens about 20 km a distance. It was further stated that there is no proper school transport system and children use hikes to get to school.


The mayor of Swartruggens indicated that there are 30 houses that are not occupied. Another challenge is the health system in the area. She further indicated that Eskom has committed to put electricity in the area. The project was initiated in 2009 and has not been completed.

The Chairperson of the Provincial Portfolio Committee indicated that the Provincial Department of Education should prioritize the education in the area and will request that scholar transport be provided

It was recommended that mobile facilities are needed in the area, even mobile classes are needed. The delegation stated that when a settlement is being planned, facilities such as schools and clinics should be included in the plans. There is no water in the area. Community member indicated that there are periodical water cuts; the community is told that the machine pumping the water is not working properly. Regional Director indicated that the water comes from the boreholes, and then they fill the reservoir. He further indicated that there is Magalis Water Board acting as the Water Services Authority and they should be brought in to assist with water issues.

In viewing the house: The house is a two bedroom house with a bath and a toilet and water basin. The HOD indicated that ceiling is included according to the specifications.

6.18 Site visit to Swartruggens Borolelo Ext 23 (incomplete blocked project)

The project started in 2003 and was initially planned for 500 units. The project has been blocked and some people took it upon themselves to finish their structures.

It was enquired as to what happened to the beneficiaries.


The HOD indicated that audits are being conducted in the area as to which houses would need rectification and which ones need to be demolished. He further indicated that some of the projects were handled by municipalities on the behalf of the province.


The Mayor indicated that the Province must go back to the communities and report as to what is the status of the project, because the province has informed the municipality that there are geotechnical teams that must come and assess these houses. Meanwhile, when the Municipality checks on their systems they find that a beneficiary has benefitted and they cannot be approved. This is a challenge because the community is up in arms complaining about the delay in the provision of houses.

It was indicated that the NHBRC was not involved initially. Some houses had defects.
Mayor indicated that they have about 80 beneficiaries facing the challenge of reflecting on the system as having benefited but no houses were allocated.


6.19 Site visit in FLISP Project Hartebeest - Madibeng municipality


Phase one was understood to consist of 1000 units. It was indicated that there was no funding for sewer then. Original Record of Decision was not followed but the engagements were continuing. The Department indicated that they could not proceed with the project without water and sanitation connections and meeting the NHBRC interventions. It was indicated that a plan was in place for the provision of schools and a clinic in the project.

The delegation commended the municipality for showing them the initial plans reflects the BNG plans. The delegation enquired whether there were plans for social amenities since a settlement cannot be established or be complete without social amenities being available. The delegation expressed a concern as to whether the province was still operating within its budget.

The Province indicated that it would complete the units with the budget allocated. That project started back in 2006. Land was identified and province negotiated with the municipality for the land to be released. In 2008 province had the approval, and in 2009, the project was signed. Municipality does not have land for the development of Social housing. People working in the area travel approximately 30 km a day hence the need for this kind of development. Parks and playing areas are also provided for in the planning, including soccer fields. It was indicated that what Cosmo City in Johannesburg has done, was that they have distinctly kept RDP houses apart. This does not encourage integration, however, in this project integration is catered for. The area has 36 Wards.

The delegation raised a concern that MIG funding is supposed to cater for the connection of water services and the municipality could not say that they lack funding to provide water services


The delegation also enquired if was there a provision for solar system as per Millennium Development Goals.

The municipality indicated that they are negotiating with Eskom to come to the party to assist with the provision of electricity in the area. It was indicated that historically Tshwane has supplied electricity. The municipality indicated that Eskom requires that they build a R45 million substation but the municipality cannot afford that kind of a project. Madibeng does not have the infrastructure of this kind. Madibeng has applied to Eskom for assistance

The delegation recommended that Eskom should be invited before the Portfolio Committee to present on how it can assist poor communities.


Ward councillor in the area indicated that the concern is on the sewage area, R15 million was provided for installation of sewer. Sanitation system is nonexistent in the three rural areas; people go to the field to relieve themselves.


The leader of the delegation indicated that VIP toilet is not a good system; new systems should be looked at. In the providing Human Settlements it means that construction of a structure be accompanied by other services. It also enquired as to how often the municipality empties the buckets form the toilets.


A Councillor indicated that the buckets are collected twice a month. The delegation raised a concern that if buckets are collected twice a month, how many buckets are provided per house?

Municipality has indicated that Popo Molefe informal settlement was established next to the sewer plant so they might have to be moved.


Bucket systems are a problem in the area, ward councillor indicated that they provide six buckets for 46 households.

6.20 Site visit to Jacaranda informal settlements

This is a farmland and the owner left about three families. It was indicated that people came and invaded the land. There is about 500 families living in this land at the current moment and this is a private land. There is only one water tap shared by the whole settlement.
A resident informed the delegation that the owner of the land had promised to build about 50 houses for his employees and this was said to have attracted many people in the area. They indicated that they have applied for housing through the municipality.

6.21 Site visit to Jakaranda

The second visit, the delegation proceeded to women build project in Jakaranda RDP Houses.
The number of units allocated is 111. The contractor said that they have started with the aprons and have completed 50 of them. In viewing the house, it was a 45 square meter house.

The delegation was impressed with quality of a house. Chief Director Mr Mgengo indicated that there is 80 percent occupation. The Mayor indicated that they have been engaging Eskom; they have been excluded from the municipal budget. He further requested that Eskom should make a presentation before parliament on how they are planning to roll out their electricity programme.



6.22 Site visit to Jourbeton Ext 20

This is an informal settlement-upgrading project with 975 units. It was indicated that sites were serviced and there was water connections and access roads. The project was allocated R9 million. Houses that were completed have been occupied. Bulk water and reticulation were already in place. The houses specifications were 45 m², two bed-roomed with bath, toilet and hand basin.

6.23 Site visit to Jourbeton Ext 24

The project was allocated 2084 units and an amount of R98 million was allocated.
It was indicated that the project was complete with 1700 units. Toro ya Africa was a contractor responsible. Toro ya Africa built 1752 units while the remainder was given to Kosh Construction.


The delegation raised a concern that the developer seems to be too much involved even with the registration of beneficiaries and need an explanation on this issue.
The delegation further enquired about the reasons behind the blocking of this project because of dolomite, and where is NHBRC a case like this.

A concern was also raised as to why houses were built without toilets provision.
In addition, if there was additional funding for the additional services mentioned during the presentation. The delegation enquired as to what was meant by integrated VIP. The delegation condemned the issue of developers involved in the registration of beneficiaries.

In his response, the Chief Director indicated that it was recommended that the women and youth should be involved in the construction of houses. The delegation indicated that there has to be 80 % of houses constructed by established companies. It was indicated that for the surveying of GIS, private surveyors were used. It was indicated that, before NHBRC could come into play, dolomite studies were not conducted. In rural areas the Department provide VIP because there are no bulk services.


The delegation raised a concern that even on this democratic era departmental officials seem to apply the same pattern or practises that were used during the apartheid era where communities in rural and townships were subjected to substandard services, hence toilets or sanitation facilities are still of low quality or houses built without these facilities.

It was indicated that the land was purchased on behalf of beneficiaries from land affairs. On the bucket system, Deputy Director Sanitation, indicated that there are no bucket toilets in the province. The backlog was estimated at 31000, with nine informal settlements.


The Executive Mayor indicated that there were approximately 14 000 households in need if housing. There was an areas in Kosh were there was bucket system, others have pit toilets. In other areas, because of the geotechnical survey not done, the Municipality cannot build in some other areas. Next to Jakaranda there is a new informal settlement on a private land, about 500 households.


A concern was raised about R57 million that was allocated to RHIP, because in some other areas people do not have water and sanitation. The delegation stated that a remedial plan should be provided as to how this money is going to be used and how RHIP will be rolled out.

6.22 Site visit to Reagile Ext 3 in Koster


This project is from 2003 and 2007, it was incomplete project and houses are due for rectification. It was blocked and was awaiting the enrolment with NHBRC. It was indicated that some people could not wait any longer and they decided finish their houses and move into the structures. The area has bulk services.

6.23 Site visit to Toro ya Africa emergency housing project

The project was an emergency housing project responding to disasters. In 2006, the greater Taung was hit by the disaster which affected more than 2000 households. The entire infrastructure was damaged. An amount of R87 million was allocated. Toro ya Africa was the company appointed to rebuild damaged post the disaster. Sanitation project was provided in a form of enviro low system but the community was not comfortable with this system. Communities did not want to be relocated to other areas; they preferred to remain where they are. Four different women constructors were appointed, and only one constructor delivered successfully. Those who failed, one of the reasons was that the area of dolomitic. It was indicated that the Department only received allocation towards the end of the financial year which is R15 million. It was indicated that the project is now proceeding very well and has been registered with the NHBRC.


The delegation raised a concern that in many projects that the briefings were done, it all boils down to the developer as the person to be blamed. The delegation stated that it should be fully briefed on how developers were appointed.

The Department indicated is that the challenge was that, when the development has commenced which do not have bulk infrastructure, the developer would to move ahead with the view that bulk issues would be sorted at a later stage.

A concern was raised that when a contractor is appointed to come rectify what the previous contractor has done, this is a wasteful expenditure. The delegation enquired as to what has been done to recover the money that has been lost. In addition, what happened to the issue of the SIU investigation?

6.24 Site visit to Redirile 129 units Kgetleng Revier Local Munipality,

Project is called Redirile. It was indicated that 129 units were approved. A women contractor was appointed to construct the units and they were completed without any challenges. It was indicated that it was occupation 100% in all the units.


The delegation enquired as to why are there no aprons. The department indicated the specifications at that time did not include aprons. The delegation also enquired as to why are there no inside doors, because recently developed houses should have doors inside. In viewing the house, the owner told the delegation that the doors were fitted when they moved in. The leader of the delegation enquired as to where is the toilet and the bathroom, because this is a new project and this BNG.

VIP toilets were provided long before the project came in. A concern was raised about VIP toilets that were provided, while there MIG fund for providing bulk infrastructure. The municipality indicated that the water sources are from the borehole.


The contractor indicated the following challenges: getting the beneficiary list on time, costs of building material that has escalated completion of the project in three months. The contractor indicated that they currently doing the social responsibility of building two houses for the disabled. Other challenge is the delay in payments. The contractor indicated she borrowed the money from NURCHA and her concern is that the interest is high. NURCHA charges R30 000 in administration fee and this is too high. A concern was raised that, women contractors seem to be allocated fewer units.

6.25 Site visit to Popo Molefe informal settlement

The informal settlement started in 1996; it had 167 shacks and 96 beneficiaries. There were six bucket toilet facilities that were emptied twice a month. The communities were complaining about the mobile clinic that was coming to them only once a month or never come and the nearest clinic was two hours away walking distance.

There was also a block of municipal hostel building with six rooms within the informal settlements which was appalling. The delegation was told that municipal officials who were maintaining the sewer plant were residing there in that hostel. There was no storm water drainage, no electricity and water pipes were leaking.

6.26 Site visit to Sunnyway Village

The delegation was informed that the project proposal was presented to the Council in 2006, and the project was approved in 2009. The proposed plan of the project indicated that the project would accommodate low-cost housing. Apparently, the municipality had encountered land challenges to proceed at the time. It was further realised that the municipality did not have sufficient land to accommodate both low cost and social housing opportunities to its community.

Eventually, private sector donated a land parcel of which another portion was to be paid for by the local government later. Approximately, 1 110 stands were made available and were serviced. Water pipelines were connected. Once again, the project was challenged by lack of a reservoir and funding for sewer connections. A Record of Decision (ROD) was not yet provided. Another challenge facing the municipality was lack of funding to address sanitation as a whole in the area. The Department of Water Affairs made funds available to upgrade the Rietfontein sewer plant, approximately, R15 million was provided. However, more funds were required for the success of the project. The housing development project was divided into four phases. Phase 1 was state subsidy houses, phase 2 and 3 was for private sale and affordable houses and phase 4 would be high-density houses. The project was meant to accommodate people from the three rural areas. Sanitation was cited as a challenge.

6.26.1 Deliberations

The delegation enquired about the number of informal settlements within the municipality. The delegation further enquired if the municipality was using bucket system, if so how often the buckets were emptied and allocation ratio per household. The delegation further enquired about the beneficiary management and coordination.

6.26.2 Responses

The municipality reported that it has 31 informal settlements and approximately 15 000 households living there. It was reported that the bucket system was still in use and six buckets were allocated to 46 families. There were also 330 people living at the dumping site who were to be accommodated in the new housing development.

7. Outcomes of the follow-up meeting held with the North West MEC – 26 July 2012

The Committee held a meeting with the province and the respective municipalities in Parliament as a follow-up on issues raised during the oversight visit. The objective of the meeting was to meet with the national department, the MEC and the mayors of the following municipalities i.e. Naledi, Mafeking and Swartruggens to brief the Committee on outstanding issues. It was agreed that the Rooigrond communities would not be evicted anymore. The national and provincial department should facilitate the process to address the 405 illegally occupied units in Naledi Local Municipality. The national department should present the SIU report regarding the North West for the alleged fraud and corruption practises to the Committee. The province should update the Committee on the response by NHBRC on the 405 units with serious defects while the project was under its supervision. Furthermore, the national department to report on the role of Maxima Consultants with regard to the roll-out of sanitation, in the province and the costing thereof. The national department should also report on what plans they have to extend the sanitation service providers that will include Community Based Organisation and cooperatives. It was further stated that the national department should present its plans and process to implement the 10% deduction from provinces for rectification. To present processes and policy framework on the utilisation MIG for human settlements development.

8. Observations

The delegation observed the following:

The province was experiencing service delivery protests that were mainly due to incomplete houses; sinking houses due to poor geotechnical studies that were done. Even though the provincial department painted a glossy picture and good relationship between them and the National Home Builders Registration Council, there were projects that were not enrolled and some required rectification. The tranche payments that were made by the provincial department to municipalities and later to contractors who failed to complete projects and left them blocked. The allocated conditional grant was used to rebuild old houses instead of new houses and that impacted on targets and plans not being met. The provincial department did not utilise its allocated budget for the provision of sanitation even though most of the informal settlements and other townships were still using bucket system and in some areas including rural areas people were opting for open defecation.

Lack of required capacity of provincial department and its municipalities to manage the Housing Beneficiary List and credible Housing Subsidy System (HSS) was of concern. This meant that the Housing Beneficiary List could be easily manipulated by officials (as had been witnessed in many municipalities). There were reports of unruly individuals who vandalised and illegally occupied houses in order to jump the queue of the Housing Beneficiary List. The under-spending persisted to be a common challenge for most municipalities despite the dire need for housing, sanitation and other services. There were houses that were built in isolation of social amenities such as clinics, schools, and playgrounds. Many projects were not subjected to geotechnical studies and were subsequently blocked thus resulting in poorly constructed houses that require rectification. Houses are built without sanitation facilities or pit toilets and the Committee does not approve this kind of a system or facility.

Most municipalities in the province had capacity constraints in areas of technical expertise that is town planners, engineers etc. Many communities had no basic services like running water, electricity and refuse removal. In the delivery of Community Residential Units, the provincial department was moving at a snail pace as far as reaching the targets. Discrepancies in the reported figures for housing backlog and housing needs were noted. The late allocation of Disaster Relief Fund in the 2011/12 financial year resulted in the fund not been spent. The rectification of rectified houses was also a concern. Lack of public participation was raised as great concern, as it is a Constitutional imperative for people to participate in decision making on their development or service delivery undertaken in their area. Decision taken in very important governance structures are not honoured and respected such as the adoption of Macro Coordinated and Alignment Framework by MinMec, however it appeared as a talk show as it is not implemented. The commitment by the province in empowering women and youth contractors was very much commendable. The decision by the MEC to take over the implementing status from the municipalities that were not accredited was also applauded to, as that was compromising service delivery.

9. Recommendations

The Committee recommends that the Minister should ensure that the national department:

1. Brief the Committee on the progress made to address the sanitation challenges as well the budget expenditure to that effect.

2. Ensure that the adopted Macro Coordinated and Alignment Framework by MinMec are implemented as it a vehicle to the realisation of an integrated development envisaged by the government.

3. Ensure that Delivery Agreement Foras address service delivery issues adequately, thus include the mineral rights licensing which was raised by the province sharply as huge challenge in mining town areas.

4. Ensure that the provincial department assist the municipal workers who were residing at the dilapidated hostel in Popo Molefe informal settlements with an alternative accommodation whilst waiting for housing allocation process.

5. Ensure that the provincial department provide an appropriate sanitation facility to Popo Molefe and Jacaranda informal settlements to maintain and restore their dignity.

6. Ensure that the both the national and provincial departments furnish the Committee with the provincial land audit report.

7. Ensure that the provincial department provides a detailed report on the informal settlements upgrading programme.

8. Report on the outcomes of the meeting held in Parliament between the national department, the MEC and the Mayors of the following municipalities i.e. Naledi, Mafeking and Lekgetleng.

9. Ensure that mining sector extends its partnership with government to other parts of the province and its model of delivery should be adopted across the country.

10. Ensure that bulk services are installed prior any project commencement.

11. Encourage the province and municipalities to utilise expertise of professional councils such as Council for Geo-science hence, the province is prone to dolomite challenges.

12. Ensure that provincial department engage Eskom to address challenges of electricity in particularly in Sunny way project, etc

13. Encourage and provide necessary support to the provincial department in spending the human settlements grants that have been allocated to them.

14. Present the SIU report regarding the millions of public funds that were paid by the provincial department to contractors as tranche payment including the R8 million allegedly build only one house.

15. Ensure that there is school transport for Swartruggens new settlement.

16. Ensure that public participation is seriously considered in all human settlements delivery programmes as it is a Constitutional obligation

17. Provide a full report on challenges reported on Moses Kotane projects and the outcome of the meeting suggested by the Committee between the province, local municipality and the Member of Parliament, deployed in that constituency..

18. Furnish a detailed report on disaster-affected areas and the number of affected households including the budget allocated to address such problems.

19. Provide the necessary support and advice to the local municipality that have under spent their MIG especially on sanitation.

20. Present progress report on North West Housing Cooperation (NWHC) winding down process quarterly.

21. Ensure that Housing Development Agency services are accessible as the province encounters land challenges for human settlements development

The Minister is requested to report progress made to address challenges and respond to recommendation of the Committee 30 days after the adoption of the report by the House.

Report to be considered.

Documents

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