Urban Settlements Development Grant in Nelson Mandela Metro, with Deputy Minister

Meeting report

Opening remarks by the Chairperson
The Chairperson welcomed all present, specifically new Portfolio Committee members, Ms P Duncan and Mr S Mokgalapa from the Democratic Alliance (DA) who were replacing Mr A Steyn and Mr A Figlan who had been redeployed. She emphasised that the Committee valued transparency, democratic principles, open debate and consensus across party lines in terms of its portfolio. She welcomed the fully representative delegation from the Eastern Cape led by the MEC for Human Settlements, Ms Helen Sauls-August. It included Cllr Fikile Desi, the Chairperson of the Portfolio Committee on Human Settlements in the Nelson Mandela Bay Municipality (NMBM); Cllr Balu Naran, Chairperson of the Budget and Treasury Committee (NMBM); Mr Themba Hani, Acting Municipal Manager (NMBM) and Dr Israel Tsatsire, Chief Operating Officer (NMBM). The Chairperson noted the presence of Ms Zou Kota-Fredericks, Deputy Minister of Human Settlements, Mr Richard Dyantyi, Special Advisor to the Minister of Human Settlements and Mr Neville Chainee, Chief of Operations, National Department of Human Settlements (NDHM).

She thanked the provincial administration and the NMBM for this high level delegation as it would enhance intergovernmental relations and facilitate cooperation between the three tiers of government within the context of their distinct roles and the separation of powers enshrined in the Constitution. She emphasised that the government was committed to providing its citizens with habitable human settlements. It was the Committee's responsibility to monitor the policies and objectives of government and to play an advisory role to the other spheres of government.

The Chairperson outlined the background to the present meeting. Challenges had emerged with the implementation of the newly established Urban Settlements Developments Grants in NMBM. The Portfolio Committee had undertaken an oversight visit to the Eastern Cape in November 2011, one of their objectives being to monitor the implementation of the USDG. The Committee had observed that there were challenges in NMBM as well as Buffalo City Municipality relating to their understanding of the purpose of the Grant. In Buffalo City, funds had been used for Sport and the Committee had rectified that and they were able to account for the funds that had been disbursed to them. In contrast, NMBM had been allocated R502 million for the 2011/12 financial year and Human Settlements could only account for R95 million of the Grant, which was the allocation they had received from the municipality. The Portfolio Committee had met with provincial and municipal officials on 8 December 2011 and had not been satisfied on financial and other issues due to the absence of the relevant officials and Accounting Officer. They had thus requested this follow-up meeting with all the principal role players, including the MEC, so that the issues could be resolved collectively.

Nelson Mandela Bay Municipality (NMBM) presentation
Mr Themba Hani, Acting Municipal Manager (NMBM) apologised on behalf of the Metro for the shortcomings of their previous engagement, noting that no disrespect had been intended to the Committee. He handed over to Ms Dawn McCarthy, Director: Land Planning, for the briefing.

Ms McCarthy stated that the presentation included an overview of the NMBM in terms of statistics, a financial and a non-financial performance report on the USDG and it concluded with the concerns about the informal settlements at Fitch's Corner and Grogro (see document).

In terms of statistics, NMBM had a population of 1,1 million which would increase to 1,24 million by 2020. Significantly, in-migration was relatively low. There were 81 informal settlements comprising of 22 411 households. There were 49 000 backyard shacks. There was a total housing backlog of 71 411 units and about one third of the total population of the municipality was not properly housed. Ms McCarthy highlighted the prevalence of extreme poverty in NMNM and that it was located in the second poorest province in the country. Unemployment was at 28.2% and 44% of households received at least one social grant. 91% of households had access to basic sanitation and there were 22 500 buckets in circulation in informal areas.

Ms McCarthy drew attention to the Division of Revenue Act (DoRA) and the conditions attached to the USDG. Priority had to be given to residential infrastructure for basic services such as water, sanitation, refuse removal, solid waste, connector and bulk infrastructure and roads supporting human settlements. The Grant could also be used for the acquisition, development and redevelopment of land, basic infrastructure for poor households and the upgrading of informal settlements. She emphasised that the municipality had tried to adhere to those conditions.

Ms McCarthy expanded on the 2011/12 allocation methodology adopted for the utilisation of the total USDG allocation of R502.6 million. R247 million of this amount was contractually committed to multi-year projects based on the Municipal Infrastructure Grant (MIG) and the MIG-Cities Framework. These projects were being phased out over time. The balance was allocated to new USDG projects such as the transformation of current townships into sustainable human settlements; the provision of bulk services for new developments; the acquisition of land for housing delivery; and the provision of reticulation services for the housing delivery programme.

In terms of financial performance, in the first six months of the performance period (1July - 31December 2011), the expenditure was 32% of the total USDG allocation. This relatively low spend was due to tender and other management processes. The bulk of the expenditure would be reflected in the latter months of the financial year, as indicated in the projected future financial performance. It was anticipated that by the end of the financial year, the total USDG would have been spent, as indicated in the major projects under way (see presentation)

Ms McCarthy emphasised that all the water and sanitation projects that had been funded by the MIG-Cities allocation, had been in support of housing delivery and thus supported the conditions of the USDG allocation. The exception was the provision of sidewalks and cycle tracks which would be funded from an alternative funding source in the 2012/2013 financial year. While all major projects were progressing as anticipated, there were some challenges such as a legal dispute in the Wells Estate project and the allocated funds of R7,9 million would not be spent by the end of the financial year. This was being monitored and there had been a reallocation of the funds to an alternative USDG project. The Major Roads and Stormwater projects, to which R146 million had been allocated, were almost all on track excepting the Chatty Stormwater Improvement Project where approval from an Environmental Impact Assessment (EIA) was awaited.

The strategic objectives for human settlements in NMBM included the elimination of the housing backlog; the formalisation of the 81 informal settlements and the relocation of 18 862 families by 2016; addressing the fragmented spatial patterns; acquiring strategic land for lower income human settlements; and constructing integrated human settlements with all the necessary services. Relocation would only be undertaken as a last resort where lives could be endangered due to flood plains or power lines.

Key elements of the current Human Settlements intervention programme were the informal settlement upgrading plan, the 7-Year Housing Plan (2009 - 2016) and an accompanying relocation plan. A computerised Land Asset Management and Control system was in operation which allowed access to the status of government and municipal land. There was a Social Housing Strategy and a Spatial Development Framework to which Master plans for water and sanitation and other Master plans were aligned. They were also developing a Housing/Rental Strategy with the Housing Development Agency (HDA).

Progress made in the period from July to December 2011 were the completion of 482 houses, the servicing of 1209 erven, the upgrading of 2 informal settlements (Zosa and Kleinskool), the acquisition of 3 land parcels and the acquisition of three were in progress. In terms of access to water there was 100% access to water and this target was met in February 2009. Water was provided to all informal settlements within a 200 m walking distance.

Access to basic sanitation was 91%. The eradication of buckets to formal houses prior to 1994 was met in 2006. There was an interim bucket service of 22 500 buckets to informal settlements in stressed areas which could not be reticulated such as flood plains and dump sites. These communities were awaiting relocation to fully serviced sites with formal housing.

Ms McCarthy addressed the concerns raised by the Committee on the informal settlements of Fitch's Corner and Grogro at the Portfolio Committee meeting held in December 2011. She stated that the Metro had a seven year Council approved human settlements development plan which catered for the 81 informal settlements including Fitch's Corner and Grogro. It identified informal settlements that could be upgraded in situ or partially in situ with some relocation and those in stressed areas which required total relocation. Stressed areas received a higher priority according to their vulnerability and the availability of projected funding.

At Fitch's Corner there were approximately 95 shacks occupying a cemetery site. A technological evaluation had identified that the site could not be serviced in respect of water and sewerage. The original plan to relocate the community to St Albans had proved unviable due to environmental constraints. St Albans had 10 Wetland areas and drainage was a problem. It had been listed as a critical biodiversity area with endangered ecosystem areas. The plan was now to relocate the households to Witteklip which was 3 km away from the existing settlement. It would take 12 - 24 months to make provision for bulk services.

A preliminary environmental study of the Grogro settlement showed that it was environmentally sensitive and revealed the presence of critically endangered species. Access to the site was also problematic. The plan had been to relocate the households to Kyamundi in Despatch but the community was resistant as it was a long distance away. Alternative land available for relocation was Hunters Retreat (Erf 455) which was 3 km away. The land was owned by the municipality, it was on a transport node, there were employment opportunities and new private commercial development such as a shopping centre and community facilities were planned. A proposal call for this development, including the accommodation of Grogro residents as part of a range of housing developments, was in the pipeline and the process had a 36 month timeframe.

In conclusion, Ms McCarthy noted that NMBM was committed to the development of integrated sustainable human settlements in terms of the USDG and their Built Environment Performance Plan demonstrated their efforts to achieve this.

Cllr Desi was satisfied that the presentation had captured all the areas of concern. As local government, they had intervened for the Grogro and Fitch's Corner communities and had engaged with the Grogro residents when they had refused to be relocated to Kyamundi. They were watching developments closely to ensure that the shopping centre did not overtake their plans for the area. They were strengthening their linkages with the community and improving communication with them to ensure that they would be happy about the relocation.

Discussion
Mr K Sithole (IFP) queried the R4 million budgeted amount for relocation of Scientific Services listed under Roads and Stormwater projects and how it was aligned to the purpose of the USDG (slide 7)

Mr Sithole wanted further information on the R11.4 million for the Wells Estate Stormwater Improvements where there were delays in the adjudication process due to a legal dispute with the tenderer (slide 7).

Mr Sithole wanted the size and location of the three land parcels acquired by the municipality which had been reported under the progress made from July to December 2011 (slide 19).

Mr Sithole queried the status of the eradication of the bucket system as it was reported that the “eradication of buckets prior to 1994 to formal houses had been met by 2006”. (slide 21)

Mr Sithole wanted clarity on environmental constraints and how it affected access to sanitation. He also questioned the use of the bucket system.

Mr Sithole referred to the timeframe of 36 months for the process for the proposal call for the development of Hunters Retreat (Erf 455) and questioned why the process would take that long.

Ms P Duncan (DA) commented positively on the presentation. She referred to the municipality's Land Asset Management and Control System in their current human settlements intervention programme and asked if it was possible for them to say how much land was state or privately owned land so that the availability of land could be accessed immediately (slide 18).

Ms Duncan called on the provincial and national representatives of the Department of Human Settlements to assist in addressing the time constraints of nine months for the EIA process on projects (slide 24). Was red tape in the EIA process impeding the implementation of projects? She observed that it was difficult for municipalities to excel in projects, given these constraints.

Mr S Mokgalapa (DA) commended the well done presentation. He noted the housing backlogs and the problems being experienced by NMBM with in situ upgrading because of the undesirability of the land. What was being done by the Metro and the province about the issue of land? The backlogs could not be solved if land was not available. How were they addressing the challenges of EIAs and environmentally sensitive areas vis a vis in situ upgrading?

Mr Mokgalapa wanted clarity on the typologies and urban design of the development that the Metro would be doing. It was common cause that the land closer to inner cities was probably for densification. What type of housing development would they be doing in the two new relocations? Would it be the normal Reconstruction and Development Plan (RDP) houses or would it be medium to high density houses? It was always a challenge to develop in urban areas because of the land was more desirable for high density development and not RDP housing.

Ms D Dlakude (ANC) noted that access to water was 100%. However, there was a huge backlog in the eradication of the bucket system. On their oversight visit to the area the Committee had found that the bucket system was still in operation in formal areas. Why was this still so if there was 100% access to water?

Ms Dlakude noted that 482 houses had been built in the progress report for July to December 2011. (slide 19) What had been the target? Where were the houses built?

Ms Dlakude noted nothing had been said about rectification. The Committee had visited the Metro in December 2011 and had seen houses in need of urgent rectification. What were the problems there?

Ms Dlakude referred to the issues of the EIA at Fitch's Corner and noted that there was a Correctional Services facility nearby which had infrastructure in place. Why had the municipality placed infrastructure there if they were aware of the EIA challenges?

Ms A Mashishi (ANC) asked if there were any blocked projects in the Metro.

Ms M Borman (ANC) expressed her appreciation for the presentation and the presence of all role players to address the issues. She noted the timeframes of major projects to be undertaken in the upcoming months and was concerned whether the Metro had the capacity to deliver on target. In terms of their forward planning,  they would have to double what they had delivered in the first six months of the financial year.

Ms Borman referred to the 482 houses built and noted the backlog of 71 411 units which they wished to eliminate within five years. This implied that they had to build 14 000 per year. This was of concern to the Committee if they were unable to deliver according to their target.

Ms Borman emphasised that sanitation was one of the government’s priorities as declared by the President and noted with concern the low spend on sanitation.

Ms Borman queried the lengthy EIA process which impeded progress on projects. If there were serious environmental constraints with this land, what did the Metro intend to do with the land? What sort of development, if any, were they planning for the land?

The Deputy Minister of Ms Kota-Fredericks noted the sectoral plans given in the presentation and that the Metro had made a distinction between their social strategy and their housing development strategy. She asked why the one did not inform the other and said that this was something they should consider beyond the present discussion.

The Deputy Minister of Human Settlements, Ms Zou Kota-Fredericks, referred to the progress report and the number of informal settlements that had been upgraded and formalised which was two out of 81. She found this unacceptable and observed that this performance was not helpful and asked them to share the reasons for this and the problems they were facing.

Ms Kota-Fredericks condemned the persistence of the bucket system and emphasised that the eradication of the bucket system was a priority of government. She noted that there were a number of mechanisms that could be utilised and the Metro should look at research and find alternatives that would be preferable for communities.

Ms Kota-Fredericks agreed with the Committee that the time given for the implementation of projects was too long. She emphasised that the USDG was there for bulk infrastructure and to expedite the build process so that they could deliver housing faster. She noted that the Metro was using the USDG for projects that could be done with the MIG and this was not helping. They wanted the USDG funding to zoom in on providing bulk infrastructure for human settlements for the people. She suggested that perhaps the Department should have a blueprint on how the money should be spent as at the moment it was being integrated with everything.

The Chairperson referred to the backlog of 49 000 backyard shacks in NMBM and reminded the meeting that the Minister of Human settlements had called this a ticking time bomb at the National Human Settlements Summit held in Port Elizabeth. She remarked that the municipality had the responsibility to make by-laws and they should not wait for national legislation. Did they have a plan to address this issue?

The Chairperson asked who was responsible for disbursing the USDG funds and if there was any structure for this in the Metro. If they had such a structure, was the Human Settlements unit represented on that structure? If this was not happening then they were not doing things correctly.

The Chairperson clarified that USDG funding should not be spent on Public Works and that other government departments had to contribute to the integrated human settlements programme. She referred to the Minister of Finance's statements on the allocation of UDSG funds to the Department of Human Settlements. He had noted that funding would be forthcoming from other departments such as Health and Education. Collaborative planning was necessary and this had to start at local government level and with the Integrated Development Plans (IDPs) of municipalities. The USDG had to be aligned to a particular human settlement project to ensure that there was infrastructure and basic services such as water and sanitation.

The Chairperson noted the numerous major human settlements projects being undertaken by the Metro but there was insufficient information on the number of units being built and there were no timeframes and project cycle (slide 6). She also queried the tarring of gravel roads under the Roads and Stormwater projects (slide 7).

The Chairperson referred to NMBM's Strategic Objectives for Human Settlements (slide 17) and drew attention to the target for the relocation of 18 862 families by 2016. They had stated that this relocation would only be undertaken as a last resort and she queried whether they were committed to this undertaking. She commented generally that commitments to the upgrading of hostels into family units had been made elsewhere and this had not been done. She drew attention to the 482 houses built in the first six months and said that this was not a satisfactory pace for delivery.

The Chairperson raised concerns about conditions in informal settlements in NMBM. On oversight visits community members had informed them that there was no refuse removal and bucket system, even though Metro officials had informed them otherwise. They were misleading the political leadership. She noted that they should not be promoting the use of the bucket system and it had to be eradicated and there were many innovations that could be embarked upon to address this.

The Chairperson expressed her dissatisfaction with the situation at Fitch's Corner and Grogro. She noted that the NDHS had bought the land ten years before and it had still not been developed. There was a Record of Decision by the Department of Environmental Affairs in 2006, which said that the land could be developed if bulk infrastructure was provided, but the Metro did nothing. In 2011 the Metro had received a second opinion which stated that the land could not be developed. There was a farm there so the difficulty appeared to be the prospect of building homes ‘for the poor’.

The Chairperson stated that the community at Grogro had been there for more than 50 years. The land was owned by a private farmer and they had been informed by the community that he had agreed to hand over the land to the government for housing for the people. The problem was that he could not be located. She was not convinced by the EIA as there were farms there. She queried why the community had not been relocated sooner if it was such an environmentally sensitive area. The settlement of poor people there appeared to be the problem, while the rich could be accommodated. She proposed that the province and municipality request that the provincial environmental unit re-look at the matter and that a proper report be made available. In the case of Fitch's Corner she proposed the intervention of the National Minister. She wanted to establish whom the consultants were who had given the second opinion and how they were aligned to the municipality.

Ms Duncan referred to the Supply Chain Management in the Metro and commented that this was often a problem in municipalities. She was disappointed to see that they were experiencing constraints due to the unavailability of senior staff. Were they understaffed or under funded? This was unacceptable and she felt strongly that the political leadership and officials had to address this.

Ms Duncan said it was problematic that the financial year for local government did not coincide with the provincial and national financial year. This created problems which would be eliminated if there was one uniform financial year for all three tiers of government. Municipalities often had to apply for roll-overs and other managerial processes were also affected.

Ms N Mnisi (ANC) noted that unemployment was a concern for the country and it had not been mentioned in the presentation. What was the municipality doing about unemployment?

Mr J Matshoba (ANC) asked if the officials had visited the areas under discussion as they seemed unaware of the problems. The Committee had done oversight visits before 2011 and members visited the area in their own time. In Motherwell houses were falling apart and he wondered if they had gone to Fitch's Corner to see if their information was correct.

Ms Dlakude noted in the presentation it stated that all of the informal settlements including Grogro and Fitch's Corner were part of the Council approved 7-Year human settlements development plan. (slide 27) She asked since when this had been so.

Response from NMBM
Mr Hani noted that the presentation had focused on the USDG and he apologised that they did not have information on unemployment and other matters. They could make the information available to the Committee at a latter stage.

Dr Israel Tsatsire, NMBM Chief Operating Officer, commented that they had learned a lot from the questions and they would revisit and rethink their strategies in certain areas moving forward. He addressed the institutional issue of how the USDG funds were allocated. They had a Committee led by the Municipal Manager, and the COO and Budget and Treasury sector were represented. The Human Settlements Directorate was the key component of that Committee represented by the Director, Dawn McCarthy.

Dr Tsatsire acknowledged that it was their first year of USDG funding and they were in a transitional process from the MIG-Cities and the MIG and these contractual commitments had to be honoured. In years two and three, these projects would be completed.

The Metro was collaborating with other departments nationally and provincially. In the case of the tarring of roads, there were national and provincial roads in the Metro and they were catered for by the relevant departments. The roads referred to were roads in newly developed residential areas. They were faced with challenges to investment in the townships as the roads were not properly maintained and upgraded and this influenced the unemployment rate.

They noted the query on the allocation for Health facilities and this allocation would change given the provincialisation of primary healthcare facilities.

The Metro was working with the province on EIAs and they had developed a joint strategy and there had been an improvement. Additional funding and resources had been made available by the provincial Department of Environmental Affairs and this was reflected in their revised timeframes.

The Metro had addressed the issues in the Supply Chain Management (SCM) processes. They were revisiting the policies and guidelines on SCM processes and they were now structured to facilitate improved delivery. There were still delays but they were monitoring the situation continually.

Dr Tsatsire noted that they were referring to formal housing when they said they had eliminated the bucket system in 2006. The buckets that were in circulation were in the informal settlements and distressed areas.

Since 2009 they had upgraded 26 informal settlements and the two which were reflected in the presentation were for the current financial year.

The 482 houses which had been built was not ideal but they had developed a response plan. What delayed delivery was the availability of prepared sites and there were 1 209 sites prepared and the pace of delivery was going to pick up moving forward.

He indicated that Ms McCarthy would address the planning, land and related issues and other officials would address the remaining questions.

The Chairperson noted that the President in the State of the Nation Address had said that R2.6 billion had been allocated to the Department of Water Affairs to address the backlogs in the provinces of the Eastern Cape, KwaZulu Natal and Limpopo. Although sanitation had been transferred to the NDHS, the resources were still there and the Department of Water Affairs still continued with the programme of sanitation as they had that budget. The issue came back to collaborative planning.

Ms McCarthy responded on the query about the land parcels and said that they were cadastral sites. She did not have the exact figures or the areas but the land parcels that were targetted for acquisition were in the central city area. They were not very large but significant in the contribution they would make when they were converted to mixed use.

On the response time of 36 months for the call for proposals for development at Hunter's Retreat, she commented that it would be possible to examine the timeframes and align processes but it was also a precautionary measure to be less optimistic. They did recognise the urgency of getting the project off the ground as soon as possible.

On the query about the Land Asset Management and Control System (LAMACS), Ms McCarthy responded that it was possible to identify state and private land immediately. They had an excellent Geographic Information System (GIS) and the LAMACS system identified the status of the land and whether it had a lease on it. What it was not able to indicate was whether the land could be developed and serviced or whether it had environmental constraints. That required a technical process of evaluation to ascertain its availability for housing development.

On the challenges of EIAs, Ms McCarthy agreed with the COO that they were working very well with the provincial department and there was a corporate environmental task team. The municipality, with the full support of the province, had prepared an environmental management framework. This was an overall environmental study that contained the biodiversity study of the municipality that provided an overarching indication of what areas could be developed from an environmental perspective. This would prevent the same mistakes that had been made at St Albans where there had been planning and then the EIA was negative. The Framework had to be approved by the provincial government and hopefully it would ease the path of EIAs and it would also prevent applications that would never succeed.

On the query about the development typologies and the type of housing that the municipality was perpetuating, Ms McCarthy said they believed that they should be going higher density, especially in the inner city areas where resources were closer. It was difficult to get community acceptance in some areas for higher density development and this was a challenge. Zoza, a higher density area near Korsten, was a showcase of what the municipality had achieved. Once more of those typologies were developed, people would lose their suspicion about higher density development.

On the difference between the rental strategy and the social housing strategy, Ms McCarthy responded that the latter catered for one area of the rental market but there was affordable housing and gap housing areas as well. The rental strategy was developed in conjunction with the Housing Development Agency (HDA) and took a much broader scope.

Mr Barry Martin, Director: Water and Sanitation, NMBM, expanded on the eradication of the bucket system in formal housing by 2006 and stated that what they were currently struggling with, were the 22 500 buckets in the informal settlements which were in stressed areas with flood plains and power line servitudes.

The Chairperson intervened to reiterate that in South Africa where people had the right to adequate sanitation, excuses like flood plains was unacceptable and the bucket system had to be eradicated as stated by the government. The Committee had fought for this and they did not want to listen to excuses as this was always done in the case of the disadvantaged.

Ms Kota-Fredericks asked why NMBM was taking so long to accomplish this.

Mr Hani responded that those were only introductory remarks by Mr Martin and they were coming to solutions and they needed support in the technologies they were exploring.

Mr Chainee supplemented what Mr Hani was saying and said that in reality, NMBM had a much better plan than other municipalities in relation to informal households in stressed areas. It might not reach all the standards and requirements but it was a step in the right direction in providing access to sanitation.

Mr Martin said they were not proud of the buckets and two years ago they embarked upon a programme to eradicate the bucket system and put communal flush toilets in. They found that this would cost them about R300 million for the informal settlements which were in the process of being eradicated. As a Council they had to make a conscious decision on spending such a large amount of money when the people would be moved to permanent housing. They developed a business plan that integrated the sanitation need with housing delivery as people living in stressed areas would not be staying there permanently but would be moved to areas that were sustainable. This integrated business plan was submitted to both the Provincial and NDHS in terms of the sanitation programme.

They proposed that they deliver a complete house, that is, a top structure and a serviced site, in terms of creating an integrated human settlement. This was the most cost effective way to eradicate the bucket system. The total value of the project was just over R4 billion and was integrated with housing costs. R2 billion was for a housing subsidy for the top structure and the remaining R2 billion was for the internal services for the development of the site as well as the bulk services and linkages to create an integrated human settlement. This was the ultimate plan of the Metro and as it was rolled out, the bucket system would be eradicated. There was still the challenge of the re-invasion of the vacated sites which the Human Settlements Land Invasion Unit and local community would have to control to prevent the perpetuation of the problem.

Responding to the question on why sanitation was not provided if there was access to water, Mr Martin explained that although there was 100% access to water there were difficulties in providing sanitation to stressed areas due to flooding and other factors.

On the question of the Scientific Services funded by the USDG, Mr Martin said that this was one of the MIG Projects that was rolled out historically and an alternative funding source would be found for the laboratory.

Mr Martin said that there had been a legal challenge in the Wells Estate project and funds were being reallocated to other USDG projects.

Mr Calvin Brummer, NMBM Director: Development and Support, elaborated on the readiness of sites for housing delivery and completed units. He noted that they did not have the statistics on hand including the rectification programme which had come from an alternative funding source, but it could be made available. All of the projects in informal settlements and relocation and the Greenfields development had been budgeted for in terms of the NMBM Settlement Plan. This plan had been operational from the 2008/09 financial year and was rolled out for a seven year period. Originally they had planned to eradicate all the informal settlements by 2014, which had been the national target, but they could not achieve that due to the funding available. They had started with zero serviced sites for top structure construction in the current financial year and this was the main reason why the top structure programme was lagging behind. There were now 1 209 sites available for top structures and housing delivery could commence. 

Eastern Cape MEC for Human Settlements, Safety and Liaison, Ms Helen Sauls-August, endorsed the Deputy-Minister's previous comments and said that what was critical in terms of the USDG was seeing a reflection of where the money was spent. There had to be a correlation between the USDG objectives and the current projects for human settlements. There was a clarity of understanding between the national and provincial levels of government and a paradigm shift was needed at the local level to make the USDG effective.

Mr Brummer elaborated on the challenges that had emerged in the development of St Albans. Bulk Services were installed to ensure readiness for the delivery of serviced sites. They had then received the Record of Decision (ROD) for top structure installation. That ROD was positive but it had underlying conditions that had to be met before implementation could take place. Those conditions included the protection of all 10 identified wetlands and the linkages of water channels with a buffer of 50 metres. No development could thus take place in and around those water areas.

The Chairperson queried the approval of the site for the installation of bulk infrastructure

Mr Brummer said that the first process for ROD was never approved. The requirement was that they had to have bulks before they would be issued a ROD. The former Western Council could not obtain an ROD as the bulks were not in place. When NMBM took over the process they proceeded to get the ROD for internal infrastructure. They received the ROD but it had conditions beyond the normal search and rescue and the protection of certain species requirements. The extra conditions were that they had to protect the water courses and critically endangered ecosystems and biodiversity systems.

The Chairperson asked if the endangered species could not be relocated.

Mr Brummer responded that in terms of the ROD, they could not be moved and the ecosystem could not be interfered with. They had asked for the ROD to be amended (in writing) and they had received a response after a year which stated that it could not be amended.

In response to the Chairperson's question, Mr Brummer stated that the consultants were SRK Consulting Engineers who had been appointed by the Metro to guide the process.

In respect of the Fitch's Corner development, Mr Brummer said the plan was for relocation to Witteklip which was in close proximity and not Kyamundi which was the original plan. This was the best option socially for the community and the proposal was awaiting Council's approval.

Ms Borman stated that there had been no answer to the underspending and the capacity to deliver and that these aspects related directly to the USDG.

Mr Brummer responded to a query from the Chairperson about the families living at the New Brighton tip site. This issue had been prioritised and the plan was for the full relocation of the 3000 families to Motherwell. Close to 1500 sites had been serviced and the families moved and they were progressing to servicing a further 1500 sites.

The Chairperson asked what support was being received from other departments.

Mr Brummer said that the local provincial Human Settlements were originally working with them on the relocation.

Ms Nadia Gerwel, Assistant Director: NMBM Capital Budget and Financial Accounting, responded to Ms Borman's questions on the low spend in the first six months of the financial year versus what was anticipated in the remaining period of the financial year. The Municipality was fast-tracking the implementation of the projects. The bulk of contractors had been appointed by the end of November 2011. They would provide the timeline associated with the projects as well as information on the sites to the Committee.

Mr Chainee said NDHS had had a meeting with the Metro. Because of the seepages out of the Grant, they had narrowed the framework of the USDG and they had indicated clearly that it should go towards slum upgrading, water, sanitation and land purchasing. If Municipalities have to go back and change their plans, they would have to do so because the Grant was directed specifically towards eradication of basic services backlogs, water, sanitation, secure tenure and land accessibility.

Mr Chainee noted that there had to be a better collaborative planning process between the Metro and the Province because the USDG provided the foundation for the Province to come in with its money to build top structure for housing and this required coordination. They did not require permission from the National Department to engage with one another and the NDHS had made available two Senior Directors, Mr W Nkosi and Mr Anton Arendse, to facilitate this process.

Mr Chainee emphasised that Sanitation was a National Priority as articulated by the President and the Minister of Human Settlements. He alerted the meeting to the fact that Nelson Mandela was a Water Services Authority and as such they had a responsibility in relation to the provision of sanitation. NDHS provided the funding and some of the resources to enable them to do so and there were certain standards and specifications which had to be adhered to. He stated clearly that in the Human Settlements Norms and Standards, buckets were not allowed. If they wanted to give the nation dignity, they would have to pay the costs.

The Chairperson endorsed Mr Chainee's statements and said the officials in the Metro had to revisit their planning and that they should submit a progress report within the next two months.

Ms Kota-Fredericks agreed that money could be spent on roads where houses were being built but they should do so using the Public Works Programme where they were able to access funding from the Department of Public Works. In the first instance it would be job creation and at the same time, Human Settlements could recover the funds from Public Works.

 Cllr Desi thanked the Committee for creating the platform for engagement with all role players and this working relationship should continue. They had become aware of the shortcomings in the Metro and this would enable them to make the necessary intervention at the appropriate time.

Cllr Naran echoed these sentiments and said that the meeting had made cooperative governance between the three tiers of government, a reality. He noted that the Metro should become more pro-active in terms of its financial management and to avail themselves of the resources at provincial and national level.

In closing, the Chairperson appealed to the officials to take their duties seriously as they had the responsibility to advise politicians correctly and thanked all those who had attended the meeting.