Department of Human Settlements Annual Report 2009/10

Meeting report

Annual Report of the Department of Human Settlements 2009/10
Mr Neville Chainee, Deputy Director General (DDG) and Chief Operations Officer (COO), Department of Human Settlements (DHS), presented an overview of the Department’s focus and highlights for 2009/10. He highlighted that it was the aim of the Department to determine, finance, promote, coordinate, communicate and monitor policy in respect of housing and human settlement. No less than 27 municipalities had been accredited to carry out and plan, budget, support and implement housing programmes for the development of human settlements. Public land in the form of 6 250 hectares had been released for the development of human settlements, including land in the provinces and municipalities. During the period under review, the Department developed a conceptual document on the implication of the name change from Housing to Human Settlements. The Department entered into agreements with the Platinum Mines for possible roll out of projects in Limpopo and North West. It negotiated the signing of the agreement with the Department of Public Works (DPW) which gave it first right of refusal on any land being considered for disposal by the DPW.

The newly established Housing Development Agency (HDA) became operational in the 2009/10 financial year. The municipal accreditation programme became operational with the assessment of six metropolitan municipalities and four district councils. The Ministers and Members of Executive Council (MINMEC) met with the Minister of the Human Settlements in February 2009 to approve the new National Housing Code, which aligned housing policy and programmes with the Comprehensive Plan for the Development of Sustainable Human Settlements. The Farm Residents Housing Assistance Programme was approved by MINMEC and incorporated into the new National Housing Code, 2009.The policy framework for the Housing Programme for persons with special needs was completed but still needed more discussion with the Department of Social Development.

Mr N Mlenza, the acting Chief Financial Officer (CFO) of the Department, presented the Financial Performance for 2009/10. The Department allocated R13.605 billion to its five performance programmes. These programmes included Administration; Housing Policy, Research and Monitoring; Housing Planning and Delivery Support; Housing Development Finance; and Strategic Relations and Governance. The total expenditure on the five programmes was 98% of the budget allocated with R234.444 million unspent. Under-spending was due to cost saving measures which resulted in savings on goods and services. Savings were realised by the reduction of travel and substance expenditure and expenditure on advertisement. Under-spending was also the result of a delay by the Special Investigating Unit in producing and submitting the last invoices for the year.

The non-availability of additional office space resulted in some vacancies not been filled and the expenditure associated with posts could not be achieved. No funds were utilised of the R50 million which was provided for the community outreach programme. An amount of R34.9million could not be transferred to the Social Housing Regulatory Authority as the process of establishing the institution could not be finalised by the year end. The amount that was allocated to all nine provinces was R12.592 billion and only 98% of the allocated amount was spent.

Mr Chainee presented the Department’s challenges, which included systems; natural and macroeconomic variables; beneficiary management; current human settlement conditions; basic services; urbanisation and demographic trends; and the impact of macro conditions on human settlements.

Discussion
Mr D Feldman (COPE, Gauteng) noted that the Department had highlighted all the various challenges and asked for more detail on the achievements.

Mr H Groenewald (DA, North West) asked for details on the achievements of the Risk Management Committee. At times, the Department had made empty promises. Buildings were poorly constructed while many houses were half built and unoccupied. He said that it seemed as if the Department was struggling to exercise control and management over the construction process. He asked how many houses were built in the 2009/10 financial year and how much money was spent on all provinces.

Mr R Tau (ANC, Northern Cape) asked for the exact location of all municipalities which received accreditation to carry out, plan, budget for, support and implement housing programmes for the development of human settlements. He also asked which provinces and municipalities received 6 250 hectares of public land for development. More information was required on the agreements for possible roll out projects in Limpopo and North West between the Department and Platinum Mines. It was the year 2010 and Lerato Park in the Northern Cape only had 50% completion of roads. The lack of service delivery in regions like Lerato Park reflected badly on the Select Committee. Mr Tau asked what was happening in those regions.

Mr M Jacobs (ANC, Free State) requested a comparative table to measure the improvement in the Department. The Department should speed up the process of accreditation of municipalities. He asked for the areas where cases had been investigated. He asked for more clarity on the Farm Residence Programme; and the expenditure of the Department.  On the issue of rapid migration from rural to urban areas, he asked why the Department did not invest more in research that would help it identify the movement of the people more effectively.

Mr Tau asked what the Department did to make land available from tribal authorities for development. He said the Minister had made an announcement on the policy of the size of houses. He asked if there was uniformity or a national policy on the size of houses.

The Chairperson asked if the systems could speak to one another in the current arrangement. He blamed some constructers as the culprits who caused flaws during building. He asked who constituted Risk Management and when it was revamped. The unspent money was a serious concern, because people were protesting for housing and service delivery. The money was available but it was not used for its intended purpose. Proper auditing would assist in proper development. Many projects were uncompleted and the Department did not say anything about those projects. The Chairperson requested additional information on what the Department had done to ensure the completion of the many unfinished projects since it had changed its name from the Department of Housing.

The Department asked Members to refer to its second document, which would answer most of the questions asked. The Department had achieved an unqualified audit.

In response to other questions, the Department offered to present details from the respective provinces at a later stage. On the Risk Management Committee, the Department indicated that it was mandatory for the Director-General and the Deputy Director-General to attend those meetings. The Special Investigating Unit (SIU) was examining cases of contract fraud and poor construction in all provinces. The 27 municipalities which obtained accreditation derived from six metropolitan municipalities while the rest came from 21 local municipalities. The Department was working in collaboration with provinces and Members of the Executive Councils (MECs) to determine which municipalities should receive accreditation; auditing was undertaken about all public land.

The Department requested an opportunity to present a written presentation about the agreements between the Department and Platinum Mines. It would also provide a full report to the Select Committee on the issue of Lerato Park in the Northern Cape. The issue of bulk infrastructure deficiency was a national problem which affected most regions in the country. Bulk infrastructure should not be funded by the grant.  The Department asked the Select Committee to examine the issue of bulk infrastructure in its budget allocation. The minimum size of houses should be 40 square meters but provinces could increase the size if they had the budget. An agreement was signed with the Department of Rural Development and Land Reform on the notion of tribal land. The agreement covered issues around communal and tribal land, and successful engagement had been achieved in some provinces.

Mr Thabane Zulu, Director-General (DG), DHS, referred to Outcome 8 as a tool to assist where “systems were not talking.” The Department tried to align its work with provinces and agreements had been signed for targets to be reached. Most incomplete projects were caused by problems with bulk infrastructure and the lack of proper planning.

The Chairperson asked why the whole budget was not spent and what role the Department played in the “toilet saga” in Makhaza, Cape Town.

Mr Jacobs asked if the Department had researchers and whether inspectors were inspecting the quality of the houses. He also requested additional information on the farm housing projects and the cases which were investigated by the SIU.

Mr Zulu indicated that the Department had a Chief Director of Research and Policy Formation. Inspections on houses were done by the National Home Builders Registration Council (NHBRC) as well as by the provincial and municipal Inspectors. The farmworker residence project provided a policy framework but the Department was still looking at ways of implementation. He proposed to provide a presentation on all the SIU cases under way.

The Chairperson expressed his dissatisfaction with Platinum Mines. He said that the Limpopo region had many mines with housing problems. Most mines made empty promises to provide housing.

Mr Tau asked for more detail on the difficulties at the N2 Gateway and Khutsong projects. He asked about the progress of the implementation of agreement goals and said issues regarding bulk infrastructure were reported initially.

Mr Z Mlenzana (COPE, Eastern Cape) asked for clarity on the Annual Performance Report and on the meaning of the words “performance not determined” (page 18). He asked what the difference was between the servicing of the sites and the houses which were built. He asked about the relations between the Department and the SIU. He requested an explanation on the disaster relief fund, how it worked and why only KwaZulu-Natal had received the fund.

Mr Feldman said there were so many programmes and structures which did not fulfil their core purpose. The Department needed a change of mindset.

Mr Jacobs asked why the number of sites did not match the number of houses built, and who serviced the sites.

The Chairperson indicated that all questions and comments should be treated very seriously. He noted that support could not be provided by the Department due to a shortage of staff. He asked why there was a staff shortage and requested more information on gender equity. All these challenges had a negative impact on service delivery and the effectiveness of the Department.

Mr Zulu apologized for not providing one of the documents on time. The Department would make a comprehensive presentation to the Committee indicating what had been done and achieved through the investigated cases. The Department enjoyed a good, sound and progressive relationship with the SIU. It had periodic meetings where it discussed various issues. The vacancy rate of 20% posed various challenges to the Department’s effectiveness. The Department did not want to fill posts for the sake of filling them, and some existing vacancies had been reviewed. The issue of mindset change had become very critical to the Department. It recently held a conference lasting three days aimed at networking, knowledge exchange, and benchmarking best practices. The Department was looking at alternative technology and therefore was taking advantage of the “mindset change.”

The Department said that the issue of the N2 Gateway had been completed. It asked for an opportunity to give a full presentation on Lerato Park and the Mining projects. The correlation between sites and houses were changing rapidly as more houses were built. KwaZulu-Natal had suffered from a series of disasters such as hurricanes and this had resulted in disaster funds being made available.

Mr Mlenzana asked whether the Department had mechanisms to monitor and examine its ability to assist during disasters.

Mr Jacobs asked if “sites” and “buildings” were one or two packages.

The Chairperson said that the Department was ignoring the issue of public and private rental. Some buildings were owned and revamped by Government, yet illegally occupied. He asked what the Department did to ensure that buildings were occupied legally.

Mr Zulu replied that he would provide detailed information on what had been done to rectify flaws on the various projects. The disaster and national relief fund was determined by proclamation and declaration by premiers. Disaster or relief management was managed by corporate government. The planning of sites and services were dependent on provinces and their municipal areas.

The Chairperson said that the Department would follow up by providing more information as required.

The meeting was adjourned.