Chairperson, as Minister of Human Settlements, I need to say that to build a house, you need a plot. I hope all of you have your own plots. [Laughter.] Greetings to the hon members, invited guests, ladies and gentlemen, everyone in the nine different provinces listening long-distance to this Budget Vote, comrades and friends, the President of the Republic, Mr Jacob Zuma, made the following observations during his state of the nation address in February this year, and I quote:
Whilst many South Africans celebrate the delivery of houses, electricity or water, there are yet many others who are still waiting. The legacy of decades of apartheid, underdevelopment and colonial oppression cannot be undone in only 17 years.
Subsequently, the Minister of Finance, Pravin Gordhan, during his Budget Speech stated the following, and I quote:
Total spending on housing, water, electricity and community amenities amount to R122 billion for the 2011-12 financial year, rising later to R138 billion in the 2013-14 financial year.
Consequently, our goal of creating sustainable human settlements is steadily taking shape, albeit a far distance from where we ought to be. Thus, we note the following: a Human Settlements budget beyond housing is practically emerging with improved co-ordination. There is greater clarity on the nature and severity of the problems confronting the country's residential drive. The accelerated delivery of quality houses remains undiminished.
Let us look at the period under review. The President and I signed a performance agreement, namely the sustainable human settlements and improved quality of household life, otherwise known as Outcomes 8, which encompasses the following: accelerating the delivery of housing opportunities, access to basic services, effective utilisation of land and improved property market. Let me briefly deal with each of these deliverables.
Regarding the upgrading of imijondolo, the slums or informal settlements, out of a total of 2 700 that exist countrywide, 1 000 of these have been identified for upgrading. The formalisation of 206 of these informal settlements has been completed. A further 335 are in the pipeline.
The National Upgrading Support programme is currently being rolled out to ensure that 49 municipalities have the necessary capacity. South Africa's population is just under 50 million people, more than half of which is urbanised. Our strategy on urban planning and development is therefore undergoing a radical shift in order to adequately respond to urbanisation.
Many job seekers in urban areas are not looking to stay in a permanent home but are seeking rental accommodation. Thus, there is an increased demand for affordable and well-located rental accommodation.
We have developed a project pipeline with a mix of public-private sector rental stock. The following are examples: the Umlazi community rental unit programme in KwaZulu-Natal, the Brooklyn social housing programme in Cape Town, Amalinda institutional housing subsidy in Buffalo City, the Cavendish inner-city private sector rental in Johannesburg and a small-scale private rental stock for backyard dwellers in Zola Township in Soweto, where I come from, in Gauteng.
All of these are aimed at creating 80 000 rental opportunities by 2014. The leadership of the Social Housing Regulatory Authority, SHRA, established last year, must continue to play a key role in all these efforts. As their Minister I want to say a great deal is expected of the Board of SHRA.
It is important to note, under this deliverable, that all the South Africa's metros, with two district municipalities, have recently been accredited to drive Human Settlements' projects. This means that, for the first time ever, funds will be directed straight from the national department into the coffers of these municipalities respectively. They include the City of Johannesburg, the City of Tshwane, eThekwini Metro, Ekurhuleni Metro, Nelson Mandela Metro, the City of Cape Town, and Francis Baard and Pixley ka Seme District Municipalities in the Northern Cape.
Regarding the improvement of access to basic services, we play a supportive role to the Department of Co-operative Governance and Traditional Affairs in the provision of basic services such as water, electricity, refuse removal and sanitation.
Regarding the effective utilisation of land, I want to say that according to our mandate, the department is expected to acquire more than 6 250 hectares of suitable land by 2014. On a positive note, through our institution, the Housing Development Agency, HDA, led by Taffy Adler, the department has already achieved this target long before 2014. Beyond this, more than 20 000 hectares of land for suitable housing have been identified by the HDA.
Regarding the improved property market, I want to say that by November 2010 the department received overwhelming support in the form of proposals to implement the R1 billion guarantee fund from many private-sector stakeholders. I want to thank all contributors for their submissions. The department found merit in each proposal. While many were useful, we opted for the Mortgage Default Insurance, MDI, as its core implementation strategy. This insurance has great potential to contribute towards the attainment of the 600 000 loans of our strategy.
It is envisaged that the mortgage insurance product will be available through the banks as of April 2012. I would therefore urge the National Housing Finance Corporation and the banks to accelerate the delivery of affordable houses that they have concluded in terms of the Memorandum of Understanding, MOU.
The increased accessibility and affordability of homeownership can help to stimulate the construction sector, which will provide much-needed jobs. This resonates with our economic policy, the New Growth Path.
The material suppliers are cautioned to contain the cost of their products and to avoid any form of collusion which promotes anticompetitive practices. Home builders, particularly the poorest of the poor, may not and should never be exploited. We have established our delivery and accountability structures in the form of the Human Settlements Implementation Forum. Human Settlements is the co-ordinating department of this forum.
Other participating stakeholders are the Departments of Water Affairs, Rural Development and Land Reform, Public Enterprises, Co-operative Governance and Traditional Affairs, the South African Local Government Association, Salga, all the provinces, and all accredited municipalities, as I mentioned earlier.
In relation to the target of approximately 200 000 subsidised houses and housing opportunities, the provinces, despite some major obstacles, have already spent 98% of the funds allocated to them. Our campaign, "Let's follow the money", helped us to be watchful of expenditure trends throughout the year. This applies to both operational and capital expenditure.
In November 2010, a collective decision was taken with all provinces to reallocate funds from underperforming provinces to advancing ones. The benefits of this included a stronger drive and focus on project management abilities; forward planning, including the development of credible pipeline projects, ensuring that the limited resources dedicated to the department and provinces are not forfeited to the national Treasury, and better financial prudence in provinces to eliminate any possibility of overspending or underspending, even including fiscal dumping.
Let me talk about our national hotline. The Department of Human Settlements continues to be a key issue raised by members of the public who call the presidential or ministry's hotline. Housing ranks in the top three issues raised by complainants.
A positive aspect emerging from the presidential hotline is that 99,5% of the more than 5 000 calls relating to Human Settlements have been resolved. In this respect, we would like to congratulate the staff and management, under the leadership of our director-general, Mr Thabani Zulu, who is present here today, for rising to the challenge of responding to the burning questions raised by people who have problems. After all, this should remind us that we are the servants and not bosses of the people. Let us not forget that.
With regard to procurement, an investigation into procurement in the department is also currently under way, with specific emphasis on overpayments to suppliers. In one of the cases under consideration, one supplier, for example, admitted to overpayment and has opted to pay back the department an amount of almost R300 000. Whilst this is applauded, such a situation should not have occurred in the first place. It is important that invoices and payments should be synchronised and nothing must deter us from fighting corruption and rooting it out whenever it manifests itself. Our resolve remains firm in this regard and I will return to this issue later.
Let me deal with impediments and risks affecting the Department of Human Settlements' development strategy. The Special Presidential Co-ordinating Council confirmed and underlined five challenges affecting the creation of sustainable human settlements. These are the following: the need to address the legislative environment that is hindering progress, focusing attention on alignment of critical mandates and functions; the mobilisation of nonfinancial resources, including land, as I indicated; the exploration of alternative funding models; and, last but not least, paying attention to capacity problems, including project management and bulk infrastructure.
Having listed these points, let us now focus on just one, namely, bulk infrastructure. The risk of bulk infrastructure to our projects poses a serious problem. Of all the impediments, none keeps us awake at night more than bulk infrastructure. It poses a real risk to the department's projects if the following infrastructure elements are not in place. You cannot build houses, and you can end up with a plot without houses. [Laughter.] These infrastructure elements are mega water-treatment plants, major electrical power stations, sewerage works for sanitation, extensive storm-water drainage systems and road construction, including street lights. The Minister of Public Works is here and we appreciate that. [Interjections.]
As a consequence, there are projects whose implementation may be impacted negatively upon, for example 34 000 houses in Lufhereng in Gauteng; Zandvliet in the Western Cape, where sewage is a problem; Lephalale in Limpopo; Cornubia in KwaZulu-Natal and Thornhill in the Eastern Cape, which require dams. Nevertheless, on a positive note, the timely introduction of the Urban Settlements Development Grant, which was announced by Minister Gordhan, is a step in the right direction. Quite clearly, more needs to be done. I have got a big job on my hands.
Let's talk about the Human Settlements Vision 2030. In our 2010 budget speech, we introduced the concept and strategy of Human Settlements Vision 2030. Progress is being made in this regard. This includes the national campaign to mobilise all stakeholders. More serious conversations with key private-sector players are under way to urge them to continue to stay involved in the delivery of human settlements initiatives. The department plans to kick-start a national mobilisation campaign so that ordinary South Africans can come forward and say, I too can and would like to contribute. Human Settlements Vision 2030 is essentially about the youth of today, who are the homeowners of tomorrow. A successful round-table discussion with leaders of all major youth organisations in the country recently took place in preparation for a Human Settlements Youth Summit later this year.
Let me talk about deracialisation of residential space in this country, with our troubled past. One of the key interventions of the Human Settlements Vision 2030 is to deracialise the residential communities in South Africa. Instruments within our control will be utilised to realise this. Two such legal instruments are the Social Housing Act and the Estate Agency Affairs Act, which is under review by a Cabinet interministerial committee.
Through the Social Housing Act we have declared 75 restructuring zones in 7 provinces, to enable us to drive inner-city development. That is my passion: to see people occupying these cities that were left open by many people. For the 2011-13 period, R1,2 billion is allocated for restructuring grants through SHRA.
The well-planned inner-city projects that we launched in Emerald Sky in Buffalo City, Tau Village in Tshwane, Cavendish in Johannesburg and now recently the Drommedaris project in Brooklyn in Cape Town are examples of this kind of approach. These initiatives profile important location value advantages. Critical amenities like libraries, police stations, schools, shopping malls, transport interchange nodes and clinics are practically within walking distance. Many of our inner-city initiatives enhance neighbourhoods that already exist. I quote the words of Mr John Titus, a beneficiary at the Drommedaris social housing project in Brooklyn:
This is the happiest day of my life. We are so happy. I did this for my children, to give them a better life. I just know we are going to be so happy here.
Dit is baie duidelik dat die werk wat ons doen vreugde in mense se lewens bring. Ons is bewus dat daar baie mense is wat nie so gelukkig soos die Titus-gesin is nie. Daar is nog baie werk wat voor ons l, maar met goeie samewerking en vennootskappe met die mense kan ons meer behaal. [Applous.] (Translation of Afrikaans paragraph follows.)
[It is very clear that the work we are doing is bringing joy to peoples' lives. We are aware of the fact that there are many people who are not as fortunate as the Titus family. A lot of work still lies ahead of us, but with good co-operation and partnerships with the people, we can achieve more. [Applause.]]
Yes, for those of you who don't know that I come from Soweto, that is our tsotsi-taal [language]. [Laughter.]
The Joe Slovo construction development project, following the sod-turning at the beginning of March 2011, represented a breakthrough in a troubled project, just around the corner here, which has been under the control of the Constitutional Court. The good news is that consensus has been achieved with all those involved. It is also a new example of a densification project utilising government subsidies.
When I visited Joe Slovo in August 2009, uMama Nonqaba Lujalajala sat me down to listen to her pain of many years' living in a shack. The commitment I made to her on the spot was: "Le mini iyeza nakuwe." [You will one day experience the same thing.] As we speak here today, Joe Slovo is a construction site. "Le mini ifikile kuMama Lujalajala nyhani." [The day has indeed come for Mrs Lujalajala.]
Although the Constitutional Court has proclaimed that we must build 1 500 units, on our own we increased that to 2 886 units.
Egameni lika Mama Lujalajala Ndithi Musungxama, Le mini iyakude ifike nakuwe. [On behalf of Mrs Lujalajala, I ask you not to be in a hurry. You will one day experience the same thing.]
Let me talk about what we call the 80-20 split in the Department of Human Settlements in terms of our development grant. As from 1 April 2011, the national Human Settlements budget is allocated in an 80-20 split: 80% to the provinces, as usual, and 20% directed from national level for specific national intervention projects. As a start, the following projects have been identified as national priority intervention projects, funded from the 20%: Duncan Village in Buffalo City, Eastern Cape, Lufereng, Sweetwaters, Khutsong and Diepsloot in Gauteng. I send a message to Mama Mashamaite. I visited her house in Soweto. "Le mini iyeza nakuwe." [You will one day experience the same thing.] I hope she joins me when we do the sod-turning in Diepsloot quite soon, because her house is waiting for her. We have also done research to put money into Cornubia in Ethekwini, KwaZulu-Natal, Lephalale around Medupi station in Limpopo, and Drakenstein in the Western Cape. The investment being made in all these intervention areas is to the tune of more than R800 million in 2011-12 and R1 billion in the outer year.
With our Human Settlements legislative programme, the 2011-12 financial year will see pieces of legislation being taken through Parliament. It includes the Rental Housing Amendment Bill, the Housing Protection Measures Amendment Bill and the Housing Amendment Bill, which is supposed to be realigned with the mandate of Human Settlements.
Let's focus on our budget for 2011-12. The budget for 2011-12 has increased to R22,5 billion, which is a 38% increase from 2010-11 and is expected to grow to R26,6 billion in 2013-14. Over the 2011 medium-term year, the conditional grant to provinces will grow from R14,7 billion to R16,2 billion in 2013-14.
The Housing Disaster Relief grant, which was utilised to facilitate housing assistance in emergency situations, is being discontinued in 2011-12. Over the 2010-11 period, an amount of R1,2 billion has been provided to fund the rural households infrastructure. We are working in partnership with the Minister of Rural Development and Land Reform, Mr Nkwinti.
The National Treasury has provided funding for a new grant, namely the Urban Settlements Development Grant for cities, which will allow eight metropolitan municipalities to improve efficiency to maximise the development outcomes and achieve a co-ordinated approach to built- environment management. Over the 2011 medium-term period amounts of R6,4 billion for 2011-12, R7,6 billion for 2012-13 and R8,3 billion for 2013-14 have been allocated to this grant.
The department's main cost driver remains the Human Settlements Development Grant, together with the new Urban Settlements Development Grant for cities. In respect of these grants, the total allocation of R21,2 billion in the 2011-12 financial year represents about 94% of the department's total allocation.
Let me talk about the fight against the scourge of corruption. Let us turn to this problem which is wasting our time. I wish I was not reporting this to you here. I have a job to do, and it is not to chase criminals. Visible progress has been achieved by the Special Investigating Unit, SIU, led by Mr Willie Hofmeyr. Criminals have been arrested. Corrupt officials and councillors have been dismissed. Monies from incompetent and fraudulent contractors have been recovered. I want to send a message to councillors because an election is coming. People are elected to serve their people. Don't turn government into a business.
The SIU is currently investigating the top 20 questionable contracts nationally, to a value of R2 billion. Two of the investigations into the contracts have been completed and case dockets have been registered. These cases are now with the Department of Public Prosecutions.
Five syndicates - we are not talking of individuals - are targeted in various provinces. In one instance, the arrests were made in Gauteng. One of the suspects arrested is a councillor in Tsakane in the Gauteng area, together with his accomplices. In KwaZulu-Natal, three departmental officials were arrested for selling houses that were part of the enhanced programme. These officials have also been dismissed from the department. The criminal cases in this regard are still pending.
Working together with the premiers in the various provinces and our colleagues, particularly in KwaZulu-Natal, our actions led to the arrest of an assistant director in this department, together with his accomplice, a member of the public, for renting out low-cost houses that did not belong to them and pocketing the money.
I have a message to the people to whom we provide houses: This money is hard-earned. Don't sell these houses and don't provide them as "livestock" for people who are willing to abuse them in this manner. If you do, the possibility is that the law will catch up with you.
One of our stubborn challenges is the rectification of shoddy workmanship. This is work that should not have been done in the first place. It is a waste of resources and time and is costing money. We fully endorse the statement of the Auditor-General when he said, and I quote:
We should establish a mechanism in government to detect these malpractices in time, because investigations are a waste of time when you deal with sophisticated syndicates.