Housing Development Agency Regulations; Nelson Mandela Bay Municipality progress with Urban Settlements Development Grant

Meeting report

Presentation by Department of Human Settlements
Ms S Ngxongo, Chief Operations Officer (COO), National Department of Human Settlements (NDHS), said that no consultants had been used in developing the regulations, as instructed by the Committee.

Adv Jan Tladi, NDHS Chief Director of Legal Services, said that Priority Housing Development Areas (PHDA) Regulations were now being tabled in front of the Committee as required by the Act. A formal request had been made to the Minister for the approval of the tabling of the regulations. The office of the State Law Advisor (SLA) had also been approached on whether the regulations were ultra vires to the Act. The SLA would pronounce on this. Amendments would be needed if this were the case.

Mr Taffy Adler, Chief Executive Officer, Housing Development Agency (HDA), explained that there were four stages in the implementation of a PHDA. These were the preliminary declaration, the consultation process, the declaration and the implementation phase.

Mr Adler said that were seven chapters to the regulations. Chapter 1 dealt with interpretation. Chapter 2 covered the declaration of a PHDA. Chapter 3 listed the steps in creating a priority housing development plan. Chapter 4 was funding, which was important as it dealt with the funding considerations. Chapter 5 dealt with the implementation of the protocol and the implementation of the housing development. Chapter 6 dealt with cooperation between the different state departments. Chapter 7 was a general chapter, dealing inter alia with protocols.

Mr Adler reminded Members of the framework of the plan. A preliminary declaration would be made. The next process was declaring a PHDA. A submission would be made to the Minister and then closure would be obtained. At present, the draft regulations had gone to the policy department of NDHS and to the technical committee of Minister and Members of the Executive Committee (MEC) (MinMEC). Further consultation had been requested with both provincial and local authorities. The SLA would express a legal opinion. He hoped to see the regulations published for public comment by July, and finally tabled in September.

Discussion
Mr S Mokgalapa (DA) welcomed the regulations and the non-use of consultants. The first priority was to ensure that the aspect of inter-governmental relations (IGR) was handled correctly. He asked what the criteria would be for funding. He asked if this would be in the form of conditional grants or would come from provincial and national treasuries. He noted that the Minister had to concur with the proposed development, and asked how IGR would work if the Minister was not totally satisfied. On implementing agents, he asked what the rationale would be for ceding this function to a third party. He asked if these would be private bodies, consultants or local authorities.

Ms M Borman (ANC) had gone through the presentation quickly. She wanted to understand more about the priority housing implementation plan, as there seemed to be some repetition. She was concerned about beneficiary lists.

Mr R Bhoola (MF) asked for more clarity on the appointment of implementation agents. The legislation was long overdue, but he asked if there was anything that would destabilise the legislation. There might be some conflict with other departments. He asked who would be responsible for the finalisation of the beneficiary list.

Ms J Sosibo (ANC) asked who the stakeholders would be.

Mr Adler said that the PHDAs would only work if all the stakeholders were on board. He envisaged, as had happened in a variety of projects, that the first step would be the identification of land. NDHS would then talk to the responsible authority, as any development would have to fit in with that of the local or provincial authority. The initiative would come from one of these groupings unless it were a national priority. The next process would be evaluating the current land usage and its suitability for development. The Minister would only endorse the plan if all authorities were satisfied. The steering committee would give political guidance and the implementation committee would include the stakeholders. The steering committee would meet quarterly and the implementation committee monthly.

Mr Adler agreed that IGR was essential to deal with funding issues. He hoped that the implementation plan would involve up to eleven streams of funding, including transport and schools. He acknowledged that it was a big hope that everything would fall into place, as had happened with the Zanemvula project in the Eastern Cape. The funding and infrastructure should be in place before the plan was put into place. Funding should be committed for a three to five year period, using the current grants. Local government would play a paramount role, as the lack of support in several cases had led to big problems.

Mr Adler said that once the plan was endorsed, funding would be secured. There would be collaboration between the three spheres of government, and then only would it be put to the Minister. This process would take up to a year. Once the plan had been approved the development would start, starting with streets and bulk infrastructure. Housing and other services would follow, possibly followed by industry.

Mr Adler said that the preliminary declaration would follow approval, followed by the declaration. Any conflicts between departments should be resolved. The issue of beneficiaries would emerge in the plan, governed by local government processes. There would be different process for greenfield developments to upgrades of different sites. Where residents had to be moved there would be another process. While NDHS would like to be the implementing agent, there was often contestation. The implementation agent would work with the contractors on site. The Department would love to fulfil this role, but this might not be realistic.

An official of NHA said that there could be various budget votes that would impact on a PHDA area. There might be allocations from the NDHS vote. The assumption was that all relevant housing institutions would take part. There might be financing from the education and transport votes, for example. The policy went into some detail on the PDHA. It should be big enough not to be a housing project, but not big enough to be a new municipality. An area of about 100 hectares would be ideal. Mixed used might be appropriate. Housing would be secured for beneficiaries within this area. The repetition in the document might be due to typing areas.

Mr Gaster Sharpley, Head of Department (HoD), Human Settlements Eastern Cape (EC), said that where provinces suffered was in securing the other services needed to ensure a human settlement. The mandate for provinces was clear, as it was for the other spheres, but the provinces had greater responsibility than the other spheres. It served government better if it sourced land itself, while it was also good if there was an agency involved. There had been a cry for schools and other services in a development in the EC. The Minister had made a number of interventions in the country. There was absolute confusion with the Douglas redevelopment in the Buffalo City metro, where people had been moved away and were now returning.

Mr K Sithole (IFP) asked if the three to five year period would be a fixed time.

Mr Mokgalapa said that these developments should not become 'white elephants'. The only issue would normally be funding. He asked at what stage funding would be committed. This should be at an early stage. Sanitation was still a problem where three departments had an interest. He was not convinced that the grant system would be sufficient. The turnaround time was too long as governments could change and Presidents could be recalled in this time. The issues of responsibility were too open-ended for his liking. Commitment was needed, and there should be some streamlining.

Mr Bhoola said that one of the current challenges was projects stalling. In light of the challenges to provincial departments, land was found to be suitable and feasibility studies were conducted. Acquiring the land then became a problem. He asked if HDA would have the powers to ensure that the projects became a reality with the expropriation of land. The MinMECs would have a directive to ensure that projects became a reality. As all departments were represented in this forum, this would be an appropriate place for agreements to be concluded.

Mr Borman also felt that the arrangements should not be left loose. Proper planning was needed in terms of the NDP. She agreed that the three to five year period was too long. The EC example showed how eleven departments were needed to integrate their efforts, and the plans had to be correct from the start. Shortcutting the process would lead to necessary facilities being left out. She asked if it would be a re-invention of the wheel as a number of structures had already been put in place. The public hearings would be very important in assessing the regulations.

The Chairperson said that the issue of beneficiaries was termed loosely. 'Community participation' could be interpreted broadly. When preparing a development, the community should be prepared as a whole rather than just the residents of an affected area. Training was needed to help the residents to take part in the development. The draft regulations did not seem to be speaking to this. Change was needed. The role of the NDHS in training artisans should receive attention. Hands-on management was needed. On the red tape issue, government must know what it wanted. All provinces and metros attended the MinMEC. PHDAs would be identified at a metro level. If authorities did not agree, decisions needed to be made. A dispute mechanism would be needed. Time frames must be set for each step in the process. The Act was clear on expropriation, and she asked why the Act was not implemented. The Act was not being developed, but being implemented. The regulations only had to describe how expropriations should take place under the guidance of the Department of Public Works (DPW). The relationship between NDHS and DPW should be described in the regulations.

The Chairperson asked when the process of securing funding would start. Departments were failing to collaborate in planning. She asked what role the national Department was playing in the planning process. The plans of provinces and municipalities should be in accordance with the requirements of NDHS. A time needed to be set for the submission of plans. NDHS needed to think out of the box. The Committee would still deliberate on the draft regulations, and would discuss them with NDHS at a later date. The purpose of this meeting was the tabling of the draft regulations.

Mr Adler welcomed the inputs made. It was clear that the implementation was more important than the framework. He agreed with Mr Sharpley on pilot programmes. In terms of the national departments and priorities, HDA should be seen as a tool of government. In the HDA strategic plan, there had been a target of two PHDAs. These would need to be the responsibility of some provincial or local authority.

Ms Ngxongo said that all three spheres of government would be involved, and this stressed the need for Memorandums of Understanding (MoU). Housing authorities would need to be reflected in the plans of all spheres of government. Once a priority area was identified, the priorities had to be reflected in those of all relevant departments. Another point to be emphasised was that if the planning was done correctly, it would assist during the implementation phase. Planning should not go on forever, but must not just be an exercise.

Mr Anton Arendse, Chief Director, Human Settlement Planning, NDHS, said that the point of collaboration with other spheres had been covered. It was about strengthening the hand of local government. Local development planning should not happen in isolation, but should be in line with provincial and municipal plans. The scale was greater than developments affecting 100 households. The projects would be enormous, and a decided mind-shift was needed. On funding, there was already a precedent in the Division of Revenue Act (DORA) which referred to priority projects. This would be a way to ring-fence finances.

Adv Tladi explained the process of obtaining Ministerial approval to table the regulations to Parliament. The process of public hearings would run in parallel with other processes. The Minister was known to move quickly, so he anticipated no unnecessary delays. However, proper process had to be followed in submitting the document to Parliament.

The Chairperson said it would be best to set a deadline. By 12 June 2013 the NDHS must submit the regulations to Parliament.

Adv Tladi said that this would be done.

Nelson Mandela Bay Municipality progress report on Urban Settlements Development Grant
The Chairperson thanked the MEC for her commitment to her constitutional responsibilities. There had been much interaction between the province and the Committee since 2009, and although the province was not there yet, they were moving towards compliance with the requirements of the Committee.

After introductions, the Chairperson said that the Committee had not been satisfied with the performance of the Nelson Mandela Bay Metro (NMBM). It was disturbing that there were so many management staff in acting positions. Another major issue was that of sanitation. The issue of the bucket system was a serious concern. The Committee was not happy with the response of the metro, which seemed to be embracing the bucket system while waiting for NDHS to find a solution. Members were perturbed, as when they visited an area and identified critical issues, they expected the issues to be addressed. Public funds were being spent, and there was a Constitutional mandate. Some action was needed in the metro. For example, Members had visited Maramba Extension 6. Although there were public taps, people were digging holes as there were no toilets in this area. The metro did not seem to be prepared to address this issue. The metro did not understand the purpose of the grant for addressing infrastructure challenges related to human settlements.

The Chairperson said that although the budget for human settlements was being spent, it seemed that the money was being used for different purposes other than the intention of the grant. She appreciated the presence of public representatives. They had an obligation to serve the public.

Ms Helen August-Sauls, MEC for Human Settlements, Safety and Liaison, EC, thanked the Chairperson for the invitation. She would not disappoint the Committees. The tide was being turned in the metro. More than 100% of the Urban Settlement Development Grant (USDG) had been spent. Contractors were on the ground, and the full subsidy should be spent by the end of June 2013. A macro-structure had been set up. Human Settlements would drive the disbursement of the grant. The province had instructed the metro to phase out the bucket system. There were still 25 000 households using buckets and the number of informal dwellings was growing. The USDG should be properly aligned to human settlement, and she hoped that their presentation would be aligned to this. There were challenges in the metro. 95% of the protests were due to housing issues. Some 35 000 housing units had to be repaired, and in many cases it would be more economical to demolish units rather than make extensive repairs. There was a new eagerness to give leadership, and display a positive image of government. The tide was being turned. The relationship between the province and the metro had improved drastically. The metro was moving from a Level 3 towards Level 2 status. She hoped to be able to make such a recommendation by the end of July 2013.

Mr Balu Naran, Member of the Mayoral Committee (MMC) for Finance, NMBM, apologised on behalf of the Executive Mayor and Deputy Mayor.

Ms Lineo Nkanjeni, Acting COO, NMBM, gave an outline of the presentation. At Fitch's Corner there were approximately 95 shacks on a cemetery site. This site could not be serviced. There were plans to relocate these residents to St Albans, but this had not been possible. The plan was now to move these people to Witteklip, where a site had been donated. There was environmental approval for this move, but the plan for bulk services was still pending approval. Once this was granted, she estimated fifteen months for the construction process.

Ms Nkanjeni said that the Grogro settlement was on private ground. There were endangered species in the area. The land fell outside the municipal boundaries and this was promoting urban sprawl. A site had been identified at Kyamnandi, but residents were reluctant to move thither due to transport challenges. An alternative site had been identified at Hunters Retreat.

The Chairperson called a short adjournment, as the copy of the presentation given to Members was incomplete.

Ms Nkanjeni apologised for not sending the updated presentation.

Ms Borman interrupted, as it seemed that some of the slides on Fitch's Corner had not been included in the updated presentation given to Members.

Ms Nkanjeni explained how the document had been updated.

The Chairperson was not satisfied. The meeting had been postponed on a number of occasions, and the metro should have been ready with its presentation.

Ms Borman felt that the meeting could continue, but wanted assurance that all the other relevant information was included.

Ms Nkanjeni promised such a situation would not arise again. Continuing with Grogro, there was an issue with land transfer, bulk services and town planning. The solution was the N2 development in Hunters Retreat. The municipality owned the vacant land, and there was a transport upgrade plan. There were work opportunities in the area. Provision would be made for mixed ownership. The draft engineering services report was being prepared. An environmental study was being conducted. Relocation should be done within 24 months if all approvals were granted.

Ms Nkanjeni said that with Malabar Extension 6, there had been a complaint from existing residences that low-income housing was not suitable for this area. The bucket system was still in force. Consultations were under way to convince the residents of the benefits of development. Housing construction would be between twelve and 24 months. Communal stand pipes would be provided for water. Access to the site was difficult, and interim roads were being upgraded.

Ms Nkanjeni said that on bucket eradication, an environmental study had been conducted. The sanitation issue should be addressed within two months after a decision had been made. A two pronged approach would be followed. A pilot phase had been completed in Malabar. Some 1200 houses had been built. By May 2013 about 150 buckets would be eradicated in Silvertown, New Brighton and Rolihlahla Mandela pending the completion of internal plumbing. Some 3 647 sites were being service for formal houses.

Ms Nkanjeni said that on internal roads, contractors were on site and the metro was doing well. About 10 km of roads were being constructed. Road plans for the forthcoming financial year (FY) were being drawn up.

Ms Nkanjeni said that there was an MoU between NMBM and HDA. Several parcels of land had been identified. The land audit had been completed in 2006. All vacant municipal and state land had been identified. Maps were available, and there was information on undeveloped areas within the metro. The land audit had been linked to the Land asset Management and Control System (LAMACS) and the city's billing system.

Ms Nkanjeni said that projects had been completed in several areas. There were ongoing projects, and in some areas land was being prepared for development. Supply chain management was receiving attention. A number of committees would focus on the built environment. Senior management positions had been advertised in 2013, to be filled by August.

Discussion
The Chairperson asked the delegation to leave the room while Members engaged in political discussion.

An NDHS official said that NDHS had conducted provincial reviews. The issues raised by NMBM had not answered the instructions given by NDHS. The presentation had been sent back twice. Nothing was being done to eradicate backlogs. Statistics South Africa had released the results on sanitation in Silvertown, and it was not a good picture. The NDHS would not acquiesce with the matters being raised.

The Chairperson complained about the changes that the delegation sought to effect especially as they knew long ago that they would be appearing before the Committee. The meeting had been postponed three times. As things stood, it would appear that the delegation had just been woken up and sent to Parliament. The date was communicated to the Metro a while back. The Committee expected the Metro to be ready now.

Mr Sharpley had met with the metro the previous week. One of the issues raised by the MMC was a disjuncture between the municipal officials charged with human settlements and the rest of the Council. The provincial department wished to support the metro, but could not do so at present.

MEC August-Sauls had interacted with the MMC, warning him of the areas which would be raised by the Committee. The presentation should show how service backlogs were being addressed. The presentation was compliant with the template, but there was no indication of eradication of backlogs. Perhaps this had been the intent of the municipality, but only 15% of the grant was going towards the upgrade of informal areas while the rest of the grant was spent on infrastructure such as roads. It was unfortunate that a summarised version of the presentation was prepared on the eve of the presentation. She urged the Chairperson to continue with the meeting, but to guide the delegation on the direction that was expected.

The Chairperson had assumed that on USDG and the Human Settlements Development Grant (HSDG) in particular, NDHS, the provincial department and the municipality were tasked to work together on a report for Parliament. One set of reports was needed. Still the report was fragmented. When a metro came to Parliament, it would be better if there was one report and it could be noted if there had been areas of disagreement between the different spheres. It would be better if there was a report, and identify the areas that had not been agreed to by the various spheres of government. The Committee could then provide guidance. There was no way the Committee could continue with this kind of a report.

Mr Andile Mfunya, MMC for Infrastructure and Engineering, NMBM, felt that he had been covered. There had been a meeting on 3 June 2013. The response from the housing department was based on the minutes of that meeting. It was clear now that there was a need to meet with the provincial and national departments. He had been embarrassed at previous meetings with the Chairperson.

The Chairperson commented that the challenge was mainly the turnover of leadership which resulted in instability, and this made the work of the Committee difficult. The presentation had been done; the Committee did not need another presentation. On the issues that were raised Members had to assist, especially as it pertained to Maraba, Grogro, and Fitch’s Corner. These issues did not start during this term of administration; this was an old story. And officials kept coming back to say the same thing. The land was purchased by government in 2007.

Mr Matshoba interjected and said in 1998.

The Chairperson said the issue was really old. The Committee was there in 2009 and found people staying in a cemetery. The officials were not serious; the land was transferred to the Department in 2011, and yet nothing had been done on it. The Committee wanted a report as to what was happening there. Following the Department’s failure to clarify an issue involving an Environmental Impact Assessment (EIA) consultant, the Committee recommended that the Minister needed to intervene. The Committee wanted to know what became of that process. DHS funding had been spent on an EIA. The Department should indicate how far that process had gone. People of Grogro indicated that the piece of land they occupied was handed to them by Mr Van Rooyen who was the owner. They were advised to go find Mr Van Rooyen and they could not. Subsequently, the Housing Development Agency (HAD) had then been instructed to locate Mr Van Rooyen. Despite various Ministers visiting the area, and making promises to the people, nothing had come to fruition. The Committee simply wanted to know what was happening with that piece of land. The story had somewhat changed today - that construction could not happen ias it was a privately owned farm. The tendency and attitude of the Metro had been to disregard the poor. Maraba Extension 6 was a joke. The Committee was now being told that some community members were blocking construction. In-situ upgrading needed to happen there, and those that could not be accommodated should be relocated. Where did people get a right to block development? This was not the first development of its kind; if integration of people did not happen in Maraba Extension 6, where would it happen. The Committee could not accept this report. The Chairperson requested that the delegation go back and work on the issues.

Mr Buysile Mkavu, NMBM Portfolio Chairperson, Integrated Human Settlements, had come into the department two months previously. He noted that a lot was not being done correctly, including the use of the USDG for other purposes. He had instructed that these practices cease. The Council had resolved to buy land, but this had not been done. The officials responsible were being dealt with by the City Manager. He was waiting for the Manager to act. It seemed that the department was only providing problems and not solutions. He had managed to do a lot in two months. Money intended for use in Walmer had been utilised elsewhere.

Mr Naran had been disappointed to see the report on Malabar. It was not a debate on integration, as the policies of the ruling party were clear. He did not know why there had been no movement on this. It made sense to put people in formal housing rather than their current conditions.

Ms Sosibo said that the Committee had sent back delegations before. Money was being budgeted to eradicate the bucket system, and government could not tolerate these funds not being used for the prescribed purpose.

Ms Borman said that the visit to the Committee had probably cost about R40 000. This money would now be seen as a waste. She pleaded with the politicians from the area to be more proactive. The purpose of the Committee was oversight, and it did not help that provincial politicians came to the meeting uninformed. Members wanted to know what the USDG was being spent on. Parliament did not have all the details, just the amounts allocated for the infrastructure to build houses. Parliament had to play an oversight role, but could not do so without the proper information. She proposed that the meeting be ended, and it would be better if the Committee visited them. Teleconferencing was also an option.

Ms N Njobe (COPE) had attended a briefing by the Auditor-General where officials had been criticised for not acting decisively. Members could not sit back and hope for the best. This did not necessarily mean throwing people out. There needed to be empowerment. Some people had potential, but were not quite ready for the work entrusted to them. In reading through the presentation, she had found a lot of shortcomings. The explanation of the use of the USDG covered three pages in the presentation, where it would be easier if these had all been displayed on a single page. It was important to help these people. The people must learn. Even Members should be learning every day.

Ms M Mnisi (ANC) said that the information provided was scanty. More detail was needed on interventions. There was a serious disjuncture and a lack of synergy and coordination.

Mr Mokgalapa felt it was clear that this visit by NMBM had been fruitless expenditure. The Committee had used taxpayers' money to visit the EC, but the presentation made as a result of their visit was unacceptable. Parliament would say that this Committee was a joke if this report were to be presented to Parliament. No services were being provided in several areas. He appreciated the political heads being presented, but these officials needed to exercise oversight. On one visit the provincial legislature of Mpumalanga had not accompanied the Members. Oversight was a weakness at local level.

Mr J Matshoba (ANC) criticised certain municipal officials for not being available to answer the queries of Members. Officials needed to be instructed to conduct oversight.

The Chairperson wanted to close the discussion. She liked to work with officials, but once that person gave incorrect advice she could have no more time for them. Trust was essential. She did not trust the NMBM officials, and felt that they were dishonest. Politicians always took the blame for lack of service delivery, and not the officials responsible. She appreciated the work being done by provincial and municipal officials, but more was needed. The financial year was at an end. The Committee was there to assist provincial and local government. It was a sad situation, but harsh action was needed.

The Chairperson called for the return of the NMBM delegation. She told them that the Committee was not satisfied with the report. The fact that some issues had been excluded told Members something. The Committee had requested a single report on the USDG and HSDG, and on utilisation of the budget. Any differences of opinion should be reflected in the report. Proper discussion was needed on any report before it was tabled. Officials must advice politicians correctly so that informed decisions could be taken.

Meeting adjourned.