Mangaung and eThekwini metros on Urban Settlements Development Grant: briefing

Meeting report

Opening remarks
The Chairperson welcomed the delegations and said the Committee would receive a briefing on the progress on the Urban Settlements Development Grant (USDG) by Mangaung and eThekwini metros. She handed over to the delegation.

Mr Xolo Pongolo, Member of the Mayoral Committee for Human Settlements (HS), Mangaung Metro, said the metro was mostly rural, and depended on the emerging markets for income. The metro was lacking in infrastructure for bulk services.  This sometimes resulted in under-spending of the allocated budget. For the year in question, the reason for under-spending was partly due to the very late approval of rollover funding.  A rollover was approved only in April 2013, and not much could be achieved, in terms of spending that money within a municipal financial year. The money would be rolled over to the next financial year. The metro would also look to prioritise the issue of White City hostels.

Mangaung presentation
Mr George Mohlakoana, HS Head of Department: Strategic Projects and Service Monitoring, Mangaung Metro, said the infrastructural challenges confronting the metro were limited not only to the provision of houses, but other bulk related services, such as the provision of roads, electricity and water systems.

The metro had conducted an internal audit of the backlogs, and the Housing Development Agency (HDA) had been brought in to assist with the informal settlements development strategy. The strategy would be finalised in July. The extent of the challenge would be indicated in the revised plan.  Following the audit, it had been established that the metro had 28 informal settlements, and all of them had access to water, although some used communal taps. A reservoir would be opened in October 2013, and would hopefully address the issue of water supply.

Of the 28 informal settlements, only seven had electricity. There was no challenge in terms of the distribution, as Eskom was addressing the issue of bulk supply. The metro was not doing well in sanitation. Recent analysis indicated that most of the informal settlements were next to developed areas, and could easily be connected to services.

Mr Mohlakoana said seven land parcels had already been identified, and an eighth one – N8 development - had also been located. About 920 households would be catered for in phase one of the N8 development. The area would cater for high density housing, but there would also be rental stock. There were sanitation backlogs in most of the informal settlements.  Some households still used buckets, but were mostly allocated pit latrines and VIP toilets. About 40 000 households used this form of toilet.  The metro was hopeful it would eradicate these toilets.  Based on the current allocations, the sanitation backlogs would be cleared only in 2018.  In this financial year, the metro had set aside R103 million, and would connect about 3 300 households to better sanitation services. Of these households, 1 000 would be those that used the bucket system. Sanitation was still a big challenge, but the metro had consulted with the Department of Water Affairs (DWA) over the reticulation and provision of bulk services. Mangaung needed to be assisted with funding, and it was hoped that the Strategic Infrastructure Projects (SIP) would help.  Assistance from the USDG for the metro was about R13 million.

Mr Mohlakoana said expenditure, although still lower than what the Committee had demanded, had improved compared to the previous year.  The current expenditure level was 58%, an improvement from the 46% of 2012 around the same time. The metro expected to spend more than 80% of the budget, and current estimates indicated expenditure would reach 86%. The metro would not get to 95%, as instructed by the Committee. There were internal measures meant to improve spending, and those projects that would not be completed had been identified. The metro was aware of projects where rollover funding could be requested.  The National Treasury did not allow rollovers twice, and the metro was alert to that situation. All the projects that had received rollover funding would be completed by the end of June. In terms of monitoring, the projects were being tracked separately to ensure compliance.

As part of the recovery plan, the metro would ensure planning of projects commenced much earlier. Most of the new projects were multi-year, and planning for them had already been done. Expenditure was expected to increase as the implementation phase approached.  Projects were already on the go. The metro had advertised for the recruitment of technical skills, like engineers, but availability was a constraint.

Mr Mohlakoana said the N8 corridor development between Botshabelo and Bloemfontein had commenced.  Land had been released for this eighth strategic development in the metro. The project had about 3 000 hectares of land being developed. The amount of money spent on land acquisition had been lower than expected. Most of the land in Mangaung was public-owned.  The project was being done in collaboration with various other stakeholders, with the ultimate objective of linking Bloemfontein and Botshabelo.  Another project was being implemented in the Botshabelo and Thaba Nchu mode. Emphasis would be placed on developing the two cities.

Discussion
Ms G Borman (ANC) complimented the metro and said there was a huge improvement in the presentation. This clearly was an indication that the officials had worked hard to get things right. It was not easy to turn things around, but it was still a concern that the money would not be spent. She asked if the metro had capacity to spend the money it had been allocated. More funds were being rolled over, and this signalled that more capacity was required.

Ms Borman asked if there was proper planning, because without it there would be problems. Interesting was the start of the infrastructure projects. This was a clear case of putting into practice the breaking of new ground. She warned against having infrastructure plans that did not correspond with the budget. Was there funding to carry out all the projects planned?

Ms Borman noted that sanitation continued to be a worrying challenge for municipalities.

Mr K Sithole (IFP) asked for an update on the progress being made on the White City hostels. He also sought clarity on the rollovers, and commented he found it puzzling that more money would be required if rollovers had been granted. The statistics on the number of informal settlements and service provision were simply not convincing. The situation in Mangaung was not good and warranted improvement.

Mr S Mokgalapa (DA) concurred and said the improvements were happening at a snail’s pace. To achieve only 58%, while the metro was benchmarked to reach 95%, amounted to failure. The metro had failed. The right approach to carrying out work and meeting the targets was simply sticking to the correct things that the USDG was meant for. This was not rocket science. Rollovers were worrying when targets were missed and there was no delivery. He asked why the money was not spent to ensure basic services were provided to the poor people.

Mr Mokgalapa said it could not be accurate that only 58% of the budget had been spent, while there were still people without sanitation. Although there was a slight improvement from last year, the metro had still not stuck to what it should be doing with the grant.  Backlogs were still dramatic, and yet money was not spent. He found it difficult to accept the explanation.

Mr Mokgalapa sought clarity on land acquisition, as the land that was available to the metro. The clearing of the sanitation backlog should be prioritised.  Members were fully aware of the bulk challenges, but the reason the grants were there was particularly to address those. The date of 2018, given as the deadline to eradicate sanitation backlogs, was way too far ahead, especially as an audit on the informal settlements had been carried out. The metro at least had an idea of the extent of the challenge. It was preferable that municipalities overspent the budget, than under-spending and requesting rollovers. The metro should ensure basic services were provided and stick to the basics of the USDG.

Ms A Mashishi (ANC) sought clarity on challenges around sanitation, and shared usage.  If the challenges were caused by capacity, how would they be addressed in the future?

Ms J Sosibo (ANC) commented that it hurt to hear that the bucket system was still used as a mode of sanitation in the country. She said the recent happenings in the Western Cape (where community leaders brought truck loads of faeces to the Provincial Legislature), were just too disgusting. She requested that the metro to revise the eradication date of 2018.  People could not live with the bucket system for four more years -- this was too much.

Ms N Njobe (COPE) noted that while occupation of the White City hostels had started, ownership had not yet been transferred. She wanted to know how the metro would ensure the right people occupied the houses. Occupation was problematic in many housing projects.

Ms Njobe requested that the issue of sanitation be addressed. This was serious.   While upgrading of informal settlements had taken place in the 28 that had been identified, none had decent sanitation. Why was sanitation not addressed in the planning process? The metro should find money somewhere to address the sanitation backlogs. The issue of correct budgeting, as raised by Members, was pertinent. Officials should plan for the right programmes, so that the budget could be allocated appropriately.

Ms Njobe sought clarity on the Bloemfontein Airport, and asked whether future expansion would not be hindered by developing residential areas around it. Would these projects not choke future airport expansion?

Ms N Mnisi (ANC) commented that the success and output of all projects should take into consideration the issue of creating job opportunities. She asked how many local people had benefited from all the projects that the metro was carrying out.

Ms Mnisi sought clarity on the use of the USDG for the development of sports facilities, and questioned whether the grant was meant for such a purpose.

Ms P Duncan (DA) said lack of planning was a general challenge for government.  Without the necessary guidance from national departments, municipalities were doomed to fail, especially in respect of spending. If interventions could be made soon enough, even by the first quarter -- when it appeared municipalities would be unable to spend -- that would improve the situation. She pleaded with the officials from National Department of Human Settlements (NDHS) not to wait until the end of a year, before they came with recovery plans and intervention strategies.

Ms Duncan said the Industrial Development Plans (IDP) and the Spatial Development Framework (SDF) processes were not taken seriously by government and politicians. These included public participation processes, where communities indicated what they needed. Those needs should then be factored into the budgeting process and planning by municipalities. Early intervention to ensure that documents were in place was required.

Ms Duncan asked that the challenge of capacity be contextualised, considering the number of young qualified graduates who were unemployed. She knew a number of unemployed graduates in technical fields, such as town planning. Young people should be encouraged to take up the positions in rural municipalities. She asked the delegation to indicate if the challenge of finding skilled personnel was administrative, or political.

Ms Duncan sought clarity on whether the Environmental Impact Assessments (EIAs) had been carried out on the 28 informal settlements, especially regarding those where in-situ development was preferred. She also asked about the outstanding title deeds. Could the metro provide a detailed report on these, and indicate why they were still not being issued?

Mr M Matshoba (ANC) voiced dissatisfaction with the statement that none of the 28 informal settlements in Mangaung had access to sanitation. What did this mean, he asked?

Mr L Gaehler (UDM) sought clarity on the engineers that were required. Would they be used for earthworks and design, or the actual top structures?  At what stage were these engineers required for the projects?

Mr Gaehler said sanitation would continue to be a challenge in many South African towns, as they had been designed and built for a few people. The delegation should be honest and indicate the extent of the problem as it related to the bulk services.  It was not possible to have 28 informal settlements without sanitation.  Relevant questions needed to be asked.   Did the metro pay service providers on time? This was where service delivery was hampered, because many of the smaller companies were not paid, and thus driven out of the public service. He asked if skills transfer had happened when big private service providers had been engaged on tenders.

Mr Gaehler said another challenge that government faced was that of departments refusing to work together. Departments worked in silos; the challenge of skills would continue for as long as the status quo remained in inter-governmental relations. There were engineers and architects registered in government, and a lot of the youth remained unemployed. He asked if the metro looked to engage Agrément SA – a government entity for materials – on materials used for bulk works. If the metro did work with Agrément SA, were they helpful?  It had become apparent in the public works portfolio committee, where he was also a member, that departments did not use Agrément SA.

The Chairperson sought clarity on the difference between a pit latrine, and a VIP. She said she could not over emphasise the issue of sanitation. The administration was not going to the 2014 general elections with the bucket system being used in all provinces. This was the government’s view and not that of a political party. The suggestion was that only a 1 000 buckets would only be eradicated by 2018.  She cited a sanitation model used by eThekwini Metro as a very good system that could be copied. Even if the model was expensive to implement, it needed to be copied.  The bucket system was simply not tolerable.

The Chairperson sought clarity on the programme that benefited 49 informal settlements, and asked if the metro was not expecting to have a challenge in upgrading them. She proposed that government in general should look at the concept of starting new towns. Mangaung had a functional deeds office, and should look critically at town establishment.

The Chairperson asked about the kind of amenities that were reflected in the report, especially as the metro had indicated it was building 13 community halls, in its previous visit to Parliament. What was the metro thinking -- what was it going to do with 13 community halls? The USDG should address the basic infrastructure, as this was the main challenge when rolling out housing projects. How was it possible that houses could be built without toilets?   How was it possible that upgrades happened without sanitation provision? The toilet was a basic necessity.  Someone might not have a house, but that person still needed a toilet.  It was important that the metro focussed on the purpose of the USDG.

She indicated that the metro could provide written responses to some questions.

Overall response
Mr Mohlakoana said most of the issues raised by Members were comments that would help the metro to improve, and had been noted. The observation by Members was indeed correct, that the sanitation backlog eradication date of 2018 was a bit far into the future, but this was to deal with all the backlogs and not only the bucket system. He agreed that the bucket system was unacceptable after 19 years into democracy.

He clarified that the pit latrines and VIPs were the virtually the same thing, except for difference in ventilation, and acknowledged they were both an unacceptable form of sanitation. It was hoped that the buckets would be removed entirely by no later than 2015. There were about 40 000 pit toilets, and these had to be cleared as well.

Mr Mohlakoana said the metro accepted and understood the comments by Members on the purpose and intention of the USDG. The change of the name from “housing” to “human settlements” sought to address the issue of a fully-fledged human settlements environment. The intention was to address not only the house structures, but also the issue of bulk infrastructure and amenities.

In the townships the metro had the massive task of having to upgrade facilities as well, and money had been pumped in for that purpose. The money had also come from the metro’s internal revenue sources, to complement the USDG.

The Chairperson interjected and said this was the reason that the Committee was emphasising the need for planning. When doing the integrated development plans (IDP)s before the end of each year communities indicated their needs, so the municipalities should have an idea of what kind of resources they required. This needed to be correctly aligned with what was available to the municipalities. Planning also involved approaching other departments and informing them about projects and how they could assist financially.

When a mayor could dictate to officials as to how they should use the USDG, it showed that the officials were not empowered. The metro should be looking at creative ways to source funding, and should approach other departments. She pleaded that the metro should consider using the norms and standards for sanitation in human settlements. The portfolio had its own norms and standards.  The sanitation function had been transferred to the Human Settlements Department, and would not be returning to the water affairs portfolio anytime soon.

The Chairperson said the Committee did not condone the issue of taking toilet waste to the Western Cape Premier’s office. This was the challenge with the non-delivery of services -- public representatives took the blame, while the fault was with the officials.

Mr Mohlakoana said the metro had involved other departments in its programmes and it was receiving funds from them. Through the intervention of the politicians, the Free State sports department had set aside over R100 million for sports facilities in Mangaung.

Mr Pongolo commented that the interaction with the Committee had been enriching. Officials could not dodge reality.  The metro would go back and implement projects and use the grant funding as advised. There would always be a challenge with delivery, but the officials would support the work of the Committee. The Committee should consider the situation where people were invading open spaces, sometimes against informed advice from the municipality. Mangaung was not the only metro facing this phenomenon, but all other municipalities.

eThekwini presentation
Mr Kenny Breetzke, eThekwini Metro: Strategic Executive, Engineering, said the bulk of the backlogs faced by the metro were in the informal settlement areas. The metro was not moving with speed in addressing delivery challenges. The metro had a backlog of about 400 000 houses.  Sanitation and water backlogs were particularly high and affected the quality of lives for most of the metro’s residents. A significant number of people used pit toilets, but there was a strategy to tackle that. The electricity backlog was also high, because the metro provided electricity only when the dwelling had been formalised.

The metro had noticed the different data on backlogs in the census, compared to those of the municipality. People provided misleading information on the census -- for example, people would indicate they had electricity even if they had illegal connections. This kind of a connection posed a high risk and had often resulted in electrocutions, and was very unsafe in instances of fire. The challenge with the census statistics was that they were used as a reference point for grants and equitable share funding.

In the case of informal dwellings, the model used by the metro was by means of aerial photographs. Shacks would be counted from the photograph.  Incorrect recording of the status of structures was a challenge.  For census purposes, people had incorrectly recorded their structures as formal houses. This was deliberately done, because people feared being evicted.

The metro had about 638 informal settlements, and 152 had been formally upgraded. The metro was combining the formal upgrading process with interim upgrades. The interim upgrading was meant to tackle the settlements that were most in need of the upgrades. The Informal Settlement Programme (ISP) supported in-situ upgrades, and about 88% of households had been identified for in-situ upgrades.

The metro also had a plan to formalise the transit facilities and would thus provide interim services. The services included water standpipes, communal ablution blocks, basic road access, and electricity on a paid basis. Only settlements earmarked for formal housing in three years time were selected for the programme. From a social justice perspective, it made sense to prioritise rapid delivery of basic services to many settlements, before providing a top structure.

The metro had adopted a clustering principle that incorporated a wider town planning approach.  This was to ensure that investment decisions considered the overall planning framework for adjacent informal settlements. The choice of the clusters was based on the inclusion of various site parameters, clusters with the greatest infrastructure demand and regional distribution.

Challenges faced by the metro included servicing informal settlements as quickly as possible and the use of well-located land for higher intensity use. The promotion of regional integration and prioritizing integrated rural development within the metro, were also noted.  Addressing the question of rural development would help to deal with the problem of land invasion due to economic displacement. The national housing policy did not fully appreciate metro servicing standards and locational challenges, like the terrain. Inability to curb land invasions or the growth of existing settlements was also another challenge. It was difficult to provide secure interim tenure if land was in private ownership.

Other challenges included resistance to relocation due to pressure from shack lords, who had vested interests. There was also a general scarcity of well-located developable land. Poor geo-physical conditions, such as unstable soils, steep terrain, and flood plains hindered the work of the metro.

Mr Breetzke said the metro was hoping it would not be unable to spend all of its allocation. The current spending of the USDG stood at 78%, and would reach 100% by year end. The planned projects would require R1.6 billion, and that amount would be supplemented by R320 million from municipal coffers. All the preparatory work had been done, and spending would increase dramatically in the next year. With the provision of bulk infrastructure, it could take up to seven years before one could realise the benefits.

There also was a difficulty with the provincial departments always claiming limited budget when requested to assist. An instruction had also been to prioritise rural areas. The metro spent close to R2.2 billion in servicing poor areas. There was a big push on asset management -- an asset management programme was being rolled out.

Discussion
Ms D Dlakude (ANC) wanted to know if the metro had set itself a deadline for relocating the people from one-roomed zinc houses into formal houses.

Ms Dlakude sought clarity on the expenditure, especially as it pertained the third quarter.  The 43% increase in expenditure on the USDG was noticeable, given that the metro had spent only 8% and 11% in the first and second quarters respectively. What were the reasons for this increased expenditure?  If the metro could maintain that expenditure momentum into the last quarter it would probably finish the grant. She also wanted to know why timeframes were not specified on projects.

Mr Sithole commented that the slow pace of upgrading informal settlements was worrying. He asked if civil organisations like Abahlali baseMjondolo were engaged in the process of upgrading informal settlements. The rise in the number of organisations claiming to represent dwellers of informal settlements in Durban was too much. This had unfortunately resulted in increased corruption in the allocation of housing. This increase continued to be unabated -- what was happening?

Ms Borman said the Committee had to oversee spending of the USDG, but it was not clear how the money was being spent by municipalities. She sought clarity on the transit zinc houses that the metro was providing. What was the policy around the length of time that people remained in those structures?

Ms Borman wanted to know the exact location of where the pilot projects were located. She asked if in any of the projects were forced removals for the purpose of infrastructural development. The Conurbia housing project had moved far too slowly.  What were the allocation criteria for the project? She asked why the metro requested people to build shacks first, if they wanted to get on to its housing waiting list.

Ms Sosibo wondered whether the metro could ever rid itself of informal settlements. She asked if action had been taken against people dumping faeces in the councillors’ yards.

Mr R Bhoola (MF) commented that it was important that the metro aligned expectations of the residents with its plans. He asked if anything was being done at all to address the lack of cooperation among government departments across all spheres.

Mr Bhoola sought clarity on challenges posed by the model of in-situ developments. What happened to those informal settlements where in-situ development had already taken place? He asked if planning had been done around the effective use of the USDG in order to address the housing challenges posed by migration. He was happy that the preparatory work had be concluded and finalised, but asked if that meant the metro would report differently in the future.

Ms Duncan commented it was misleading and challenging if people in informal settlements indicated the status of their structures as formal. This posed challenges in terms of budgeting and understanding the exact need for housing. This was the kind of a challenge that ought to be discussed and brought to the attention of the Minister. She said challenges highlighted by the eThekwini metro had to be attended to.

Ms Duncan asked why the municipal financial year ran parallel to the financial year of government. This was an unnecessary complication that caused confusion, and needed to be reconsidered.  Why could the broader government structure not have one financial year?

Ms Njobe sought clarity on how much the unabated growth of informal settlements and people resisting to be relocated, affected the expenditure of the USDG. Was it not possible to communicate with the people, way before projects were initiated, to prepare them for relocation, especially when government planning happened three years ahead of time?

Ms Njobe said an important aspect that the country needed to consider, was taking industries to areas where people resided. This would be necessary when the question of new towns was addressed. It was no use allowing overcrowding in the “Big Three” - Johannesburg, Cape Town and Durban.  Not all people would go and live in those three cities.

The Chairperson sought clarity on the land that the metro claimed to be available in the CBD area. eThekwini metro should address the issue of apartheid spatial planning. The metro was confident that houses would be built in town and people would be moved closer to economic opportunities. The metro should ensure that informal structures were reduced. There were too many shacks in Durban.

The Chairperson said people still struggled in the metro. The continuous service delivery protests were an indication that people had not been freed. When officials met in the boardrooms, they should ask hard and critical questions, and not pat each other on the back. She concurred with other Members that the quarterly spending pattern rather looked suspicious. It was important to ascertain if the metro was getting value for money.

She said tin houses should be done away with, as they were not a habitable form of housing. Those tin structures were too hot.  Some even lacked ventilation and were dark inside.

Overall responses
Mr Sibusiso Sithole, eThekwini Metro City Manager, said transit camps were the most unfortunate part of Durban. The people in those zinc towns should have been allocated to some projects around the city. The City had resolved that there could no longer be transit camps in the future.

Strategically located land that could accommodate about 7 000 households, had been found. The city required a R1 bn to develop the land. It realised that relying on conventional methods of building would not address the housing problem in the metro. In the meantime, just to kick start the project on this land, 2 000 houses would be built.

The metro was targeting developing informal settlements in the Kennedy Road, iSiphingo, Cato Crest and Cato Manor areas, and its strategy was in-situ upgrades. The allocation policy in Cornubia was to prioritise people from those transit camps that had been identified as health hazards, and those who had resided in the camps the longest. There were people who had stayed in the zinc house for longer than seven years.

The Cornubia development was a good project, but it was not a panacea. The metro would need another project of that magnitude to be developed in order to get closer to addressing the housing challenge in Durban. Cornubia was a pilot project, and the progress was indeed slow. About 3 000 houses would be built in this financial year. A challenge that had been identified was the use of only one contractor. In future there would be more developments taking place, including mixed developments.

Mr Sithole said informal settlements were a huge challenge for the metro. People often migrated to where there were job opportunities. The metro would look at the issue of land invasion and would also consider adopting firmer measures. When people invaded, that created challenges for development. The metro had been producing 50 000 houses per annum, but that number had come down. The metro was now adopting a strategy that would ensure about 12 000 houses were provided annually.

The metro was in discussion with Abahlali baseMjondolo on many issues, but they had agendas. The metro always tried to solve issues amicably, an it was critical that people worked positively with the city.  It needed to be noted that slum lords benefited from shacks, and would do all they could to frustrate their eradication.

He said corruption and fraud relating to the sale of RDP houses had been a challenge. The President had thus issued a proclamation for investigation into this practice. That process was continuing and forensic investigators were looking at what had happened. The metro was awaiting the report and until such report had been compiled and made available, nothing could be done. People were forbidden from selling houses.

Ms Borman asked if the extent of the title deeds was known to the metro.

Mr Sithole replied the metro did not have the numbers, but had initiated a programme to look at who were the owners.

He said the metro had a mix of funding sources, including its own revenue, grants and the loans that it raised. All this money was targeted at service delivery issues. Going forward, the strategy would be to buy as much land as possible, especially around the CBD.  Informal settlements were located around area where there were job prospects. In many instances bulk infrastructure was available in these informal settlements.

The metro did not have a waiting list, but used criteria on who should get what, in line with its vision to eliminate slums.

Ms Dlakude interjected, and proposed that the responses be forwarded to the Committee in writing, as Members were pressed for time. The meeting in the House was starting at two.

The Chairperson agreed and requested that the NDHS intervene and help out with compiling and managing the beneficiary list. When the metro came back to Parliament, a report on that aspect should be prepared, as this was a critical matter.

The meeting was adjourned.