KZN & Gauteng on MinMec 2022/23 Priorities and Budget Expenditure

Meeting report

Mr Sipho Nkosi, Member of the Executive Committee (MEC) for Human Settlements and Public Works, KwaZulu-Natal (KZN), apologised for not attending the meeting on 30 August, which had been because of a lengthy flight delay. He also extended an apology for some officials who could not be at the meeting, as the National Council of Provinces (NCOP) was visiting the provinces. Members of the Brazil-Russia-India-China-SA (BRICS) bloc were also visiting the Department of Human Settlements. He assured the Committee that resources would be used efficiently, and the executive authority understood that it needed to provide first-line oversight and would take responsibility when things were not going well in the Department. It was committed to answering questions honestly.

KZN on MinMec priorities and budget expenditure for 2022/23 financial year

Mr Thulani Bhengu, Chief Operations Officer (COO), KZN Department of Human Settlements, presented to the Committee on the Ministers and Members of Executive Council (MinMec) on the KZN context; the 2022/23 budget expenditure; the unblocking of blocked projects; the eradication of mud houses; progress in the eradication of asbestos roofs; the response to disaster affected areas; progress on the issuance of title deeds; upgrading of informal settlements and serviced sites; military veterans' housing; job opportunities created; and the 40% allocation of procurement to designated groups.

It was reported that vast portions of the province are made up of Traditional Authority Land, approximately 70% of the King Cetshwayo DM and 63% of the iLembe DM are made up of land under the control of Traditional Authorities.

Land and tenure issues

More than 90% of Settlements within the uMkhanyakude DM are classified as Tribal or Traditional area and approximately 80% of the King Cetshwayo DM

-35% of the Province is Traditional Authority Land

-High-value dwellings constructed on peri-urban ITB land or state land with Traditional Authority

-Indications are that the occupants build these houses on Traditional Authority land to evade paying municipal rates.

Informal settlements upgrading

The National Department of Human Settlements commissioned the identification and verification exercise of the National Upgrading Support Programme(NUSP) in collaboration with the province and municipalities culminating in approximately 937 informal settlements being identified. 78% of  Informal Settlements are in Ethekwini. The Provincial Department receives a total amount of R790 226 000.00 from the Informal Settlement Upgrading Partnership Grant.

 [Refer to presentation for details]

Gauteng on MinMec priorities and budget expenditure for 2022/23 financial year

Mr Lebogang Maile, MEC: Infrastructure, Development & Human Settlements in Gauteng, apologised for arriving at the meeting later than required. He said he had just flown to Cape Town in the morning.

The Chairperson asked him to explain why he was absent at the previous meeting.

MEC Maile said there had been a miscommunication, and an apology was submitted as he had another commitment. It had been agreed that the Head of Department (HOD) and team would come, but they had not received the information. He said they would never ignore an invitation from the Committee, and apologised unreservedly for the miscommunication.

MEC Maile conveyed condolences to the families of the victims of the Johannesburg central business district (CBD) fire. The Department was working with the municipality to prevent this in future, and would be proactive in identifying more hijacked buildings. 23 of the hijacked buildings had already been identified. They would be working with other municipalities. In constant discussions with provinces, they had looked at the performance of the first quarter and it had been agreed that the sector would work on this to meet the medium term targets.

Ms Phindile Mbanjwa, HOD, Department of Human Settlements, Gauteng, presented the progress on blocked projects; progress on the replacement of asbestos roofs; the eradication of mud houses; the response and lessons learned from the recent natural disaster; the upgrading of informal settlements over 2023/24; the 2023/24 Informal Settlements Upgrading Partnership Grant (ISUPG) expenditure; the redevelopment of public sector hostels; and bulk infrastructure in priority development area (PDAs) in 2023/24.

Progress Report On Unblocking Blocked Projects

Progress:

• 5 Projects are currently under implementation to deliver 340 units
• 48 units delivered to date.
• 13 projects have structural assessments completed and SCM processes will be started.
• 27 projects have PRTs and started with structural assessments
• To date, two projects' structural assessments completed.

Challenges

• The Contractor is not clear on the items included as finishing on the BOQ
• The existing houses are alleged to be underquoted.
• Reduced scope on some of the projects.
• Intervention: Constant management of the various units impacting on the projects and unlocking any confusion.

Progress Report On Eradication of Mud Houses

Sokhulumi Rural Project: There are mud houses however none of these were demolished. Built the BNG houses in the same stands where there are existing mud houses. Those houses and huts are built quite neat and strong and some are big structures.

Upgrading of Informal Settlements (IS)

• 631 Informal Settlements mapped in Gauteng
• Gauteng Upgrading of Informal Settlement Strategy approved – 2021/22

Total IS per Municipality:

• 165: City of Johannesburg
• 201: City of Tshwane
• 126: City of Ekurhuleni
• 65: Sedibeng
• 64: West Rand

Redevelopment of Public Sector Hostels

The Hostels Redevelopment Programme is currently embarking on the following critical interventions in 65 Gauteng Hostels.

Six JHB Inner City Hostels: These are six hostels owned by the Gauteng Department of Human Settlements

• Routine cleaning and environmental upkeep
• Major repairs
• Completion of 229 units at Rethabile hostel
• Bulk infrastructure assessment and related work
• Bulk infrastructure upgrading

59 Hostels: These are hostels owned by respective municipalities where they are located

• Bulk Infrastructure Assessment and related work
• Top-3 Emergency Repairs

 [Refer to presentation for details]

Discussion

Mr T Malatji (ANC) asked for clarity on socio-political problems in KZN. Were these masking a forum for criminal activities? What criteria had been used to select mud houses for eradication?

Mr B Herron (GOOD) said the relocation of flood victims was an interesting case study. He assumed these were rented apartments which had been converted. For how long were the buildings being rented, and how long would tenants stay? Would the national Department look at this as a model for well-located public housing? He said there were buildings available to be rented. Were tenants paying rent, and how sustainable was the model? The Department must look at this nationally to address the housing crisis, and whether there were lessons to be learned by other provinces.

He referred to Gauteng, KZN , and the apartheid-era migrant labour hostels. Gauteng had 65 hostels, but the Minister had said last year that there were 68. He wanted clarity on this. Private hostels had been abandoned by their owners who used them for migrant labour, such as those involved in building and construction work, but people still lived there and it was a disaster waiting to happen. The owners had abandoned them, so the state would have to intervene at some point. The Grey hostels were privately built on state-owned land. There were more precarious conditions that people were living in, and the buildings were vulnerable to fire or collapse. What was being done about the hostels?

MEC Maile said there were 65 hostels in Gauteng owned by the province and municipalities. The province owned six hostels in the inner cities; municipalities owned the rest. There were hostels owned privately by mining houses, and some wanted to give them to the government, but there was a resource issue. He said the housing crisis must be considered in context, as Gauteng had built more than 1.2 million houses since 1994. Yearly, many people went to Gauteng for job opportunities. Trillions would be needed to build everyone's houses. They believed they were doing their best, and to create the impression that people were dying because they were not doing anything was disingenuous and unfair.

Mr Herron interrupted, and MEC Maile said he should not interrupt if he disagreed and wait for him to finish.

Mr Herron said he was not implying anything. He was concerned about the precarious conditions people were living in.

MEC Maile said the comments seemed sarcastic to him, and had not come across well.

MEC Nkosi responded on the hostels in KZN, and said he was aware of one in Vryheid, where the owners could be engaged for the state to take over for people to live in a conducive environment.

He said it was frustrating that the blocked project in the Ilembe District had invaded more than 770 units. There were processes in place to deal with this. There was no other option but to evict people.

Ms M Makesini (EFF) asked about the relocation of people renting flats, how long they would be renting, and if there was a plan in place to assist others in need. On blocked projects, she said a project had been started in 2018 and had not been finished to date. The Department must follow up on this. Was a multi-year project being done on blocked projects, as this was ongoing? Only 120 projects to deal with asbestos roofs were completed. When would assessments be done in the province? A person with a disability was living in a house that was not conducive to their condition, which was not fair. There were no new projects in Gauteng, and Gauteng was being neglected. She asked when work would begin in Sedibeng.

MEC Maile asked for details of the person to whom she was referring, and the conditions that were not conducive for the disabled person that had been mentioned.

MEC Nkosi said the reasons for the delays on serviced sites were on slide 62.

Dr N Khumalo (DA) said that over three locked projects had no interventions to become unblocked. What was the reason for this, and was there a plan to get it going? How much had been recovered from contractors on mud houses in KZN? She was concerned that there were no timeframes for this before the term ended. She thought transitional emergency accommodation was working and wanted a presentation on how this was being implemented, how buildings were identified and who owned them. She wanted to understand what happened after the 12-24 months for which people were given accommodation. How many flood victims in KZN had not been assisted? On title deeds, what interventions were in place to combat challenges on slide 77? Some people were beneficiaries who were not meant to be. How was the beneficiary list managed in both provinces, since some beneficiaries could not be identified?

She congratulated Gauteng on its unqualified audit finding. Regarding the various blocked projects, how were beneficiaries allocated? She had heard the case of a person whose details were placed in a newspaper, as the Department was looking for them, and when they went to the Department, they had not found the person to be on the list. How many blocked projects were there in Gauteng? On eradicating mud houses, she got a sense that the idea was to get rid of them, but the province was not eradicating and demolishing the mud houses, but building someone a house in the same yard. She asked for the locations in which this had happened. Had asbestos been removed since 1994, as no budget had been allocated? How were informal settlements prioritised? What were some of the key issues being deliberated in the City on preventative measures for fires and hijacked buildings in the inner city?

MEC Maile said the mud housing in Gauteng was not being eradicated. The Department realised a few years ago that most were structures which people wanted to use for storage. It would not have made sense to demolish the houses when they were structurally sound. The main reason for eradicating mud houses was when they were not safe, but did not endanger anyone, they could remain.

He said the National Home Builders Registration Council (NHBRC) did not allocate houses, but did quality assurance. They had 59 mega projects spread across all regions in Gauteng, such as Rama City. They tried to present a business plan with a project that was ready to implement and in terms of a fair spread of projects, there was no crisis. The performance of contractors on blocked projects was an issue. Regarding criminal activity, most blocked projects in Gauteng were very old, dating from from 2008/9/10.

There had been a direct audit disclaimer from 2019, and irregular expenditure to the value of R6 billion accumulated. This had led to non-performance, but there had been other objective issues like awarding contracts to contractors who did not have capacity or who had cash flow issues. Sometimes, the contractors would build only a foundation and then leave.

He said there were over 8 000 blocked projects in Gauteng. The Department knew which ones needed to be completed, and the beneficiaries had already completed some. Some projects may have to be restarted. A study had just been completed on how much was needed and some contractors had been appointed, but some did not make commercial sense. Sometimes contractors left a structure without a roof, as there were no funds for them, so the Department offered bigger amounts for it to make commercial sense. By next year, the Department would make significant progress.

MEC Nkosi referred to people staying in temporary emergency accommodation (TEAs), and said the Department was concerned about contracts expiring in January, and the rest that were expiring in 24 months. Only one site was ready for building in Pietermaritzburg.

For building in the metro, 13 land parcels had been acquired. However, problems had arisen, and engagements with the metro could be shown to the Committee.

In May, the Department had been told not to prolong the termination process for contractors who were not performing. After that statement went public, the Department had seen huge improvements in delivery.

They had been disappointed when the transitional residential unit programme was stopped. The TRUs were a quicker mechanism to ensure people got shelter. The TRU lifespan was reported to be between eight and ten years. These were costly units.

According to the audit of mud houses, 54% of over 11 million people lived in the rural areas.

A representative from the Department of Human Settlements in KZN said that after the flood, 4 983 families were homeless, and 1 755 TRUs had been built, based on this number. They had addressed all families that were homeless. Roughly 4 100 people had moved to TEAs. Some people had claimed they were homeless and that they had moved to relatives and not community halls, but this could not be proved. They needed to see the site where their house was damaged. This issue has been fully addressed.

Some peoples' structures were partially damaged, and they had received building materials. R600 million would be needed to fix reconstruction and development programme (RDP) houses. They were still liveable, but would become a danger. Umbokwane was no longer on the list of stalled projects. The reason for this was that plans had been put in place to divert water and prevent this from coming onto the project, but the municipality had been slow to do this. The Department had decided to stop building houses and give the funds to the municipality to build a trench.

There were areas where there were no intervention plans on blocked projects, as these were sometimes located where people lived on inaccessible sites, and families had refused to relocate to sites closer to the road. Some families did not want to sacrifice the six houses they had built and graves to be close to the road. The Department could not reach certain homesteads, and some refused to move for sentimental reasons. In Harry Gwala, farms were owned by different family members, and some refused to sign a development rights agreement, so they could not build for a few, and this became stalled in the system.

Mr C Malematja (ANC) asked about the absence of title deeds, and how this affected traditional leaders. He asked about the relationship with unstable coalitions. He commended the proactiveness on mud houses, and how the provinces were able to account for everything.

MEC Nkosi responded on the relationship with traditional leaders, and said he had never seen so many in one province. They invite traditional leaders to comment on projects in their areas. The traditional leaders were in the majority in the province. Ingonyama Trust land should belong to the people, constitutionally speaking, and this was why they did not agree with anyone indicating otherwise.

Mr P Tseki (ANC) referred to pictures of mud houses in the KZN presentation. He said it was a pain for the country, and that land was still not in the hands of the people. Politicians needed to ensure that it brought the land back to communities. He hoped that the mud houses would be eradicated. He asked about rural housing development and the Community Property Associations (CPAs), and how these were related. Communities had said the land was taken from them when the Department built there. He asked how ownership was dealt with, and how the CPA was compensated. This was a challenge in rural areas. What was the difference between a Permission to Occupy (PTO) and what the Department was doing? Given the scale of KZN and other provinces with massive amounts of land, how was the budget related to sites and services to develop full structures, since the size of RDP houses was 50m²?

Regarding land invaded by military veterans, what had been done for those who did not qualify? The Mayor had said there was a blanket eviction order, and he asked whether the Tshwane order could also be applied to other areas. More than 300 houses had been invaded in Palm Ridge, but no action had been taken. Gauteng had referred to beneficiaries and when it did an audit, the beneficiaries were found not to stay in the houses. He suggested that biometrics could be used for the audit, as the policy stated that the house must be with the owner for eight years before selling. There were safety issues where no one occupied the house, so blocked projects must be speeded up. He agreed with Mr Herron on hostels meant for migrants. The hostel for migrant labour was now a family hostel by the will of the people, as they had taken it for shelter. The issues related to hostels needed some discussion. The social ills taking place in the hostels were worrisome.

A representative from the Department in KZN said a PTO referred to issues related to individual families. A “DRA” -- development rights agreement -- meant that development rights were given to the developer. A PTO was family-specific, and a DRA developer specific.

He said CPAs allowed additional members to occupy a farm, but sometimes did not create a viable project themselves. When one project stalled, the Department did not lose money, as they paid on milestones, but the project would get stalled as contractors did not want to do non-profitable work such as the rafters and the ceiling, as the profit to be made was in the foundation, which was when contractors left. To get someone to do a non-profitable part of the building became a challenge.

The Chairperson pointed out that he should not say that the government was not losing money, as it was in fact, losing money. The chief financial officer (CFO) should address this, as this system should be changed. One should not be spending a lot of money on the foundations, and had to ensure this was directed to the top structure of the house instead.

She said Members had made important comments, and looking at patterns of informal settlements, people wanted to stay next to towns in social housing or rented accommodation. She agreed with Mr Herron that there was a need to interact with the national Department of Human Settlements (DHS)  to strengthen social housing, given the money spent on informal settlements. The DHS must deal with land invasions.

On the formalisation of targets in both provinces, they were in the second year of blocked projects, and if they did not know the numbers involved, they were expecting the programmes to end the following year without a fixed target. The MinMec must work on this.

On selling RDP houses, there was a restoration grant for title deeds and provinces were not progressing, as the majority of people residing in those houses were not the original beneficiaries. This had been defended until it was agreed with the national DHS to take away the grant due to underperformance. The title deeds programme was a major one that was valued, as it brought dignity to people. The national DHS needed to report back to the Committee on the real strategy to deal with this.

Limpopo had quantified the eradication of mud houses, and there was a need to look at mud houses able to sustain any type of weather, as eradication meant removing the structures. MinMec must look at this again.

On selling RDP houses, there was a restoration grant for title deeds. The majority of people in the houses were not the original beneficiaries.

On military veterans, she said an SA National Defence Force (SANDF) meeting was intended to be held with the Portfolio Committee responsible for military veterans. A list should not be a problem when the two Departments have all the systems in place. The Committee want to implore the two MECs to assist, as the programme was not moving at the desired speed. She had never seen a country treating those who fought for liberation like this. The MinMec should provide a timeframe on the issues relating to military veterans.

She said there had been much improvement in how Gauteng presented its work. The Committee was concerned that the sector would not achieve its targets. How would gaps in targets be closed to meet the medium term strategic framework (MTSF) targets as a sector? Taking money from a particular province meant that the target in that province remained. This had been a problem, and they did not want to lose the baseline as a sector. If they lost the money which would go back to the National Treasury, this would affect the baseline, and they could not allow this to happen. The Committee appreciated that the two provinces had done well.

MEC Maile said there was no problem with the beneficiary list, as this was centralised, but sometimes, people who had already passed on had been allocated houses. The list was reliable, but there were challenges on the ground. Some people had registered for houses, but were on the needs register and not the Housing Subsidy System (HSS). This did not mean there were no issues. Sometimes, government officials were reported to be corrupt and selling houses. The Committee should bring it to the Department’s attention if there were incorrect people on the list. The Department knew how many old people they had on the list, and sometimes, the old person was unwilling to move.

Hijacked buildings presented a myriad of issues. There were crime syndicates who hijacked buildings and rented them out to poor, vulnerable people -- and most were foreign nationals in the inner city. Many people were prepared to pay a rental, but there was not enough stock for this. Regarding blanket evictions, sometimes the courts could be inconsistent. The Department had asked for a blanket eviction order in 2019, but the court did not grant this. He said this order was needed. In 2016, the number of evictions started going up in Tshwane and Johannesburg as units dealt with the informal settlements. They were stabilised in Ekhuruleni until 2021. Small municipalities did not have capacity, and resources such as Sedibeng and West Rand. Unfortunately, they had done some work through a centrally located Microsoft system, and the national Department would deny access to the HSS as it had confidential information, so 80% of the work was done.

On military veterans, the Department gets the list from the Department of Defence, and the reliability of the list has to be ensured by that Department. Microsoft was working for them, and once they had lists, they could do biometrics.

MEC Nkosi said he was worried about the delays affecting the military veterans. He should have met with Deputy Minister Makwetla to deal with the Department of Military Veterans.

The Chairperson said the follow-up questions for MEC Maile would be sent in writing, as he needed to leave for a flight at 2 p.m. She said he should allocate more time to meet with the Committee in the future.

Response from Department of Human Settlements

Ms Funani Matlatsi, CFO, National DHS, said the Department in KZN was "throwing her under the bus."

In response to Mr Herron’s questions, she said it was not sustainable, as houses still needed to be built for permanent residence for those in the emergency accommodation. They needed to have a session with the Social Housing Regulatory Authority (SHRA) on social housing. SHRA reported to the Department that there were many rental boycotts. Residences were given on an emergency basis and within that period, they had to find a permanent solution. Government was paying 100% of the rent. The moment people realised they had to pay rent and that government was involved, they wanted to pay rent for social housing and community residential units. In the midterm budget, SHRA had asked for assistance with rental boycotts. They had to look at these challenges concerning the new model. There was a need to find a permanent solution, and the National Treasury had said there were no additional funds.

Ms Tshepiso Moloi, Senior Manager: Corporate Support and Programme Manager, DHS, said that in 2022/23, the Minister had intervened in blocked projects as a priority. A diagnostic assessment had to be done on blocked projects, and they realised the challenges were similar across the provinces. A huge number had been identified mainly through the HSS system, and they were not moving beyond a period of 12 months on expenditure and project delivery. A number had been cleared of outstanding payments. Unblocking projects intended to unlock intervention. They had to activate 811 projects over a three year period and monitor them stringently to ensure they were completed. 103 were activated in the previous financial year, and they should ensure they deal with implementation strategies, unblocking and intervention. Where there were challenges, intervention could be applied collectively with the broader intention of unblocking projects.

The eradication of mud houses was mostly related to those which were unstable and uninhabitable. Not all were uninhabitable. They also needed to include defining the dilapidated houses in the MinMec process to prevent discrimination against other beneficiaries with mud houses.

On military veterans, they had to elevate the matter to MinMec. Deputy Minister Makwetla had been invited to the MinMec in May to engage on the credibility of the provided military veterans. Over time, it had been found that some lists were not credible, so the Department used the list from the Department of Military Veterans, but there had been a delay in getting the list. The Minister had indicated the previous day that the matter had to go back to MinMec and the Cabinet. Where the lists provided to provinces were credible, units had been provided. This process would be ongoing.

There was no policy instrument to deal with private hostels, and the Department was not in a position to deal with expropriation to transfer hostels to municipalities, or provinces and be included in the community residential unit (CRU) programme.

Ms Matlatsi said the title deed restoration grant would be a solution. They expected the provinces to utilise the human settlements development grant (HSDG). There had been a technical MinMec on Monday for all provinces to come up with strategies for improving, as the Minister had ordered that this be done the previous day. The current administration had many challenges. This was the year that had special adjustments. They were also affected by COVID-19, and R2.4 billion had been taken out of the grants, contributing to not meeting the targets. There had been improvement in meeting targets for title deeds. The Department had engaged metros in giving sites to the state. She needed to see the KZN "happy letter" to take the matter further.

The Chairperson said the Presidency had to change the MTSF targets.

Follow-up discussion

Mr Tseki said KZN's response on the CPAs had been welcomed, though it had potential and needed further research. He would also work on this. The hostel issues were scary and were not taken seriously. The hostels should be visited to see what life was like there. They were a risk to the country, given the criminality that was taking place in those areas, and the hostels were no different. Incorporation of a hostel was not about renovation, but about creating streets leading to them and not leaving them as if they were in a camp. The slow pace of issuing the title deeds took away power from those supposed to be benefiting. How were these challenges being dealt with? There were scams where people would take pictures of houses and type municipal letters asking people to make an agreement to sell the house, as the municipality would take the house.

The Chairperson interjected, and reminded Mr Tseki that the Committee was out of time. She said the discussion would be taken further at a later stage.

Dr Khumalo said she would email any unanswered questions in the interest of time. She was not satisfied with the response on the housing beneficiary list management. The Committee spoke to provinces all the time, and there was a general problem across the country with the housing list. She wanted to understand the financial aspect of this for further deliberation. She asked when responses could be expected.

The Chairperson said the beneficiary lists were a challenge. When ward councillors left office, the new councillors would create another list. All beneficiary lists must be established by a Council resolution, and not be affected by ward councillors or ward committees leaving. Some people said they had registered with councillors five years ago, but their names were not registered with the National Department of Human Settlements. Communities had also alleged corruption in the process. When they looked at Gauteng and Savanna, they had found that someone was selling the flats. In Soweto, old people were literally crying, saying they were staying in a back room. A woman said she was 85 and had applied for housing with a councillor in 2004. One could not expect people to go to provinces to register their names when municipalities were where the beneficiary lists were being developed. They had to ensure these lists were secured against corruption and other undesirable elements. Sometimes, people in the houses were not the rightful owners identified by the system.

She said people believed things were free in government, and did not want to pay for services, but water boards were collapsing as municipalities were unable to pay for water services because people were not paying for this. There was a need to run a campaign to educate those working and pay for services. One must educate people on not paying, as this affects the services they receive, since these come from the taxes that they pay. There was also a need to consider how public servants behave.

She reminded the delegation to respond to the Committee’s questions which had previously been sent in writing.

The meeting was adjourned.