Budget Speech 2010/2011 Vote 8: KwaZulu-Natal Department of Human Settlements Address to the Provincial Legislature by the Hon. Maggie Govender ...

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Budget Speech 2010/2011
              Vote 8: KwaZulu-Natal Department of Human Settlements
     Address to the Provincial Legislature by the Hon. Maggie Govender MPL,
                    Member of the Executive Council, KwaZulu-Natal.
Madam Speaker;
Deputy Speaker;
Honourable Premier;
Executive Council Colleagues;
Honourable Members; and
Distinguished Guests

INTRODUCTION
In his State of the Nation address that gave the marching orders to the current administration,
President Jacob Zuma outlined the following as our key national priorities: education, health,
rural development and land reform, creating decent work, and fighting crime.

In addition, he stated that government would work to improve the effectiveness of local
government, accelerate infrastructure development and create sustainable human settlements.
These national priorities are aimed at creating an environment that is conducive to economic
growth and social development.

OUR VISION AND MANDATE
Our purpose as the Department of Human Settlements is to create an enabling environment for
the development of sustainable human settlements in partnership with stakeholders to improve
the quality of life for all in KwaZulu-Natal.

We are responsible for rural housing development, the regulation of home building standards,
social housing initiatives, the provision of subsidies, and the development of rental stock,
facilitating access to housing for vulnerable groups, military veterans and the middle-income
group, the revitalisation of hostels and to support and strengthen municipal capacity. Our
primary focus is providing adequate shelter for the poor.

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Within this context of providing shelter, the Department also has an obligation to work co-
operatively with other departments to ensure that housing delivery is matched by other
essential services such as schooling, health facilities, access to work opportunities, transport and
so forth. This requires integrated planning and execution.

OBJECTIVES OF THE DEPARTMENT
The strategic objectives of the Department are:
   •   Accelerating Rural Housing Development;
   •   Eradication of slums in KwaZulu-Natal;
   •   Strengthening governance and service delivery;
   •   Ensuring job creation through delivery of sustainable human settlements;
   •   Accelerating the hostel redevelopment and upgrade programme;
   •   Creating rental / social housing opportunities;
   •   Building the capacity of Housing stakeholders;
   •   Promotion of homeownership;
   •   Provision of housing for vulnerable groups including those affected by HIV/AIDS;
   •   Provision of housing for military veterans belonging to the non-statutory forces; and
   •   Facilitation of access to affordable housing for the gap/middle-income group.

Honourable Speaker all of these responsibilities must be located within a context of straitened
circumstances, in an economy that is just emerging from a global economic recession. South
Africa has not emerged unscathed despite its sound fiscal policies, anti-recession spending by
government, especially on infrastructure and credit restraint. We have shed in the region of 900
000 jobs nationally and many households are feeling the pinch. The Premier, Dr Zweli Mkhize
referred to this in his State of the Province Address when he stated that in KwaZulu-Natal the
number of households that are food insecure stands at 3.5-million - about 580,000 households.

Government’s active intervention in the form of major investment in infrastructure resulted in
the construction sector growing by a higher rate than many other sectors. Consequently the
increased employment in this sector has assisted in cushioning the country from the worst
ravages of the recession. There are however, new challenges due to the fact that most major
projects in the country have been completed or are approaching completion. Given the job

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losses arising from the global economic crisis this does constitute a challenge. It also presents a
significant opportunity for the Department of Human Settlements as this Department could
benefit from absorbing the expertise and skills of those who had been employed in the
construction sector.

However, our communities still require services and support. We, as government and as the
public service have to rise to the occasion by doing so, but by doing things differently. Changed
circumstances dictate changes in the way we do things. We certainly have to operate with
tightened belts – ensuring that we use the public purse with extreme care – rather than
squander it. Mindsets have to change – service providers must understand that government
demands value for money and that the days of government being a cash cow are over. We
cannot use our restricted budgets to justify non-delivery. As our President has said – this is the
year of action and of effective service delivery. We can and must deliver – doing much more
with less. We have to work smarter and harder.

As public servants we need to go to being just that – servants of the public, paid by the public
coffers to deliver necessary services to the public. We need efficiency, dedication, honesty,
integrity and a willingness to serve. There is no room for idleness. Neither is there room for the
squandering and the plundering of public resources through fraudulent and corrupt practices
and maladministration of public funds. Those officials and service providers who seek to engage
in such conduct will find that there will be no room to hide. As our President has said, those
who engage in corrupt and fraudulent behaviour must and will be, brought to book. Certainly,
we in the Department of Human Settlements have heeded this call and we have recently laid
criminal charges against 2 officials and there are more to follow.

There are several cases that are with the State Attorney’s office and various investigations are
underway. I am heartened by the co-operation that we have received from honest public
servants and the public at large. As I pointed out in last year’s budget speech you are our eyes
and ears.

Thank you.

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Madam Speaker, the work of the Department is covered in 4 programmes:

Programme 1: Administration.
The objectives of this programme are to:
    •   Identify and eliminate bottle-necks, as well as continuously improve the flow of
        financial, administrative and management information.
    •   Strengthen governance and service delivery, address institutional and systematic
        constraints and identify and address risks in the housing delivery process.
    •   Fighting fraud and corruption.
    •   The programme has one sub-programme, namely corporate services (Office of the
        Head of Department; Office of the Chief Financial Officer; Office of the Chief
        Operations Officer; Strategic Housing Support; Corporate Services; Human Resource
        Management)

Programme 2: Housing Needs, Research and Planning
The objectives of this programme are to:
    •   Facilitate integrated planning for the creation of sustainable human settlements,
        including a geographic information system (GIS) support;
    •   Build capability among stakeholders within the housing sector, with particular
        reference to the local government sphere;
    •   Develop, implement and maintain housing policies and strategies, and conduct
        research to enhance the delivery of sustainable human settlements in the province;
    •   Manage and implement broad based black economic empowerment aimed at targeted
        groups (women, youth, vulnerable groups, emerging contractors, military veterans
        belonging to the non-statutory forces);
    •   Provide municipal support and consumer education so that informed citizens
        understand their rights and obligations.

Programme 3: Housing Development
The objectives of this programme are:
    •   To provide subsidies to qualifying beneficiaries;
    •   To provide support for disaster relief;

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•    To facilitate installation of internal services;
    •    To facilitate construction of houses;
    •    To provide housing for military veterans;
    •    To ensure that disabled people have access to Breaking New Ground (BNG) housing;
    •    To ensure that the Finance-Linked Individual Subsidy Programme (FLISP) is
         implemented;
    •    To facilitate the access to affordable housing for the gap/middle-income group.

Programme 4: Housing Asset Management, Property Management
The objectives of this programme are:
    •    To ensure housing assets are maintained;
    •    To ensure efficient and effective transfer and sale of Housing Assets;
    •    To promote, facilitate and regulate rental housing within the province;
    •    To manage devolution of housing assets to municipalities;
    •    To contribute towards the upgrade of hostels.

REVIEW OF PROGRAMMES
This section looks at our key focus areas, outlining what the Department has achieved during
the year, as well as looking at challenges and proposed new developments.

PROGRAMME 1: ADMINISTRATION
The annual growth rate in equitable share funding (2006/07-2010/11) has been 6.8 per cent
while that of the conditional grant funding grew annually by 29 per cent.

It is extremely difficult for the Department to be able to service its conditional grant and the
Operational Capital Budget Programme (OPSCAP) policy is being reviewed to allow more
flexibility in allowing provinces to use it to support conditional grant spending.

Inventory Management
Monthly stores stocktaking and the annual assets audit was conducted. Annual verification of
vehicles and cellular phones was conducted. No discrepancies were identified. Annual
stocktaking of building material has been finalized at Oribi and Austerville. Disposal of office

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furniture and equipment was conducted at Tolaram House, Durban North and Hammarsdale. A
total of 15 state vehicles were disposed at Hammarsdale and a total amount of R 405 650.00
was gained by the Department through the auction process. Disposal and handing over of
building material at Hammarsdale has taken place.

Circulars to address asset management issues were e-mailed to all staff.

PROGRAMME 2: HOUSING NEEDS, RESEARCH AND PLANNING

Building capacity within the housing environment
One of the challenges regarding service delivery over the past financial years has been capacity
constraints (both internal and external). In order to build capacity in the housing environment,
the following programmes were implemented during the year:

Consumer education
Consumer education programmes were conducted throughout the province. These programmes
aim to ensure that housing beneficiaries are aware of all programmes offered by the
department, and how to access housing subsidies. The target groups of these interventions are
the intended beneficiaries of the housing development projects that are planned.

Job profiling and skills auditing
The skills challenges within the department were addressed through a process of job profiling
and skills auditing. The department has been part of the process led by the Department of
Public Service and Administration (DPSA) to assist the province in identifying skills gaps.

Capacity development of municipalities
The lack of capacity in the municipalities continues to pose a major challenge in terms of
accelerating housing delivery. Many municipalities do not have the appropriate and adequate
personnel with project management skills to execute housing development functions

The Department has taken an initiative to bridge this gap through a programme for the
establishment of dedicated housing components. This programme will allow municipalities to
have fully employed officials within their jurisdiction. Due to financial constraints fewer

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municipalities than anticipated have been able to participate in the programme. Negotiations
are taking place with the National Department to make funding available to bolster and
strengthen the capacity of municipalities. It is expected that these housing components will
provide for managers with project management skills and other related skills required to
perform housing delivery functions. It is also envisaged that the use of Operational Capital
Funding (OPS-CAP) allocated to the Province through the conditional grant will assist in
employing personnel who will render housing delivery functions.

In addition to the above, further interventions are also envisaged in terms of the training of
building inspectors. This will mean the engagement of NHBRC to build capability to undertake
building inspections who will inspect houses for adherence to quality standards.

Building capacity within the housing environment
The Department has contributed to developing the built environment by:
   •   Encouraging structured joint ventures with other housing stakeholders like local
       government, social compacts and housing associations during the implementation of
       housing projects;
   •   Implementing capacity building programmes for external stakeholders of the
       department, such as consumer education, home gardens education and awareness
       programmes (7309), traditional leaders training, youth empowerment programmes
   •   Maximising the use of local resources to stimulate local economic development through
       departmental procurement processes.
   •   Assisting municipalities to develop housing development plans (51 plans reviewed)
   •   Developing policy guides for housing programmes. Five policy guidelines were
       developed.
   •   Reviewing housing development plans: Five housing projects were packaged. Unions
   •   We will do more in this regard as stakeholders like the Military Veterans Associations get
       involved.

Policy and guideline development
The Department met its target of developing 4 new policies and/ or guidelines. The following
policies/guidelines were developed in conformity with the NHBRC and project approval process;

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Guideline on 1 house per umuzi; tranche payment guideline; and locational allowance policy. In
addition to this, a website publication procedure was developed.

Policies have also been drafted in relation to: Women and Youth in Housing; Housing our Senior
Citizens and Disabled; Emerging Contractor Strategy; Stakeholder Engagement and Enhanced
Norms and Standards. These will be finalised in the new financial year. Work will also be
undertaken on a quality assurance policy; housing cooperatives framework; and farm residents
housing.

Policy audits will be undertaken on an ongoing basis. Policies relating to the pre-emptive right
have been undertaken and findings were submitted to the National Department for proposed
amendments. These will be taken further in the new financial year. Audits of the policies on the
use of the institutional subsidies, housing for vulnerable groups and home based care and
implementation of the enhanced peoples housing projects have been conducted and it was
noted that further enhancements are required to application packs to facilitate implementation.
This will be undertaken in the new financial year. Evaluation will also be done on the tripartite
policy and joint ownership policies to verify impact and identify areas needing improvement.

Research
The Department has exceeded its targets in terms of research projects. The two projects
targeted for 2009/2010 were completed. These are: State of the industry in relation to limiting
the number of projects per implementing agent and locational allowance, major centres and
costing of materials analysis. The following research reports were also completed: Stellenbosch
enviro-village (Lynedoch Village) investigation on alternative technology; Report on UK Social
Housing; Alternative technology and housing in Namibia; Indigenous technology and Close-out
of projects: Potential delays caused by policy requirements.

The following reports have also been drafted and should be finalised in the new financial year :
Rural development needs survey; Land affairs agri-village and housing initiatives; Preparation
funding costs Norms and standards; and Customary law: allocation and law of succession.

In addition to these, research work will be undertaken on the following: Assessing the changing
needs of aged and disabled in the design of the houses against the current types of

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enhancements provided in National Policy; Child headed households: impact on housing
delivery; Rural economic models for sustainable human settlements; Challenges in adherence to
industry norms and standards. Case studies will also be undertaken on rectification projects;
informal settlement upgrades and agri-village housing projects.

KZN Innovation Hub
This initiative is aimed at broadening and promoting a variety of products utilised within the
housing sector, with particular emphasis on products that promote sustainable development. It
entails the establishment of a centre for innovative designs and technological solutions for low
to middle and high income housing. The centre is not only aimed at displaying housing products,
but also aims to house facilities for product testing. The Department has managed to secure a
venue in Hammarsdale for this hub, and other processes to roll out the programme are
underway, including partnering with relevant stakeholders, such as Public Works, the National
Home Builders’ Registration Council, the Department of Education and Further Education and
Training (FET) colleges.

PROGRAMME 3: HOUSING DEVELOPMENT

Housing opportunities
The total number of projects approved by the Province is approximately 822 and these have
yielded an estimated 569,998 housing opportunities over the period of approximately 15 years.
This figure includes serviced sites to improve the conditions of households, especially with
regard to water and sanitation provisions.

For the 2009/10 financial year, a total of 23,587 houses has been completed and 3,806 sites
serviced. An estimated 25,002 houses are to be built and 8,001 sites are to be serviced in the
2010/11 financial year.

Subsidies
Subsidies approved for the 2009/2010 period number 21,382. The projected figure for
2010/2011 is 23,435, and is made up of the following:
   •   11,874 project-linked subsidies;
   •   84 institutional subsidies;

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•   8,877 rural subsidies;
   •   120 credit-linked subsides;
   •   480 non-credit linked subsidies and;
   •   2,000 finance-linked subsidies.

Slums clearance
During 2009/10, the Department implemented in situ upgrades and slums clearance in various
municipalities thereby making progress towards meeting the objective of eradicating all slums
by 2014. A total of 6,250 houses were completed and 3,506 sites were serviced. It is anticipated
that 6,502 houses will be completed and 7,091 sites will be serviced in 2010/11.

Rural housing development
There has been a substantial increase in the overall housing delivery within rural areas in recent
years, particularly in those areas that have previously being excluded by apartheid planning.
Further contributing factors include the following:
   •   KwaZulu- Natal Province is a predominantly rural province and as such there is a greater
       need for Rural Housing Development;
   •   50 per cent of the backlog statistics indicate that there is a demand for Rural Housing;
   •   Due to the high level of intra-provincial migration there is a need to prioritize the rapid
       development of rural housing;
   •   The provision of social and economic amenities and pull-factors in the rural areas to curb
       the spiraling of slums in the inner-city.

Focused attention has thus been paid over the past three years to promoting rural
development. A total of 26,328 housing units have been completed, benefitting approximately
118,476 individuals accommodated by rural housing stock, and thereby affording housing to the
destitute in rural areas. A contributing factor to this accelerated rural development is the rapid
identification and release of rural land through the continued partnership and commitment of
the relevant stakeholders inclusive of the traditional councils.

In line with the national and provincial priority of rural development, the Department will
continue to accelerate housing delivery in rural areas throughout the province. Approximately

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41 per cent of the budget allocation has been allocated to rural development and this
demonstrates the Department’s commitment to more effective and sustainable rural
development in line with national and provincial priorities. The housing service delivery to rural
areas will further be enhanced by the construction of 44,900 housing units over the MTEF
period thereby injecting further development and improvement of the lives of the people within
the rural areas. This programme is destined to benefit an estimated 202,050 individuals over the
next three financial years.

The Department has also partnered with the Department of Agriculture, Environmental Affairs
and Rural Development and private institutions in order to ensure that all housing units built
have gardens and trees, which will assist the provision of food security and income generation
and export possibilities, thereby creating sustainable human settlements.

Middle-income Property Market Interventions
While our primary focus is on the poor we do also have the responsibility of affording the
middle income earners access to affordable housing as well as providing rental and social
housing. In this regard we welcome the announcement by our President of a key new initiative
to accommodate people whose salaries are above the threshold to get government subsidies,
but who earn too little to qualify for a normal bank mortgage.

The establishment of a guarantee fund of R1 billion to incentivise the private banking and
housing sector to develop new products to meet this housing demand will go a long way to
addressing the needs of the middle-income sector.

The Department has signed Memoranda of Understanding with the following financial
institutions:
    •    ABSA in 2007
    •    FNB in 2009 and
    •    Standard Bank in 2010

The Department is currently finalising Finance Linked Individual Subsidies with ABSA for 48
individuals amounting to R903,999 and with FNB for 136 individuals amounting to R2,380,107.

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The Department envisages signing the MOU with Nedbank this year. Nedbank is financing part
of Imbali Ingwelezane project in Empangeni with 150 units reserved for the middle income
group. FNB is also involved in this project and is financing 500 units in the middle income
bracket.

FNB has further confirmed the following projects:
   •   A project in Umgungundlovu which has 1200 units reserved for the middle income
       group;
   •   An integrated housing project in Hayfields in the Msunduzi Municipality comprising of
       5,000 units;
   •   A project in Thornhill comprising of 2000 affordable housing units;
   •   A project in Driefontein comprising approximately 6000 affordable housing units;
   •   A project in Mbozamo comprising approximately 425 affordable housing units;
   •   A project in Kwadukuza comprising approximately 2,500 affordable housing units;
   •   A project in Umhlatuze comprising approximately 450 affordable housing units;

Standard Bank has recently launched the Woodmead project which is a fully integrated project,
of which 40 per cent is reserved for the middle income bracket. In addition, there is a project
planned in Sunnyside Park, Amanzimtoti, consisting of 1100 units, of which 40 per cent will be
reserved for the middle income bracket. Standard Bank has also been appointed by eThekwini
Municipality to develop affordable housing on 3 land parcels in Kwa Mashu consisting of 2500
units and 4 land parcels in Chatsworth.

The Department will partner with the financial institutions to ensure that the planned projects
are successfully executed for the affordable housing market in line with the President's
programme to assist this market with the National Guarantee Fund.

Rectification of housing projects
Rectification of housing stock built between 31 March 1994 and 31 March 2002 has been
consolidated including the engagement of the NHBRC to assist in the completion of the projects
by 31 March 2011 subject to financial commitment.

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There are many houses in the Province that are of abysmal quality due to poor workmanship,
inadequate supervision of the construction process, use of sub-standard material, poor
infrastructure planning and the litany can continue.

The Department through local authorities has identified approximately forty nine (49) housing
projects of approximately 40,374 housing units in the province that have been categorized as
structurally defective. The extent of rectification varies from simple structural repairs to
demolition and rebuilding, depending on the professional opinion on the structural integrity of
the building and risk associated with the structure.

Progress on rectification as at 31st March 2010 reported 2158 houses rectified only, 3,490
houses rebuilt and 31,193 houses under forensic engineering investigation. Cumulative
rectification costs incurred to date are R401 million including construction and related indirect
costs such as provision of temporary accommodation, services and management fee during re-
development of defective houses.

Budget estimates for 2010/11 makes provision of R74 million as financial interventions for
housing rectification programme.

Government has not been getting value for the money that has been spent. Someone said that
housing delivery has been like transporting water in a leaking bucket – there is such wastage. It
is the end-user who is short-changed. It is the poor who suffer most with greedy developers and
contractors harvesting super profits. Enough is enough. This must change. Government will pay
when the right thing is done right the first time. Fixing costs must be borne by the mistake
makers and those who choose short cuts.

I am pleased to announce that the Chief Executive Officer of the NHBRC, Mr. Mashinini and I
have signed a Memorandum of Understanding and a Service Level Agreement. This is the result
of detailed discussions that have been held between departmental officials, the NHBRC and
myself, over the past two months. These agreements signify a mutual understanding and a
common commitment to ensuring quality products for beneficiaries of low-income subsidized
housing. The NHBRC will support the Department to ensure that houses of good quality that
conform to required building standards and that are NHBRC enrolled are built by service

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providers who are registered with the NHBRC. Mr Mashinini is here with us today and I would
like to thank him and his team as well as the team from the Department of Human Settlements
who worked hard and fast to facilitate this process.

The Department has engaged the National Home Builders Registration Council (NHBRC) to
undertake a detailed forensic engineering investigation on all forty nine (49) housing projects
identified by the local authorities where outcome of the analysis will outline the extent of
rectification required and apportion claims accordingly to respective service providers in terms
of design and construction deficiencies. We will, as far as is possible, attempt to recoup costs
incurred from the service providers responsible. There are several such cases that have been
referred to the State Attorney’s office. We will also blacklist those service providers who have
been found guilty of shoddy workmanship and will report them to the national Department of
Human Settlements. We have found that unscrupulous service providers have the ability to
transport their services across provinces.

The housing rectification programme will be audited by a team established by the National
Department of Human Settlements and which is led by the Special Investigation Unit. This team
has been established for the purpose of identifying gaps that exist and taking necessary action.

Land acquisition for development

Cornubia project
The Department has released funds totaling R248 million to purchase approximately 570ha of
land from Tongaat Hulett for the purposes of undertaking the Cornubia Housing project.

Amaoti project
An important step in providing housing for the almost 10,000 families who live in the Amaoti
Informal Settlement, North West of Phoenix, was recently taken when the MEC granted
authority to eThekwini to proceed with the expropriation of approximately 500 hectares of land.
There were numerous difficulties that had been experienced in securing the land for the Amaoti
Project, and the expropriation of the land is a definite step towards the delivery of housing
needs. The Amaoti Informal Settlement is one of the largest informal settlements in Southern
Africa – it is congested and is not a healthy and inspiring environment for people. The

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expropriation authority exceeds the existing footprint of land that is occupied, and the
additional land will provide the necessary space to de-congest the settlement and allow the
inclusion of those aspects that contribute towards creating a sustainable human settlement.
The Amaoti Project is a huge-scale project that involves the most complex land assembly
process yet undertaken for the purpose of human settlements. We will work together to ensure
that ultimately the community’s current position is upgraded and that habitable, inspiring and
decent shelter is provided, within the context of a human settlement.

Nyoni Project
I have recently been informed that the land required for the Nyoni Slums Clearance project in
Mandeni has been released for development. This clears the way for us to commence the
provision of long-awaited housing in the municipality. This is a huge project involving the
construction of a considerable number of houses.

Disaster management interventions
The Department provides permanent housing where natural disasters have destroyed houses. A
notable intervention is the Bulwer Housing Project in the Ingwe Municipality. The incident
occurred in Mid-November 2009 and the Department managed to build 150 houses within a
period of 60 days through the utilisation of suitable, qualified building contractors. Construction
of 300 houses in the St. Paul’s area in Vryheid was completed in a record time of 4 months as a
rapid response towards disaster in the Province. A total of 900 houses have been built in
response to storm and fire related incidents in the province. The Department is in the process of
packaging housing projects in areas identified as being prone to disasters in order to provide a
long term permanent solution.

Building material vouchers system
As part of the relief programme, the Department has assisted 1,352 families with building
material vouchers in order to rebuild their houses which were destroyed during natural disaster
incidents in the province. Building material vouchers were issued in various areas in the
province including, uMsinga, Mandlankala, Ingwe and Molweni.

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Special projects
These are projects that fall outside the scope of the usual projects implemented by the
Department. They could be projects for vulnerable groups or the disabled or the like. 1025
houses were built in 2009/2010 and 2100 houses will be built in 2010/2011.
The MEC often receives requests for assistance from people who require urgent or special
assistance – homes may have been destroyed, there may have been violence, parents may have
died and so on. 1,658 beneficiaries were assisted in this fashion.

Housing for non-statutory force military veterans
Although the policy for the provision of housing to non-statutory force military veterans was
adopted in 2008, there has been little progress in this regard. I am pleased to report that we
have been able to move forward on this matter. The MEC and Department officials have met
with the KwaZulu-Natal Military Veterans Association, which represents the 3 non-statutory
military veterans organisations namely uMkhonto weSizwe, APLA and AZANDLU and a way
forward has been charted. A Business Plan has been prepared and an initial 180 sites have been
earmarked for development. The housing programme for the military veterans will be
implemented in both urban and rural areas and will be rolled out as a People’s Housing Project.

PROGRAMME 4: HOUSING ASSET MANAGEMENT, PROPERTY MANAGEMENT

Community Residential Units (CRU) Programme
The CRUs are geared towards providing a coherent approach to dealing with different forms of
public residential accommodation. They enable the Department to consistently provide secure
and stable rental tenure for lower income persons in good locations, and form the basis for
transition to the formal housing market.

The objectives of the CRU programme are to stabilise the housing environment and market,
support integration of public housing into the broader housing market and environment, and
ensure the creation of sustainable public housing assets. CRUs are part of an integrated
approach for approximately 15 hostels with an estimated 95,700 beneficiaries and current
development costs of R7,375 billion

The programme was intensified during 2009/10 and will continue in 2010/2011.

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Social Housing
The Social Housing programme seeks to provide a rental or co-operative housing option to low-
income people, at a level which requires institutional management and which is to be provided
by accredited housing institutions in designated restructuring zones. This programme is new but
has potential to grow, if the necessary management capacity is created. This programme
requires institutional management and co-ordination between the National Department of
Human Settlements (NDHS) and provincial departments, municipalities and social housing
institutions.

The Department has identified social housing projects within the eThekwini Municipality in
Albert Park Rental and Candella Road and these were successfully implemented during the year
through partnership with the social housing foundations, NDHS and municipalities.

Rental units
Rental units completed to date by the province are estimated at 13,083, with an additional 214
family units. Future planning and intervention is to enhance and increase development of rental
stock through Community Residential Units and Social Housing.

As part of the maintenance of state assets, 5,920 units of rental stock were maintained in the
2009/2010 period and it is anticipated that the figure will fall to 3000 in the 2010/2011 financial
year.

During 2009/10, the Department developed the Rental Tribunal Corporate Identity, with the
main mandate being to regulate the relationship between tenants and landlords, ensuring that
the unit is better positioned to achieve its stated objectives. These objectives are that all
properties will, on a progressive basis, either be transferred to individual occupants in terms of
the Enhanced Extended Discount Benefit Scheme, or be disposed of in the open market. Some
of these properties will also be devolved to the municipalities. In cases where a transfer is not
possible, such stock will remain rental stock, and the allocation includes a provision for the
maintenance thereof.

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During the year, the improvement of administrative processes, which included the receipt of
complaints, investigation of complaints, case management and adjudication of complaints
within the Department saw more cases being finalised than were originally anticipated.

Upgrade of old housing stock
Old housing stock including R293 township houses consists of approximately 45,000 units are
planned for upgrades and transfers to the qualifying beneficiaries by 2012/2013.

Enhanced Extended Discount Benefit Scheme (EEDBS)
The EEDBS was introduced to assist people to acquire state-financed rental housing, to help
existing sales debtors to settle the balance on purchase prices of properties acquired from the
public sector, or to repay publicly financed credit that had been used for housing purposes.
There were 1,139 properties transferred in 2009/2010 and 2,750 will be transferred in the
2010/2011financial year.

All departmental properties are being handled ‘in-house’, and applicants are being visited and
invited to the Department’s offices to complete applications. Municipalities are being provided
with the required support to proceed with transfers of their own properties.

The Department is providing the necessary assistance where possible, to ensure that these
assets are transferred to the beneficiaries.

KwaZulu-Natal Housing Fund
The Department is engaged in a process to disestablish the KwaZulu-Natal Housing Fund
including reconciliation of assets and liabilities associated with the fund

ALIGNMENT OF MUNICIPAL IDPS WITH NATIONAL AND PROVINCIAL STRATEGIES.
The Department has, as part of the review of Housing Chapters of the IDP’s (Municipal Housing
Development Plans), developed, together with National Department of Human Settlements, a
set of evaluation criteria. The criteria take into consideration the national strategies as
presented by the President in his State of the Nation Address together with provincial strategies
as espoused in the Provincial Spatial Economic Development Strategy and in the Premier’s State
of the Province Address.

Budget Speech 2010/2011                        Vote 8: Human Settlements                 Page 18
The nodes and corridors, approved by the provincial cabinet as priority areas are included in the
departmental allocation formula through which conditional grant funding is allocated to
municipalities. In this manner, the Department is able to influence the development of
sustainable human settlements to areas of greatest need while at the same time ensuring that
the growth potential of municipalities and that of the province is also taken care of.

DOING THINGS DIFFERENTLY TO IMPROVE SERVICE DELIVERY
The Department has undergone a process of strategic planning and introspection and has
arrived at what heralds a new way of doing things. We have come to the realisation that a more
hands-on approach is necessitated. As a Department we know how we want things to be done
and how they should be done.

We have therefore adopted the view that says that the Department has to shift from being a
mere conduit of housing funds towards being a shelter provider. We are aware that this is a
somewhat longer-term project but we hold the view that this is the direction to move in.

The Department has therefore resolved that in the 2010/2011 financial year we will be taking
over the development of some of the housing projects in the Province with a view to becoming
a fully fledged developer. This will have the effect of shortening the supply chain thereby
reducing inefficiencies. We have also decided to intervene directly where municipalities are
experiencing difficulty or where there is a failure to deliver housing. One such example is
Okahlamba where the Department has taken over the housing projects.

Our strategic planning process also led us to review how we deliver sustainable human
settlements. There is clearly an imperative for the Department to adopt an integrated, holistic
approach to our work that entails us working closely and co-operatively with sister government
departments as well as with local government, the private sector and other stakeholders.
Partnerships are important as is illustrated by initiatives such as the Eshowe Youth Build and the
involvement of Shanduka Resources in the Ramaphosa Housing Project which demonstrate how
such partnerships can enhance our efforts and improve the quality of our human settlements

Furthermore, we have decided as a Department that we will not be the dog whose tail is
wagged. Instead of housing projects being developed on a random, almost knee-jerk basis we

Budget Speech 2010/2011                    Vote 8: Human Settlements                     Page 19
will ensure that future projects are carefully planned together with our sister departments,
municipalities and other agencies to ensure that we are able to deliver sustainable human
settlements.

COMBATING FRAUD AND CORRUPTION
Fraud and corruption remain major challenges across the housing delivery environment. We will
identify and act against criminals and have strengthened our relationships with agencies such as
the Special Investigations Unit (SIU), the Hawks, the Criminal Investigation Services, the South
African Police Service and our provincial Internal Audit Unit, in order to act against offenders.

The National Department has signed a further Service Level Agreement with the SIU mandating
them to investigate fraud, corruption and maladministration in low-income housing contracts.
This will enable the Department to understand the type of abuse giving rise to blocked projects
and allow us to improve our systems and processes while getting rid of corrupt officials and
contractors. Our people, the end users will get better value for money.

Our fight against fraud and corruption, and maladministration of public funds, during this year
was multi-faceted. With our partner, the Special Investigating Unit (SIU), 167 individuals who
were employed in the various spheres of Government and who did not qualify for subsidies
were identified. Of these, 121 people were prosecuted and convicted in a criminal court. The
value of the fraud was R1, 4 million. Our philosophy in fighting fraud is to tackle anyone,
irrespective of who you are. This was demonstrated when the Deputy Mayor of Howick was
convicted and sentenced to three years imprisonment which was conditionally suspended for
subsidy fraud.

Various other investigations, in varying stages of completion, are in progress. These
investigations include allegations of fraudulent allocation of subsidised houses, the “sale” of
subsidised houses by officials, the sale of building material, the granting of contracts in a
collusive manner contrary to policy, the unlawful authorisation to pay contractors for work not
actually done, procurement irregularities, and a combination of these elements. In these
investigations we have drawn on the expertise of external experts, the SIU, our colleagues in
Provincial Audit, the SA Police and the Crime Intelligence Unit, as well as the National
Prosecuting Service.

Budget Speech 2010/2011                     Vote 8: Human Settlements                       Page 20
We have to now finalise decisions about 10 separate investigations on which final reports have
been provided. At the time of this Budget Speech, the National Prosecuting Authority has
confirmed that they are satisfied that the investigation of an official alleged to have sold units, is
sound, and that a summons is now being issued against the official concerned. Another official
was recently arrested and has already appeared in Court on similar charges. In another matter
the State Attorney has already been briefed to advise us on the merits of initiating civil
proceedings to recover R 91,15 million in damages that were caused because of the quality of
the contractor’s work.

A culture of participation in the investigation process is being inculcated amongst us, and there
will be a natural isolation of those who do not share our commitment to zero tolerance of fraud,
corruption, and the maladministration of public funds.

As a Department we are pledged to a clean administration where the wastage caused through
fraud and corruption is eliminated.

We have been working with the provincial Audit Unit who have advised us on how best to
redesign the Department to promote the Risk Control function, including the formation of risk
control centred audits. Risk Management has conducted audits to ascertain the internal risk
associated with the processes and management of, inter alia, transfer payment management,
subsistence and travel claims, supply chain management, subsidy administration, the
performance management system, and general information technology controls.

CONCLUSION
Our challenge as the Department of Human Settlements is not simply to provide a physical
structure, a house, but to make sure that this is a home for families, part of a sustainable
neighbourhood, and that it contributes to economic and social life where cultural, sporting,
education and commercial prowess can be nurtured.

We want to also ensure that the homes provided are of good quality. We want to ensure that
our people get the best value for money. Being poor does not translate into being the recipient
of poor quality and poor service. As the Department of Human Settlements we will honour the

Budget Speech 2010/2011                     Vote 8: Human Settlements                        Page 21
sentiment articulated in the Freedom Charter that states, “There shall be Houses, Security and
Comfort.”

In conclusion, let me express my appreciation to the Premier, Dr Zweli Mkhize and my
colleagues in the Executive Council and the Legislature for their wise counsel and support. I
want to also recognize the support provided by the Acting Head, Mr Siddiq Adam, and the staff
of the Department of Human Settlements, the Communications team and the staff of the
Ministry. Times are tough but we shall prevail. My appreciation extends also to the Oversight
Committees whose constructive contributions never fail to enhance the work of the
Department I want to also thank my family and Charm Govender, my comrade, partner and
friend, for their patience and support.

Madam Speaker, it is my pleasure to present the 2010/2011 budget vote for the Department of
Human Settlements. The budget is as follows:

Programme 1: Administration ................................................................ R118,405m
Programme 2: Housing Needs, Research and Planning............................ R26,392m
Programme 3: Housing Development................................................ R2,823,814 bn
Programme 4: Housing Asset Management, Property Management .... R143,002m
Total: ................................................................................................... R3,111,613bn

of which:
Unauthorised expenditure (1st charge) not available for spending: R9,303,000
Vote 8 budget available for spending after 1st charge:                                           R3,102,310,000

Budget Speech 2010/2011                                       Vote 8: Human Settlements                                   Page 22
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