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DEPARTMENTAL PERFORMANCE REPORT OCTOBER-DECEMBER 2011. CONTENT. Delivery performance Annual Performance Plan Monitoring Overall Departmental Performance Communication and Outreach key Delivery Agreement Outcome 8 Job Creation Accreditation of Municipalities Turnaround Strategy
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DEPARTMENTAL PERFORMANCE REPORT OCTOBER-DECEMBER 2011
CONTENT Delivery performance Annual Performance Plan Monitoring Overall Departmental Performance Communication and Outreach key Delivery Agreement Outcome 8 Job Creation Accreditation of Municipalities Turnaround Strategy Entities performance Matters for action and redress Financial issues
COMMUNICATION AND OUTREACH KEY • Habitat Week held in the Eastern Cape, Mandela Bay Metropolitan Council. Activities included coordinating the launch of a multipurpose sports hall, hosting the Indaba on ‘Vision 2030’ at the Mandela Bay University and handover of housing project by Minister at Chetty. • Launch of Public Private Partnership initiative together with Anglo American arising from the ‘Each One Settle One’ call to action. • Deputy Minister led a successful campaign on Aids awareness in the town of Beaufort West in the Western Cape. • Working breakfast with Women in Construction sector in Gauteng • 16 Days Campaign programme. In this 16 days event, sixteen vulnerable families benefited when they received a home from government • Supported Gauteng, Eastern Cape, Limpopo, North West and Mpumalanga in hosting provincial ‘Vision 2030’ indaba’s and Youth Summits
JOB CREATION • The delivery of 30,935 completed houses and 10,800 serviced cites from October 2011 to 31 December 2011 has sustained 46,334 employment opportunities. • The information above is based on employment definition of one person employed for a period of one year. • The employment opportunities created during the third quarter 2011 is composed of 30,334 direct jobs created during the delivery on the ground, and • 15,700 indirect jobs created from the suppliers of building material as well as expenditure from income of employees.
ACCREDITATION OF MUNICIPALITIES • Achievements • An overall framework aligning the process to government instruments has been reviewed and developed • A road map that outlines the key processes that has to be undertaken by the parties has been finalised. • A monitoring and evaluation tool and toolkit has been developed. • Challenges • Legislative review of powers, functions and delegations. • Intergovernmental Fiscal and Financial Alignment. • Adequate capacity by municipalities with regards to personnel and operational funding. • Legal and legislative review of accreditation framework .
SANITATION Jobs Created • A Total of 3,303 jobs created through implementation of RHIP Cumulatively • Municipalities supported to utilize local labor & SMMEs in construction of sanitation facilities Training of Youth • Funding of 7.8 million secured with EWSETA to put 65 learners through leanership programme at NQF Level 2,3,4 • 949 Municipal Beneficiaries screened in 5 municipalities • MoU developed, awaiting signing by both DHS & EWSETA to start implementation • A further proposals have been submitted to DBSA for a job creation fund to increase number of youth put through leanership programme
SANITATION WORLD TOILET DAY • Western Cape campaign five areas were reached Paarl Knysna, Stellenbosch Phillipi and George • In each area more than 200 people were reached • In Winterveld about 600 people attended the Provincial event , the areas covered Ward 19, Ward 09 and 24. • An estimated 1600 people were reached .
SANITATION • All Provinces celebrated the Global Hand Wash Day (GHWD) • National Campaigns were held at SABC Offices in Johannesburg, Alexandra Township and National Department of Human Settlements Walker Street. • The Campaign at SABC Office took place over two days and Alexandra over three days • According to the AMR (Average Minute Rating , number of people reached) from SABC reported that 281666 people were reached during the announcement. • In Alexandra approximately 10 000 people were reached through the free slot radio interview Alex FM on 326 drive show . The show is listened by 6000- 8000 people
ENTITIES PERFORMANCE HOUSING DEVELOPMENT AGENCY • 2295.2723 hectares of state and SOE land identified during third quarter • A total of 25662.1623 hectares of state and SOE land identified to compile a third register of prioritised land for human settlements • 27 pre-acquisition feasibilities and assessments were undertaken during the third quarter • A total of 113 pre-acquisition feasibility studies conducted so far in KwaZulu-Natal, Mpumalanga, North West, Gauteng and Limpopo provinces • A formal conditional offer has been presented and conditionally accepted by Denel for the Swartklip land in Khayelitsha • Two Johannesburg inner city buildings were purchased from Servcon to support affordable rental housing in accordance with Outcome 8 and the urban renewal initiatives of the City of Johannesburg – these are currently at transfer and registration stages.
The HDA has taken transfer of two properties located in Kroonstad and Bethlehem measuring a combined total of 6.9506 hectares and, at the request of the North West Province, is in the process of acquiring a further 295.2602 hectares of land in Ventersdorp • A further five state-owned unused buildings in Johannesburg and Germiston are being pursued for affordable rental housing development purposes • 9995.1900 hectares of state land in KwaZulu-Natal, Limpopo and Free State, under the custodianship of the Department of Rural Development and Land Reform, have been formally requested from the Department. • LaPsis (Land and Property Spatial Information System) enhancements have been effected and a new look and feel with navigation has been implemented • As per the Implementation Protocol with the North West Department of Human Settlements – R14 million for land acquisition has been transferred to the HDA • A Limpopo office has been established and staffed
SOCIAL HOUSING REGISTRATION AUTHORITY Investments programme and Corporate Services • 12 Projects (7 SHI and 5 private sector applicants) approved for SHIP 2B in the third quarter; • The SHIP Investment Policies presented to Council and approved; • The National Rental Project Pipeline consolidation process is currently underway for completion in March 2012. • SHRA website is fully functional. The website is interactive and contains the latest endorsed information regarding the organization Regulations • Successful Workshops were conducted on the Companies Act, King III and Legal Compliance with SHI’s; • The Draft Regulations to the Social Housing Act 16 of 2008 were adopted by the Portfolio Committee and have since been signed by the Minister; • SHI reporting has improved since the last reporting cycle; and • There were six more SHI’s fully accredited as at the end of the 3rd quarter. .
The above figures are cumulative since beginning of the financial year and the lending programme is well on the way to meet the annual targets despite starting the year with a negative sentiment and imposing restrictive conditions to curb defaults. • Affordable housing has signed two large projects that fall squarely in the gaps housing market price (R380K and below). Together they make up 1800 units. • Leveraged funding of R 100 m from two new financing partners Cadiz Asset Managers and PIC, • Rolling out the new Contractor Finance and Development Programme to provinces in close collaboration with the National Department of HS and NHBRC. Department will support the programme with a R172m grant over the next three years to mentor and support contractor into successful entrepreneurs. • Initiated implementation of the programme management support services (new business stream) in support of selected provinces and sister DFIs as envisaged in our 2011/12 business plan.
RURAL HOUSING LOAN FUND Development impact Performance • Number of loans disbursed was 14 973, exceeding quarter target of 9 475 by 5 498 • 88.3% of the loans were taken for a housing related purpose, exceeding the target of 80% • 85.3% of the loans went to non-metropolitan areas, which was higher than the set target of 80% • Maintained national footprint since RHLF made loans in all 9 Provinces, with end user loans to poor provinces i.e. Eastern Cape, Limpopo & Mpumalanga increased by 54% during the quarter. • 56% of the loans were accessed by women • 51% of the loans went to borrowers earning R3 500 and less—an achievement under such tough market conditions. However, this was below the set target of 60%. • 66% of the loans went to borrowers earning R6, 000 and less. • Cash disbursements amounted to R41m, which was higher than the target of R30m for the period .
Total disbursements including mezzanine funding (subordinated loans) amounted to R90.5m—higher than the target of R46m. • Average loan size achieved was R6 044, against a target of R4 855 Financial Performance • Income increased by 4% from previous Quarter and was slightly above the budget • Operating costs were 8% below the budget—operating expense ratio achieved was 25% against a target of 37% • Operating Surplus Before Taxation was at R3.2m against a target of R1.1m • Value of loans in place was achieved was R322.9 m and exceeded the budgeted amount of R320.1m by R2.1m • Percentage impairment provision achieved was 12.1% versus a budgeted 19.5%--a positive variance of 7.4%
NATIONAL HOME BUILDERS REGISTRATION COUNCIL Non Subsidy Sector • Registrations - 609 new registrations compared to target of 767. Target missed by 21%. • Renewals of resignations - 2, 515 renewals compared to target of 9, 620. Target missed by 9%. • Enrolment of houses - 10, 165 enrolments compared to target of 9, 620. Target exceeded by 5%. • Late enrolment of houses - The target is 414 for late enrolments and the performance was 337. Target was therefore achieved by 41%. • Complaints - Out of 171 complaints received 85 were closed. • Inspections - The target for inspection was 56120 and 83664 inspections were conducted. The target was therefore achieved by 49%. .
Subsidy Sector • NHBRC is still facing challenges with a number of Provincial Departments of Human Settlements in terms of ensuring that all projects are enrolled timeously. • For the third quarter of 2011/12 financial year, a total of one hundred and seventy (170) projects were captured with a total of 104 projects approved. The most projects approved were from Limpopo with 64 projects approved and the least projects received from Free State and Mpumalanga province. • During the third quarter of the 2011/12 financial year, two hundred and thirteen (213) projects were captured for home enrolment, a total of twenty six thousand and hundred and forty (26, 140) units were approved by NHBRC. The highest numbers of projects were captured in Limpopo province. Nothing was received from Free State, Mpumalanga, Northern Cape and Western Cape Province.
NATIONAL HOUSING FINANCE CORPORATION • The disbursements in the year to date achieved 65% of the target. In line with the NHFC mandate of crowding-in the private sector, the Corporation was able to leverage R969 million which contributed to the achievement of the overall funding impact of 92% of the year to date budget. • Commercial banks are reportedly focusing more on the unsecured lending business that is proving to be more profitable as financial institutions are pricing higher for the inherent risk that is in the nature of business. This is also reflected in the performance of the incremental business compared to home ownership which is lagging. • The leveraging initiatives and partnerships with the private sector also contribute to the housing opportunities achieving 79% of the year to date target as well as the jobs created exceeding the target. .
In particular, in terms of the proposed recapitalisation of TUHF, the NHFC equity stake has been able to leverage R75 million worth of “B” shareholder funds as well as debt funding totalling R650 million. Therefore bodes well for inner city development, and by implication, contribute to Outcome 8’s Accelerated Delivery of Housing Opportunities Output, through delivery of private rental housing in the Inner City. • During the last quarter, efforts to convert the approvals into disbursements are being intensified with a view of achieving the annual targets. • Profits after tax for the period was R41 million against a budget of R17 million mainly due to reversal of impairments following recoveries in respect of settlement agreement, and savings in operating expenses.
Mortgage Default Insurance • The build-up of the Mortgage Default Insurance product is continuing in line with the recovery plan. The concurrence from National Treasury on the R1 billion guarantee and capitalisation of the company by R150 million however remains outstanding. Risk Appetite Statement • The Board approved the risk appetite statement for the Corporation. A comprehensive risk appetite framework has been defined to assist the Corporation in better understanding and managing its identified risks. Funding Plan • Following the approval of the Strategic Plan for the planning period 2013-2017, a Funding Plan was prepared to provide a framework for the mobilisation of funding to support the Strategic Plan. • The funding plan, approved by the Board, provides for the approval of borrowings as well as a request for recapitalisation of the Corporation. A proposal is being prepared in this regard seeking approval from the National Department of Human Settlements and National Treasury.
ROLLOVERS APPROVED FROM 2010/11 TO 2011/12 • National Treasury has granted approval of only R64,5 million of the R101,1 million requested • This amount comprises of: • R31,1 million for the Accelerated Community Infrastructure Programme (ACIP); • R26 million for the Rural Household Infrastructure Grant (RHIP); • R3,1 million for the Turnaround strategy development for the Department; and • R4,3 million for SITA infrastructure services.
ADDITIONAL FUNDS APPROVED 2011/12 ADJUSTMENT ESTIMATE • National Treasury has provided the Department with R180 million for disaster relief. • The funds are allocated to the Housing Disaster Relief Grant in Programme 4: Housing Development Finance. • National Treasury also approved R2,4 million for higher salaries adjustments. • The funds are allocated to: • Prog 1 – R676 000 • Prog 2 – R227 000 • Prog 3 – R713 000 • Prog 4 – R344 000 • Prog 5 – R447 000
CHANGES WITHIN THE BUDGET (APPROVED VIREMENT) • An amount of R8.5 million has been identified from savings to fund NUSP. • The R8.5 million consists of the following: • R1.5 million from Human Settlement Planning (P3); • R4 million from Financial Services(from P4 to P3); • R1 million from Intergovernmental Relations and International Relations(from P5 to P3); • R2 million from Management Information Services(from P5 to P3).
EXPENDITURE PER ECONOMIC CLASSIFICATION AS AT 31 DECEMBER 2012
PROVINCIAL SPENDING PERFORMANCE EXPENDITURE AS AT 31 DECEMBER 2012
