Enhancing Oversight in Human Settlements: Portfolio Committee Feedback on Western Cape Visit

1. Human Settlements Report on Portfolio Committee’s Western Cape Oversight visit of January 2010 Feedback on Recommendations 29 August 2012

2. Contents Introduction Responses to the Portfolio Committee’s Recommendations

3. In addition to specific interventions to address issues with projects visited, the Department has made a number of broader interventions to improve oversight over projects we fund: • Professional Resource Teams – These teams of professionals in the built environment will ensure that municipalities have clear Human Settlement Plans and that the projects linked to those plans (project pipeline) are ready for implementation. • Portfolio Management Unit – The Department is setting up a permanently staffed unit and is utilising specialist portfolio and project management software to improve project management and reporting. • Service Delivery Agreements – The Department is entering into service delivery agreements with Municipalities this year to hold them accountable for delivering on the targets they have agreed to in the business plan. Introduction

4. Recommendation • 1. Compliance with the National Housing Code on Farm Workers Assistance Programme, including management of farm evictions in consultation with the respective department. • Response • Department established an Inter-departmental task team to formulate a Provincial Transversal Strategy on Farm Worker Housing Assistance. • Department will host a Farm Worker Housing Summit to discuss funding streams and strategic interventions. • Farmworkers have also benefitted from municipal projects (e.g. De Doorns) Recommendations & Responses

5. Recommendation 2. Rectification of old stock especially in Mandlenkosi, Rustdene, part of Hillside1, in Beaufort West and Joe Slovo, Khayelitsha Ward 2 and Ward 12 in Mossel Bay. Response Hillside 1: The 512 houses (36 m²) that were built were constructed in accordance with the specifications applicable at the time. No rectification work to those units was required. No dividing walls or showers were required at the time. Rustdene: The houses were occupied by elderly people and had no internal toilets. The rectification programme is not aimed at assisting in this case and funding will have to be found elsewhere. Mandlenkosi-Xhoxha area: The project was started in 1988 and completed in 1990, i.e. during the time of the previous Administration. The beneficiaries only recently agreed to having their 56m² houses demolished and replaced with smallers houses as per the programme. The first 32 units will be rectified in this financial year. Recommendations & Responses

6. Recommendation 2. Rectification of old stock especially in Mandlenkosi, Rustdene, part of Hillside1, in Beaufort West and Joe Slovo, Khayelitsha Ward 2 and Ward 12 in Mossel Bay. … continued. Response Joe Slovo : Blocked project. 50 Houses still to be constructed. Individual subsidy applications will be processed for the 50 houses, because the beneficiaries wants to construct their own houses. Khayelitsha Ward 2 and Ward 12 : The Community wanted new houses to be build and not the existing to be fixed. Minister Madikizela spoke to them and only recently has the community allowed the service provider to investigate the houses to compile a report for an application. Project is scheduled for this year. Recommendations & Responses

7. Recommendation • 3. Report on the Enhanced Discount Benefit Scheme as most municipalities have not benefited • Response • Qualifying beneficiaries must apply for the discount to the relevant municipality. • Thereafter the municipality will assess and forward to the Department to register it against the National Housing Database. • 95% of these properties are in the City of Cape Town • However, not all rental stock qualifies for the EEDBS, eg. Walk ups • Biggest challenge has been in transfer costs, but the Department has decided that it would be more cost effective to cover the costs that are not covered by the EEDBS. Recommendations & Responses

8. Recommendation • 4. Plans to enforce the Housing Act to prohibit the selling of subsidy houses in contravention of the Act. • Response • Department submitted inputs on the amendment of the National Housing Act. • The following recommendations were made: • Abandon the pre-emptive right for provision in the National Housing Act • Allow beneficiaries to sell their properties, but discourage sale for short term gain • Introduce a ‘claw back’ clause similar to FLISP • Establish effective assistance to beneficiaries to guide and educate them in the trading of properties • Investigate alternative conveyancing practices Recommendations & Responses

9. Recommendation • 5. Progress on Beneficiary List Management and Backyard Dwellers Policy • Response • The Provincial Housing Demand Database was developed in November 2011. • The Housing Demand Data Improvement Programme has been implemented in 20 of the 24 non-metro municipalities. • A municipal support strategy was rolled out in support of this Programme, as well as the uploading of the housing demand data of these municipalities. • The roll-out to the remaining 2 municipalities, Bitou and Stellenbosch, will occur within the 2012/13 financial year • Qualifying backyard dwellers form part of the housing databases of municipalities • The functionality of the database includes the following: • Processing new registrations / applications • Updating existing records • Generate waiting list reports Recommendations & Responses

10. Recommendation 6. Feedback on request made by the delegation on environmental impact assessment require political intervention Response The Provincial Department of Environmental Affairs and Development Planning has developed a process where the planning and environmental legislated processes run in parallel, thereby reducing the process time Recommendations & Responses

11. Recommendation • 7. A full report on land challenges (forestry village) in the Knysna Municipality should be forwarded to the Committee and the national department to follow –up, especially Transnet land. • Response • There are 7 villages in Knysna • 4 are private • 3 are state villages (DAFF). • The municipality has indicated that the private land owners had done a needs analysis on the four private villages, but that no needs analysis had been done on the three state villages. Recommendations & Responses

12. Recommendation • 8. A briefing by the Western Cape province on the issue of support supply to the People’s Housing Process would be required • Response • Identification and approval of PHP projects will be in line with criteria such as linkages to the Human Settlement Plans or IDP of the relevant municipality, a completed UISP project and the established housing demand database of the area. • Guidelines have been developed and is already being implemented. • All Business Plans for PHP Projects are only accepted for approval if it is submitted by the relevant Municipality and is accompanied by a letter of support clearly specifying that the identified project falls within its planning and has been budgeted for within its DORA allocation. Recommendations & Responses

13. Recommendation • 8. Current status and plans with timeframes regarding the support in terms of the revised approach to the PHP process … Continued • Response • Housing Consumer Education will be strongly linked to the facilitation process within a PHP project and beneficiaries will not be allowed to access their keys unless proof is given of having undergone the full syllabus of HCE and attendance at all scheduled workshops. • This element has been implemented since the start of the financial year. • During June and July 2012 Community Development Workers were trained in every district to also undertake the HCE Programme within their areas of responsibility. • PHP Facilitators were trained during June and August 2011 and will now be placed on a database for specific use within the PHP facilitation process Recommendations & Responses

14. Recommendation • 8. Current status and plans with timeframes regarding the support in terms of the revised approach to the PHP process … Continued • Response • Contractors and other Service Providers are to be appointed in PHP projects in collaboration with the Department or relevant Municipality in a process that will allow for quality, record of performance and fairness of allocation to be regarded as eligibility criteria and will follow a form of supply chain management process • Guidelines have been developed and is in the process of being implemented in all newly approved projects • Standard operating procedures for the appointment of contractors are being workshopped by the PRT with all the Housing Support Organisations and involves a more formal selection process as well as the assessment of selected contractors and verification of their track record etc. Recommendations & Responses

15. Recommendation • 8. Current status and plans with timeframes regarding the support in terms of the revised approach to the PHP process … Continued • Response • In all new PHP projects the use of private Accounts Administrators will no longer be allowed; the relevant municipality will in each case act as the Accounts Administrator to manage and disburse the necessary funding on a project. • This is already a standard condition in all new PHP projects and has been in effect since April 2011. Recommendations & Responses

16. Recommendation • 8. Current status and plans with timeframes regarding the support in terms of the revised approach to the PHP process … Continued • Response • Agreements with contractors will be concluded between the Department, the Municipality and the appointed Contractor/Service Provider for the implementation of the identified project • Guidelines are currently being developed for this purpose and involves the establishment of Standard Operating Procedures for the appointment of contractors as well as the revision of the contract agreement currently being concluded between the Support Organisations, the Department and the Accounts Administrators. • Implementation date is end of September 2012. Recommendations & Responses

17. Recommendation • 9. Full report on the Scottsdene Self Help Project • Response • A trilateral meeting was held between the three spheres of government on 7 March • 2012. • Each sphere looked into it archives for historical records relating the self-help • project. • Verbal interviews were held with some of the official who remember the project • A dossier of documentation was received was received from the KCEDF. • A meeting was held with the KCEDF on 30 May 2012, in Scottsdene. • A write-up of the findings found below. Recommendations & Responses

18. Recommendation • 9. Full report on the Scottsdene Self Help Project • … Continued • Response • Of the original 168 erven created, 70 were completed • 92 were left undeveloped as a result of changes to national housing policy) • Restructuring of national government departments, that is the own affairs Departments were merged into provincial administrations • The Management Committees such as Scottsdene were abolished • All tenders issued on the Scottsdene project were executed • No further loan funding was approved or released by the House of Representatives • No unfulfilled Sale Agreements could be found • No unfulfilled contractual commitments over the remaining 98 erven could be • found • Various verbal commitments to resident groups over the years by political officer bearers and officials were made Recommendations & Responses

19. Recommendation • 9. Full report on the Scottsdene Self Help Project • … Continued • Response • In the ensuing meeting with KCEDF the following was agreed: • The Phase-3 sites sold to homeowners could not be undone • A solution accommodating the listed people in the current project will be sought • The ID numbers of the people on the list would be supplied to Council (even if not all) • Council would check that (or if) they are on council’s waiting list. This is a policy requirement to be on the waiting list to obtain state assistance. Such names would be referred to the PSC • KCEDF would return to its membership and propose the possibility of either obtaining BNG unit on a smaller erf, or wait for the development of larger erven in a next project on land still open and owned by PGWC, in Scottsdene • KCEDF would seek representation on the Project Steercom, with help from the Portfolio Committee, if necessary. Recommendations & Responses

20. Recommendation • 9. Full report on the Scottsdene Self Help Project • … Continued • Response • The following recommendations were made: • It be accepted that no outstanding contractual commitments exist; • There is severe housing shortage in Scottsdene, represented by the list of names submitted by the community; • The Scottsdene self-build housing project be regarded complete, since houses have now been built on all sites; • The names previously submitted by the KCEDF be forwarded to the Community Steering Committee of the current Scottsdene housing project for consideration, alongside those on Council’s waiting list. Recommendations & Responses

21. Recommendation 10. Housing Development Agency to report on land acquisition within the Province. Response Recommendations & Responses

26. Recommendation • 11. Compliance with equity and integration policies when allocating houses. • Response • Department developed a “Draft Provincial Framework Policy for the Selection of Housing Beneficiaries in ownership-based subsidy projects” and a “Municipal Selection Template”. • This Template consists of a set of model policy options to be used by municipalities. • A number of workshops were arranged for non-metro municipalities in the Province during 2011/12, informing them of the Framework Approach. • By March 2012 all municipalities except Cederberg, Swellendam, Kannaland, Prince Albert and Laingsburg workshopped; all municipalities due to be workshopped by end September 2012. Recommendations & Responses

27. Recommendation • 12. Enquiry and a full report on the allegations around ASLA. • Response • The Department has met with ASLA and the standard ASLA house design has been adjusted. • The bathroom door no longer opens into the kitchen area. The kitchen area has been moved so that the bathroom door opens towards the bedrooms. No new house plans that still make use of the previous internal configuration are approved by the Department. Recommendations & Responses

28. Recommendation • 12. Enquiry and a full report on the allegations around ASLA. • …. continued • Response • The beneficiaries of houses that had been built according to the previous design have all been given the choice by ASLA whether they wanted their existing house configuration revised to change the position of the bathroom door to rather open into the living room area. This was communicated to beneficiaries during meetings with the beneficiaries and municipal officials. • In cases where the change was requested, the required changes were made by the contractor. Recommendations & Responses

29. Recommendation • 13. Progress report on Debt Management of Community Residential Units. • Response • All regularisation will be completed on finalisation of project. • Property management is included in the Western Cape Rental Housing Strategy and has been included in the Implementation Plan for the Rental Housing Strategy. • It will focus on items such as debt management, tenant management, facilities management, financial management within the project itself, etc. Recommendations & Responses

30. Recommendation 14. Intensify public education and strengthened public involvement in all delivery programmes. Response Recommendations & Responses

31. Recommendation 14. Intensify public education and strengthened public involvement in all delivery programmes. …. Continued Response Recommendations & Responses

32. Recommendation 15. Enhanced capacity building of qualified local municipalities for the purpose of accelerating accreditation processes. Response Professional Resource Teams (PRTs) have been appointed for the following regions: • West Coast District • Cape Winelands District • Eden District • City of Cape Town • Peoples’ Housing Process Recommendations & Responses

33. Recommendation • 15. Timeframes and assistance plans with regard to Professional Resource Teams as well as municipalities assessed for accreditation purposes and outcome thereof • ….. continued • Response • The PRTs have commenced work in support of the department and municipalities. Their duties relate to routine work that the department undertakes as part of the monitoring of projects as well as the development of long term plans and processes to ensure alignment with the strategic intent of the province. • The PRTs are also assisting some municipalities with planning new projects that are to be implemented in future financial years. • With respect to the Accreditation of municipalities, the PRTs will be undertaking an assessment of those municipalities identified to be accredited to levels One & Two in order to establish areas in which further support and development is required. This exercise will commence in September 2012. Recommendations & Responses

34. Recommendation • 16. Mobilisationof funds to address the question of topography, hence the Municipal Infrastructure Grant did not address the above challenge. • Response • Introduction of funds for “REHABILITATION” allows for the construction of services in adverse geotechnical conditions • Funds provided under the “VARIANCE FOR ADVERSE GEOTECHNICAL CONDITIONS” is then also provided to assist with the cost of the top structure Recommendations & Responses

35. Recommendation • 17. Report on the plans in place and timeframes to develop 1 000 sites in De Doorns. • Response • Two projects in De Doorns currently in implementation with contractor on site • UISP – Total of 1227 of planned 1482 sites and 200 top structures completed • IRDP – Total of 942 of planned 1400 sites completed; 19 top structures completed, a further 181 under construction. • Targets for 2012/2013 Financial Year • UISP Project: 104 sites • IRDP Project: 470 sites; 200 top structures • Remainder to be constructed in outer years dependent on funding allocation Recommendations & Responses

36. Recommendation • 18. Report on the Izinyoka informal settlement’s dispute in Mossel Bay around the removal of residents by the Municipality. • Response • Approval was granted for the upgrading of 1077 serviced sites and 731 top structures at a cost of R109 403 158.90. • Due to financial constraints implementation of the entire project will be completed in 6 years and the first phase will see 1077 serviced sites and 447 top structures completed in the 12/13 – 13/14 financial year. • The remainder of the top structured will be implemented in the outer years. Recommendations & Responses

37. Recommendation • 19. The Committee would visit respective deeds offices to oversee and ascertain challenges that hindered or delay process of Title Deeds Offices registration of the state subsidy houses. • Response • A study to determine the reasons for the delays per project has been finalized; • Approximately 90% of delays are caused by beneficiary and conveyancing constraints; • The R2479 own contribution also a significant constraint that delays transfers; • 6535 transfers were registered during the previous year, of which 2169 are from the backlog. Recommendations & Responses

38. Recommendation • 21. The delegation was of the opinion that the contractors needed to be investigated and should pay back government funds. • Response • For the past two years all allegations of corruption or misuse of funds have been referred to the Special Investigations Unit for further investigation. Several risk mitigating measures have been proposed for the PHP programme. • The FIU has been tasked to investigate any collusion between contractors, Chairpersons of Housing Support Organisation, as well as officials in the Department and Municipality. • The revised approach to the implementation of the PHP programme is to prevent any further abuse of subsidy funds within projects by ensuring only Municipalities are utilised as Accounts Administrators and the Department and Municipality appoint credible contractors that are registered with the NHBRC. Recommendations & Responses

39. Thank you