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Coghsta MEC Jerry Ndou.

R150 million chunk out of Limpopo housing pie


A whopping R150 million, that was set aside for housing projects in the province this financial year but had to be returned to National Treasury due to apparent underspending, could have gone a long way to address a pending backlog in Limpopo.
Under-performance by service providers who were given contracts with the Department of Cooperative Governance, Human Settlements and Traditional Affairs (Coghsta), contractual management and leadership issues within Cogshta have been pinpointed as apparent major contributors to the current scenario.
Facts and figures that make for a breakdown of background to the dire situation and the challenges addressed in terms of an intervention strategy that seemed to have been introduced too late, formed part of a presentation to Parliament’s Human Settlements portfolio committee by a high level Coghsta delegation on Tuesday.
Democratic Alliance (DA) Shadow Minister for Human Settlements Solly Malatsi, who is a member of the Portfolio Committee on Human Settlements pointed out that National Treasury’s decision to take away R150 million of the Coghsta budget was an indictment on previous MECs and their disregard for the poor. “In a province like Limpopo with millions of poor people in desperate need of housing, it is an insult to the dignity of the poor to lose money that could be spent on building houses for them.”
According to statistics captured in documentation simultaneously made available to Polo­kwane Observer, it appears as if the backlog in the military veterans’ housing programme in the province stands at 411 houses, and while the annual target for 2017/18 was 200 units only three units have been delivered.
From the information contained in the document it seems as if the challenge of gross under-performance on the programme in the financial year has largely been attributed to economic viability of constructing houses of 75 m² in size as demanded by the beneficiaries as opposed to housing that would adhere to the 50 m² national norm. “The province acceded to the demands of the military veterans at that time.” Mention is further made of a ministerial directive being issued to all provinces to upscale delivery and comply with the policy to provide 50 m² houses in terms of the national policy. “The executing authority has since rescinded the decision of 75 m². (The) HDA (Housing Development Agency) was informed of this decision as the implementing agency.”
In his comment following Tuesday’s meeting, Malatsi further stated “It is even more depressing that the provincial department is failing to build houses for military veterans who fought gallantly for many of us to enjoy the democracy and freedoms that we do today. To build only three houses out of a target of 200 in the 2017/18 financial year shows, once again, that the ANC government in Limpopo has no regard whatsoever for the plight of military veterans.”
Human Settlements portfolio committee
In a statement issued after a session by the same committee on 7 November last year during which the Limpopo and Gauteng human settlements departments reportedly appeared before the National Assembly’s Portfolio Committee on Human Settlements to discuss challenges in housing delivery, reference was made to the committee having called on the national Department of Human Settlements to intervene in Limpopo to fast-track delivery of houses in Limpopo.
Then the committee was seemingly relatively happy with reported progress in Gauteng, while Parliamentarians were concerned about the slow pace of delivery in Limpopo. Human Settlements Portfolio Committee Chairperson Nocawe Mafu was quoted as expressing concern about a looming disaster “and probably there is something that can be salvaged”.
The statement referenced a remark by Malatsi saying that the Limpopo report to the committee “reflects the magnitude of the problem in the province” and a worrying picture of what was likely to happen at the end of the financial year. “Part of the report acknowledges that there is ineffective contract management, (and) no punitive measures for contractors who don’t perform”.
At the time of going to press Mafu explained that the danger signs had already been identified in November last year when it became apparent that the departments in three provinces – Limpopo, North-West and Gauteng – would not be able to spend their budgets and that R150 million would be taken from Limpopo and Gauteng and R300 million from North-West to be given to other provinces. She said it unfortunately had to be done but if the measure was not taken it would have had to be returned to National Treasury.
She conceded that the lack of proper contract management as well as leadership issues both at political and management level within Coghsta in Limpopo seemed to be the main contributing factors to the current situation. Mafu added that at least they had seen a turn-around approach in the department since November 2017 and were grateful for it.
Coghsta presentation
When approached for comment, Coghsta spokesperson Paena Galane forwarded notes from Tuesday’s presentation by department head Ngaka Dumalisile to the parliamentary committee. It contains a reference to the Human Settlements budget allocation for the 2017/18 financial year having been
R1 319 493 000 and a roll-over budget of
R86 968 000 having been approved, that added to a total budget of R1 406 461 000. With the national department since having taken
R150 million, the remaining budget was
R1 256 461 000.
In the same documentation attention is drawn to departmental performance as at the end of September last year giving a picture of departmental spending standing at 39%, which was below the required national mark for spending of 41%. “At the end of (the) third quarter, 31 December 2017, our spending improved to 59%.” Seemingly by the end of January this year the provincial performance had increased to 80% in terms of sites and units at an expenditure of 67%, which excluded the roll-over target of 939 units. On 8 March 2018 departmental expenditure seemingly stood at 85%.
Challenges that were highlighted and supposed to have been addressed through a 100-day intervention programme entailed a flawed contractor database with no bias towards built industry prescripts, late appointment of contractors or service providers, late approval of developmental areas and none application to consequence management for non-performance of contractors.
A remark towards the end of the presentation pointed at a general under-performance on the part of contractors.
Galane confirmed that Coghsta’s low cost housing delivery target for the current financial year was 10 895 units of which 939 had been delivered during the course of last year to date. In November 2017 the Housing Development Agency (HDA) had been entrusted with the construction of 5 000 of the overall targeted number of houses in terms of a 100-day intervention strategy introduced by Coghsta MEC Jerry Ndou, who was given the portfolio towards the end of October last year. Currently the number of incomplete housing units stood at around 400, Galane calculated.
He explained that the major contributor to factors impacting negatively on the performance of the department on delivery housing projects was under-performance by contractors who were found not to be performing at all, leading to a situation of contractors not completing the work after receiving the first payment. He further mentioned that in terms of the intervention the contracts of 11 under-performing contractors had since been terminated. Other issues that had to be taken into consideration were construction having been impeded by undeveloped sites and protracted negotiations with traditional leaders over land for development, he concluded.