The Honourable Speaker,
The Honourable Premier,
The honourable leader of the opposition,
The honourable members of the house,
Distinguished guests,
Ladies and gentlemen.
In her State of the Province Address last month, the Premier stated that 'Creating the conditions needed for increased economic growth and job creation' is the primary focus of our government.
In Human Settlements, one of our core mandates is the transfer of land ownership, giving people an asset which they can use as leverage to access other financial sources, and through providing security of tenure, people are taking one giant step forward in their individual journeys of economic development.
However, the Premier also said "With a provincial housing backlog of some 500 000 units, it is absolutely pitiful that the regulatory environment makes it almost impossible to deliver low-cost housing on any site in less than 6 years."
Our strategic approach to human settlements delivery is in line with the National Outcome 8 for Human Settlements, especially with our focus to ensure that everyone living in informal settlements, backyards and overcrowded families in the Western Cape has access to basic services by 31 March 2014. Through providing basic services, we will make sure that the people of those 500 000 households at least wait for their houses under more dignified conditions.
To ensure better human settlements delivery, we have taken important steps to work more effectively and better together with all stakeholders within the complex regulatory environment and long time frames, including the appointment of Professional Resource Teams and establishment of a Portfolio Management Unit, which I will address later. However, apart from the complex regulatory environment, our grant allocation structure has changed, and this has had significant implications on our delivery targets.
The actual amount available for top structures and serviced sites has effectively become less, resulting in a reduction of our housing targets. Let me explain a little further.
In 2009, when my term began, the new name of Human Settlements, rather than Housing, was more a statement of intent than a practical shift. We reported on the number of sites serviced and the number of houses built. There was only one conditional grant - the Human Settlement Development Grant - disbursed to the province to fund housing projects.
As I informed this house last March, the Urban Settlement Development Grant was created at the beginning of the 2011/12 financial year by top-slicing 20%, or R502.2 million of the Human Settlement Development Grant and combining it with the Municipal Infrastructure Grant for Cities. This equates to approximately 5000 less serviced sites and 5000 less houses per year, which is roughly the difference between the 2008/2009 targets and the 2010/2011 targets. This grant is disbursed directly to the City of Cape Town. This is the main reason the HSDG for this year is R1,638 billion , and not R2,141 billion, as was projected in previous MTEFs. Austerity measures which have impacted all portfolios to some effect have also played a role.
The servicing of sites in the City is now funded by the USDG. So, in addition to the 10656 sites we will fund from the HSDG, predominantly outside of the metro, the City will service a further approximately 6000 sites under the USDG in 2012/13 and over 9000 sites in 2013/14. In addition, the City will also provide access to basic services on a shared basis to about 2000 backyarder families and 4000 informal settlement households under the USDG in 2012/13. Through working better together with the city, we will accelerate the rate of delivery of basic services.
However, we could not simply transfer targets wholesale from the HSDG to the USDG, because the latter was created, to ensure better alignment between bulk infrastructure and human settlement projects and, to ensure the development of sustainable communities by funding other social amenities as well.
Even today, we report to the national department and treasury on the number of serviced sites, houses and various other programs, like rectification of old stock, emergency and temporary housing opportunities, shared services, social and community facilities and the purchase of land. Three years ago, lumping all of these items under 'other' made sense - they contributed relatively little to expenditure on the grant. But with the shift from housing to human settlements, the focus on ancillary items to create sustainable and integrated communities has increased and so has the proportion of the budget allocated to these programs. For example, this budget year we have spent, amongst others, R181 million on upgrading Community Rental Units in the City of Cape Town and R37 million on Basic Services Provision.
Other departmental programs within our mandate included
We set a target of 13 085 serviced sites and 12 640 top structures for the 2011/2012 financial year. The reduction in targets has been previously explained due to changes in the grant structure. As of 31 March 2012, we will have delivered 8004 sites, or 61% of our target, and 10927 houses, or 86% of our targets. There are currently another 2875 houses under construction with progress payments having been made within the current financial year. These houses will be finished in the next few months, and when complete, will bring the total number of completed houses to 13802.
Backyarders and people living in overcrowded houses are also recognised as important beneficiaries. In Delft Symphony and Delft 7 to 9, 2422 backyarders were accommodated. Another 450 backyarders from Langa will be accommodated in the next Delft project. In the Drommedaris project near Paarl, which is currently under construction, 600 out of 1500 opportunities will be allocated to backyarders and people living in overcrowded houses. The Drommedaris project will integrate different communities, with a vision of living better together.
Municipalities are our primary developers and implementing agents, and their performance determines whether or not we reach our targets. The main reason for under performance on serviced sites is that we made a strategic decision not to automatically approve funding for top structures once serviced sites were completed, as was historically done. Municipalities simply did not have pipelines in line with our new strategic direction to meet the demand for serviced site delivery. As such, it is important to detail the performance of each and every municipality, as well as their reasons for under performance.
In the Winelands District,
In the Overberg District.
In the Central Karoo District
In the Eden District
In the West Coast District
When we realised that some municipalities were not going to perform, the Grant Allocations Advisory Committee recommended that the money be diverted to other municipalities where projects could be accelerated. The revised allocations were gazetted in November 2011 and February 2012.
The Department has a strategic objective to ensure that everyone in the Western Cape has access to the minimum standards of basic services by the end of 2014. We are making good progress; the informal settlements database has been verified and updated, and a needs and cost analysis completed. The plans for the municipalities have been created, housing pipelines reprioritized, agreements have been signed, and projects approved. In addition R37 million was allocated for basic services in the following lead municipalities, which are ready to implement, and which face the greatest need. Breede Valley received R6 million, Stellenbosch R9 million, Overstrand R6 million, George R6 million, Knysna R7 million and Mossel Bay R6 million. We are working better together with all the municipalities to ensure service delivery.
To mitigate the major challenges of human settlements delivery of working with project delivery time frames of 5-6 years, a complex bureaucratic environment, and the reliance on effective, actionable planning from the municipalities, we have several major business process and strategic interventions.
Allocations to municipalities are now based on the readiness of projects, instead of predetermined amounts for which the municipalities create projects in order to spend the allocation.
Service Level Agreements are going to be signed with the Mayors and municipal managers, in which commitments are made to deliver specified numbers of top structures and service sites. Committed delivery targets per municipality have also been tabled in the 2012 Annual Performance Plan.
We have established the Project Management Unit, or PMU. This is an information technology system designed to track projects over their average 5 year lifespan. This will enable us to get a snapshot of all projects in the pipeline, their projected milestones, as well as flagging them when they become blocked. As soon as any milestones are not met, an alarm will sound and mitigating action can be taken.
The lack of planning capacity at municipal level is also a major problem. If a project were to get irrevocably blocked 3 years into its development cycle, and there was nothing to take its place, a lot of time is lost in beginning the planning phase to create another project to take its place. In response, we appointed five Professional Resource Teams, or PRTs, one each for the PHP Unit, the City of Cape Town, Eden District, Cape Winelands and the West Coast. These PRTs are teams of professionals, including engineers and town planners, who will assist municipalities in creating housing project plans that meet Departmental approval standards, as well as assisting them in developing a pipeline of plans which are ready to go in case the primary projects are blocked. This will mean that should a particular project fail to deliver, we will have other options to deliver on our housing and serviced sites targets. I am happy to announce that the PRTs have been appointed and have begun work. The PRTs will help us work better together with all our stakeholders to ensure effective human settlements delivery.
The first outcome of our provincial strategic objectives of developing integrated human settlements is the accelerated delivery of housing opportunities for all, which includes rental, social and gap market housing. Steenberg Phase 2, costing R42 million, will deliver 150 rental housing units. with construction beginning shortly. Construction has begun on the Bothasig project, costing R46 million and this will deliver 120 social rental housing units. Under the Community Rental Unit, or CRU program, 1050 units in the City of Cape Town were refurbished at a cost of R181 million. R1 billion over 5 years is budgeted for the CRU upgrades of 7775 units.
President Zuma, in his 2012 State of the Nation address, stated that a R1 billion guarantee fund will be available for people in the Gap Market, or earning in the monthly income band of R3500 to R15000, to obtain credit to buy houses. The President stated that this fund will become operational from 1 April 2012, and two of our projects, namely Our Pride and Nuwe Begin, already have units available for the market. The City of Cape Town will also deliver in Scottsdene and Pelikan Park. We have arranged an upcoming workshop in April 2012 on affordable housing, which will include invites to all the relevant stakeholders, to clarify the way forward in more effectively servicing the Gap Market.
The Province, together with the National Housing Finance Corporation and major Banks, will be rolling out the Finance Linked Subsidy Programme, or FLISP, to assist households who earn too much to qualify for government "free housing".
Some of the details are as follows.
We are in the process of accrediting municipalities and the metro to be level 3 developers, which will mean that they will be able to access funding directly from National. Only the City of Cape Town is likely to reach level 3 in the medium term.
In the City of Cape Town, the implementation protocol, which will transfer delegations of functions and agree on processes, is being finalised. It is before the City council for final approval before being signed by Province. The City will begin to package level 3 applications once all its processes have reached level 2 accreditation.
George, Bitou, Knysna, Drakenstein and Mossel Bay are also being considered for accreditation assessment, and the newly appointed Professional Resource Teams will package business plans for them.
Our PHP unit has continued to be a major and successful contributor to the business. During 2010 and 2011 the Directorate developed a revised approach to the implementation of PHP policy in the Western Cape in order to counter corruption, poor quality and maladministration in PHP projects. This includes the registration of all contractors with the NHBRC to ensure quality standards are met.
In this financial year, 15 new PHP Projects have been approved along with 15 facilitation and establishment grants, approximately 3795 units (30% of the APP target of 12640 units) have been constructed and an amount of R255m spent.
161 Housing Consumer Education workshops were held across the Province reaching more than 3828 housing consumers participating in housing projects.
6 women contractors were trained, went on site on the 11th of February 2012, and by the end of March 2012 they will have successfully completed 10 units each.
In a partnership with South African Women in Construction, a priority PHP project has been identified in Philippi where women contractors will be contracted for the construction of 400 units over the next 2 financial years, helping us to work better together with the community to deliver the houses people need.
In partnership with various organizations, we have provided housing and improved shelter for various communities and individuals, and I would like to thank any organization that has worked with us to help those people in need. Through contributing to the Comprehensive Rural Development program, local community members have been trained to fit and maintain solar powered water heaters in an old age home in Dysselsdorp. The Dysselsdorp initiative is in line with our mandate to provide improved living conditions for the poor and elderly.
We have developed a residential/incremental densification policy to provide more sustainable, dignified settlements; quality housing opportunities and choices by making effective use of limited resources.
The positive spin-offs of the residential/incremental densification policy envisage reducing our carbon footprint, promoting social cohesion and economic efficiency among the beneficiaries, enabling savings in land acquisition, of approximately R10 000 per unit, and a reduction in the cost of infrastructure per person.
In January 2012, the Western Cape Department of Human Settlements successfully established the Western Cape Housing Demand Database that is provincially synchronised. By 07 March 2012, the housing demand data of the following municipalities had been uploaded onto the database:
Swartland, Matzikama, Bergrivier, Cederberg, Saldanha, Beaufort West, Prince Albert, Laingsburg, Witzenberg and Langeberg.
Over the next few months, the new database and support strategy will be introduced to the remaining municipalities in the Western Cape. The database will ensure the integrity of housing demand data, make the data tamper-proof and reduce allegations of corruption and fraud stemming from manipulation of the list.
To deal with the challenges of fair beneficiary selection, and achieve the outcome of municipal beneficiary selection that is fair, transparent and effective, the Department has developed a new beneficiary Selection Policy Framework, which builds on municipalities' desire to formulate their own local approaches to selection, but in a guided fashion. The need for housing is greater than the government's current resources to deliver, and this requires housing opportunities to be allocated in a fair and transparent manner, across all municipalities, whilst prioritizing those with special needs. Such a provincial approach should also generate innovations in the field of beneficiary selection. Municipalities have been given the option to develop their own policies or use a model policy as a starting point to develop their policies, provided that they adhere to a provincially defined set of selection elements.
In January 2011, the Western Cape Premier gave the instruction that 1000 matriculants be given the opportunity to work in the Western Cape Government to obtain work experience and training, and in response, the Department of the Premier set up the Premier's Advancement of Youth, or PAY Project. We have just appointed our quota of 30 interns, who started work for a 12 month period on 15 March 2012. The interns consist of 6 African females, 3 African males, 7 Coloured Males, 8 Coloured females, 3 White Males.
We have also engaged the youth through hosting the Provincial Youth Summit held on the 19th and 20th March at the Cape Town International Convention Centre. Over 140 youth organisations representing a wide range of interests were invited to the summit. Some of the resulting resolutions were:
Finally, I am optimistic about the upcoming 2012/2013 financial year. We have a budget of R1 725 180 000, and a three year MTEF of R5 265 430 000. Our non-financial targets for 2012/2013 are:
I believe the new and innovative measures we have put in place as a Department will enable us to deliver services better together with all stakeholders involved in human settlements. This will ensure that everyone who needs a housing opportunity is provided for, including backyarders, informal settlement residents, people living in overcrowded houses, Gap Market members and those requiring rental units.
Finally, I would like to thank all the staff of the Western Cape Human Settlements Department for their professional and dedicated work this last year, often under demanding and rapidly changing conditions. The upcoming Govan Mbeki awards will formally acknowledge and reward excellence for the role our Department has played amongst the multiple stakeholders in human settlements delivery. I would also like to extend a special mention of thanks to the Head of Department, Mbulelo Tshangana, for his competent operational leadership.
Thank you.