Honourable Speaker,
Honourable Premier, Mr Rasool,
Provincial Cabinet Colleagues,
Members of the House,
Mayors, Municipal Managers, and local government leadership,
SALGA Western Cape,
Partners in Service Delivery,
Invited guests,
Comrades and friends,
Ladies and gentlemen

Soon after I assumed my portfolio, I had a wonderful experience in Gansbaai. I was in Gansbaai in November 2005 to hand over houses, ofwhich 150 have been allocated to African households, 174 to Coloured households, and 64 to White households.

In response to receiving the keys to his house, an elderly man called Piet Kleinhans recited a poem, a few lines of which I quote below:
Maar verseker moet julle weet, hier waar ons vandag staan
Julle goedheid en liefde vir ons, vir altyd in elke eienaar se hart 'n pad gebaan
Dankie klink so skraaf en min, die klank is leeg en hol
Dan wil ons dit vandag uitskree, onverbeterlik, hoera, julle was in die kol.

This is when I love my job. To see the joy on Oom Piet's face, to know that my Department was able to build him a house and improve hislife, is indescribable. To see that government's key objective of assisting the poor, be they Coloured, African, or White, is heart-warming.To see the age of hope becoming a reality is fulfilling.

We have done this time and again during the last year. We built a total of 16,053 houses and serviced 18,412 sites, which represents 34,465housing opportunities. This exceeds the targets set last year. We have delivered throughout the Province, including 61 houses in Kranshoek(Bitou), 185 in Lutzville (Matzikama), 120 PHP houses in Thembani (Drakenstein), 800 serviced sites in Middelpos (Saldanha Bay), and500 sites in De Doorns (Breede Valley). In the City we have delivered 727 houses in Macassar, 1875 serviced sites in Delft, 1160 servicedsites in Mitchell's Plain, 3105 houses in Nomzamo Sanco (Hout Bay), and 647 houses in Kuyasa (Khayelitsha). This is just a selection ofthe houses and serviced sites that have been delivered in the Province.

We achieved 100 percent expenditure of the housing conditional grants allocated to us, which includes the R77 million rolled over from the2004/05 financial year and the R456 million allocated for the 2005/06 financial year. Over and above this, various provincial departmentscontributed R40 million for human settlements, given the urgency of the needs in this Province. In effect, my department spent 107% of thefunds allocated to it.

I have instructed my Department to speed up delivery even more and ensure that our full housing conditional grant is spent by December2006. We are well ahead of schedule. With less than two months of the new financial year gone, we have already spent R97 million, whichis R12 million more than what we projected to spend by the end of June.

Yet I cannot promise you that all the Oom Piet's of this province will receive a subsidised house in 2006, or 2007, or even 2008. The housingbacklog is in the region of 360,000 units, and we know this cannot be met with existing resources. Even though my department achieved100 percent spending, we were not able to provide more than 16,053 top structures. The significant increases in funding in the coming yearswill not meet the existing demand, and that demand is expected to grow even as we are addressing the backlog. I find this part of my jobvery difficult.

Thus in looking back on the past year, I can say that we have done well. I must also say that circumstances compel us to do better.There are many people in this province living in very distressed circumstances. They do not have access to the most basic sanitation, andthis exposes them to crime when they visit isolated areas to relieve themselves. Their living circumstances are unhygienic, which exposesthem to diseases. Their shacks are vulnerable to the elements, which expose them to rain in winter and fires in summer.

One day everyone will have a secure roof over their heads. In the meantime it is unacceptable that they should live in conditions that canonly be called inhumane. We must build a better life for them now. We must improve their conditions so that they have access to cleanwater, to adequate sanitation, to a safe, hygienic environment. We must move beyond the brick and ensure that those not living in brickstructures are living in humane conditions.

I am committed to making this a reality for the people of this Province, and I am achieving it through a variety of initiatives. My departmentis upgrading informal settlements through the provision of basic services, providing emergency assistance to people living in unsafeconditions, and fast-tracking the provision of basic sanitation to all.

Upgrading of Informal Settlements Programme

Let me tell you about the Upgrading of Informal Settlements Programme (UISP). This programme delivers services to families in informalsettlements on a phased basis. The provision of basic services brings relief to many families, and is followed by the provision of a higherlevel of services and finally top structures.

One example of this is De Doorns, outside Worcester. Members of the De Doorns community embarked on a series of protests last year todemonstrate unhappiness with their living conditions. After I visited the area and addressed the community, a joint team of municipal andprovincial officials was established to fast-track the provision of basic services to the community. Within weeks, the installation of the firstphase of basic services had begun. Many thanks to Minister Essop for the timeous approval of the Environmental Impact Assessment.

This is just one phase of the plan in De Doorns. There are 1381 informal structures in three areas namely, Maseru (403 informal structures),Hassie Square (227 informal structures) and Ekuphumleni (751 informal structures). In addition there are an estimated 1400 familiesliving as backyard dwellers in the De Doorns area. We are currently implementing a plan whereby about 1000 of the informal structures arebeing relocated to the area south of the N1, which is above the 1:50 year flood line. The move above the flood line is critical, as it protectsresidents from flash floods.

This is one of the 16 projects worth R366 million that have been approved as part of the UISP. In the City of Cape Town some of theseprojects are Enkanini (1,600 erven) and Silvertown (1,316 erven) in Khayelitsha, and Wallacedene (4,459 erven) in Kraaifontein. Some ofthe other projects are Knysna Vision 2002 (600 erven), Bossiesgif in Plettenberg Bay (1,300 erven), Asazani/Zinyoka in Mossel Bay (600erven) and of course De Doorns.

Emergency Housing Programme

A similar programme is the Emergency Housing Programme (EHP). This programme provides temporary assistance in the form of secureaccess to land, basic services, or shelter in cases of exceptional housing need. Municipalities use the EHP to bring relief to communitiesdevastated by shack fires by issuing emergency starter kits consisting of corrugated iron sheets, wood, a door frame and a window, nailsand hinges, and PVC sheeting. Although it cannot be regarded as adequate housing, it has brought at least immediate relief for those indespair.

A total of 29 projects to the value of about R200 million have been approved. These projects have included the provision of emergencyhousing to people living within a rail reserve in Khayelitsha, and the relocation of and provision of basic services to 413 households inClanwilliam, 2,000 households in Grabouw, and 800 households in Middelpos, Saldanha Bay. Over 25,000 households will be benefitingfrom such emergency assistance.

A feature of our emergency housing programme is the establishment of temporary relocation areas (TRA's). In the City of Cape Town theseare located in Delft, Boystown, and Philippi. The relocated people who qualify for project-linked subsidies move from the TRA's to theirpermanent homes as housing projects are completed.

Let me give you a very real example of our emergency housing assistance. Soon after I took over this portfolio, I drove out to Bonnievaleaccompanied by officials from my Department. We drove through beautiful scenery, only to be confronted by a very upsetting situation.Some 67 families were living in appalling conditions next to pig sties and the town's refuse dump. The only municipal services were a watertank with some taps and 4 toilets, of which only one was serviceable.

I forged both short- and long-term solutions with the Breede River / Winelands Municipality. This urgent short-term plan initiated shortlybefore the elections, by the previous municipal council, was to move these families further away from the pig sties and dump site. Thisplan however has been delayed due to the challenges brought about by the change in municipal council but will resume as a priority withinthe near future. A communal septic tank and French drain was constructed, above which 10 toilet units will be erected. Next to this fourwash bays were supplied. An additional 11,000-litre water tank will be supplied and the access road will be upgraded. In the longer term,the municipality has planned a housing project of 600 units catering for the 67 families. The proposed new housing development is welllocated only 500m from the centre of town.

One of the events that I remember was the arrival of a woman, Mrs Heidi van der Merwe, who came with a bakkie full of building materialfor two dwellings. With such partners in development, we can indeed meet the basic needs of our people.

Provision of basic sanitation

When I hear the term "bucket system," I shrink back in revulsion. This system is in use throughout our Province, and it is not an acceptablelevel of sanitation. After the izimbizo held in our Province last year, during which the bucket system was raised time and again, our Premiersaid that this situation cannot continue. This call has been echoed by our President, who has stated unequivocally that the bucket systemwill be eradicated.

There are many in our Province who do not even have access to the bucket system. We therefore need to go beyond eliminating the bucketsystem and ensure that all residents have access to adequate sanitation. We need to focus on the basics.

In this respect, I have commissioned a detailed study of the sanitation backlog in the Province, so that I am in a position to develop asystematic plan to provide basic sanitation for all by 2010. The study is being guided by a Steering Committee comprising my Departmentand the Departments of Water Affairs and Forestry and Agriculture. The final report will be available in September 2006.

We cannot stand by in the meantime. My department is driving a "bucket eradication" programme in the Project Consolidatemunicipalities of Theewaterskloof, Kannaland and Cederberg, and our projects in De Doorns form part of this initiative. In partnershipwith the DBSA, we will make technical expertise available to municipalities for this programme.

I have also urged all municipalities to make use of their MIG allocation and own funding to extend basic sanitation in their areas. AltogetherR6.9 million of special MIG funding was allocated for basic sanitation for 2005/06. Drakenstein, Hessequa, and Bitou have already spent100 percent of this funding, and Stellenbosch, Theewaterskloof, Oudtshoorn, and Knysna are making good progress.

A special MIG allocation for basic sanitation has again been made available for 2006/07, and R14 million will be allocated to themunicipalities of Matzikama (R2.7 million), West Coast District (R2.4 million), Overstrand (R1.1m), Kannaland (R2.3 million), MosselBay (R2.2 million), and Eden District (R3.8 million). This focus on basic sanitation is in addition to the provision of 18,412 serviced sitesacross the Province, all of which have an acceptable level of sanitation.

In traveling across our Province, I have come across many situations where communities living in pre-1994 housing have toilet facilitiessome distance from the main dwelling. This creates difficulty of access and puts people in harm's way at night. I engaged with theMunicipalities of Cape Agulhas and Mossel Bay and authorised them to access funds in the Special Operating Account for the provision ofablution facilities. My Department is exploring how to roll this out more widely.

We are leading the country with 100 percent expenditure of our R297 million MIG allocation. Despite this, we have not been able to makesignificant inroads in the provision of basic sanitation.

We will need additional resources if we wish to have an impact on unacceptable sanitation situations. Together with our partners ingovernment, I will find a solution to this.

Disaster Management

Our disaster management programme also helps people in distress. We have effectively dealt with a range of serious disasters in the pastyear. In June and July 2005 there was extensive flooding in informal settlements. The Province experienced 5842 fires, of which 2793 wereveld and forest fires. There were 306 fires in informal settlements and more than 3,000 families were affected.

The Province assisted municipalities with R4.5 million for aerial fire-fighting and allocated R1.25 million to district municipalities toupgrade their fire-fighting vehicles. This was the first year that aerial fire-fighting was used to good effect in battling shack fires in someinformal settlements.

We are working with municipalities to improve their fire-fighting abilities and commissioned a study to assess how much funding isneeded to bring our fire-fighting capability up to standard. We will explore how the significant funding needs, estimated at R419 millionover five years, can be met. We are also finalising a standard fire by-law, which will include provision for holding people responsible forsetting fires.

I would like to pay homage to those who helped with fire fighting and other disasters, and to congratulate all the fire brigades ofmunicipalities, SANParks, Cape Nature, Working on Fire, SAWS, SANDF, SAPS, EMS and volunteers. I must also mention theinvaluable assistance of the many Community Development Workers, who distributed food parcels and blankets and assisted with reregistrationof IDs after the fires.

We established a provincial Emergency Management Centre that accommodates ambulance, fire and traffic services as well as disastermanagement line functions. The Centre, which is located at Tygerberg Hospital, was launched in December and is now fully functional.This principle is being duplicated on district municipal level, with District Emergency Centres established in the five districts and in theCity of Cape Town.

So we are doing well, but we can still do better. I am concerned about communities that are vulnerable to certain disasters, such as fire andflooding. The Training, Education, Awareness and Marketing (TEAM) Programme was launched during February 2006 with theassistance of the Development Bank of Southern Africa. This programme equips residents of informal settlements at greatest risk with thenecessary skills to prevent and respond to disasters.

Candidates will be trained in informal settlements in Masiphumelele, Doornbach, Phola Park, Site C Khayelitsha, Bloekombos, DeDoorns, Kayamandi, George, and Theewaterskloof. Altogether 480 people will be trained in basic first aid, 800 in basic and advancedhome care, and 320 in fire prevention in this financial year. The training has already begun, with 137 candidates trained by 15 May 2006.

Implementing the New Human Settlements Approach

In the rush to deliver houses, we have sometimes overlooked quality in favour of quantity, and we have built houses on land that is easilyavailable but far from economic opportunities. We have done well to deliver so much in so little time, but we must do better. We must movebeyond the brick and create integrated and sustainable communities.

The Breaking New Ground policy unveiled last year tells us how we can do better. We must do things differently. Our communities need tobe located close to economic opportunities. Our communities need to be integrated in the Gansbaai project I spoke of earlier, black andwhite are still residentially segregated.

We can no longer tolerate urban sprawl, which is financially and ecologically unsustainable, and we need to densify our settlements. Oursettlements must be neighbourhoods which include recreational, educational, health, and social facilities. This small memento of thisBudget Speech represents our approach, namely the creation of dignified living spaces.

In an effort to practically implement the Breaking New Ground policy, the Department embarked on a broad stakeholder consultationprocess that culminated in the hosting of a successful Sustainable Human Settlement Summit on 24 & 25 November 2005 in Stellenbosch.The key message was "Beyond the Brick: From Inspiration to Implementation," which is also the theme of this speech.

The provincial Human Settlements Strategy has evolved throughout this consultation process. It will be finalised in June and will be rolledout in the Province by the end of December. When I am asked whether I have a plan to address the overwhelming needs of those withoutshelter in this Province, I can now say that there is a plan, and I encourage all stakeholders to continue to engage with it and to be ourpartners in making it a reality.

The goal of the Strategy is to ensure that all residents live in human settlements that are able to absorb growth and further migrants.Migration remains one of the major challenges of the province and a report prepared by my Department provides a clearer understanding ofthe movement of people. This has formed the basis for discussions with the Eastern and Northern Cape Provinces around joint planninginitiatives.

There are a range of other components to the strategy. In partnership with the Department of Public Works and Transport andEnvironmental Affairs and Development Planning, evaluation criteria are being developed that will ensure that economic, social andenvironmental sustainability are taken into account in the approval and development processes.

Identifying Suitable Land

The availability of suitable land for housing development, and more particularly for the poor, is one of the major reasons why housingdevelopment is still lagging in some of the municipalities of the Western Cape. The Department has completed a land audit in the 24 localmunicipalities outside the Cape Metropolitan Area. Maps showing the location of all municipal and state land have been completed foreach municipality, together with a database containing information on ownership, extent, zoning, suitability for human settlements, andsuitability for other types of development.

Although the audit makes information available regarding public land, it does not mean that these properties are automatically availablefor development.

One of the crippling factors is the fragmentation of the administration of public land among the various organs of state. Each administratorof public land has its own objectives and perspectives on what it wants to achieve with the land, and very little interaction takes placebetween role players to foster synergy and release land quickly. As a result, public land that is suitable for human settlements is often usedfor non-strategic purposes or sold off to the highest bidder.

Our Human Settlements Strategy will outline a plan for releasing or purchasing land that is suitable for human settlements in the Province.It will also make institutional recommendations for the co-ordination of the release of public land.

Rental Housing

My Department's considerable property portfolio, which consists of 15,000 dwellings and serviced sites, will be used to achieve thestrategic aims of the Human Settlements Strategy.

The Department is finalising a policy framework that will see a major write-off of long outstanding debt on the purchase and rental ofhouses on the books of my Department and municipalities. The main aim of this exercise is to promote home ownership and to restore thedignity of those who have been living under the threat of eviction.

Our priority will be to write off the debts of the poor and people who are receiving state grants, after which we will also attend to the othercategories of debtors. The programme will be phased over 5 years because of funding constraints. The maximum benefit which anindividual will be receiving is R31,929, depending on income, and a debtor is expected to settle his/her remaining outstanding debt beforethe grant will be made available. This programme will therefore favour those who have made payments on their debts, and will encourageothers to start paying the shortfall in order to qualify for the discount.

The past year has also seen the approval and implementation of a number of concessions with regard to a particular category of debtors onthe books of my Department which, in the case of Lentegeur, reduced the outstanding debt from R12 million to approximately R4 million.These concessions are now being rolled out to qualifying debtors of the Department in other areas, such as Belhar and Ravensmead.

For those who are renting units, it is important that the rights and responsibilities of both owners and tenants are upheld.

My Department's Rental Housing Tribunal is responsible for resolving disputes between property owners and tenants, and has the powersof a court of law. Every case referred to us is eventually resolved.

The Tribunal has continued its good work this year. The number of cases referred to us is increasing all the time, and this will increase evenmore with our new call centre. Organisational improvements have made it possible to double the number of hearings held, and we willintroduce a computerised case management system in order to produce shorter turnaround times.

Lead and Pilot Projects

Over the past year we have developed a range of lead and pilot projects that will showcase the various aspects of the Human SettlementsStrategy. Lead projects demonstrate best practices for Sustainable Human Settlement Development, while the selected pilots serve as atest, trial or model.

One of the lead projects is in Site C (Khayelitsha), where my plan is to de-densify the area through relocation of some residents to nearbypieces of land, upgrading of the existing area, and provision of public amenities. Another lead project is in Clanwilliam, where a centrallysituated golf course will be developed for human settlement and a golf course will be established out of town through a land swap. A thirdpossible lead project is in Green Point, Cape Town, where human settlements will form part of a much larger mega-project connected withSoccer World Cup 2010.

There are four pilot projects. There is an ambitious project in Plettenberg Bay, where the Council plans to fundamentally re-structure theapartheid landscape by relocating the Central Business District, integrating and densifying the main activity corridor, and upgrading thecentrally located Bossiesgif informal settlement. This project will be launched in the next month.

I have approved pilot projects in Dido Valley (Fishhoek) and Somerset West, where low-cost housing will be subsidized by upmarketresidential developments. I have also approved the Brackenfell / Blueberry Hill project, where 73 hectares of provincial land will bedeveloped for employer-assisted housing.

The N2 Gateway project is our best-known pilot project, and steady progress has been made. The most visible part of the project, withinLanga alongside the N2 highway, comprises 705 rental units that will be completed within the next week. These two- and three-storeywalk-up apartments have been tastefully landscaped and will offer a new kind of quality of life to residents. They are highly sought afterand a careful beneficiary identification process is currently underway. Planning is proceeding for the rest of that Joe Slovo area, and welook forward to building houses there later this year.

The N2 Gateway includes the experimental in situ development of New Rest informal settlement that adjoins Guguletu. The infrastructureis complete for about 50% of the 1,155 sites, and the first houses will soon follow. In Delft two large projects will provide about 12,000housing units, and the earthworks and servicing of these is well underway. Waiting to occupy such houses are more than 3 000 householdsin Temporary Residential Areas, many of them there as the result of fires in Langa.

Partnerships

Every one of the lead and pilot projects would not be possible without partnerships. I mentioned earlier that we as a Province do not havethe resources to tackle all of the challenges that we face. We must marshal the resources, skills, and efforts of stakeholders in the WesternCape and build a better life together. We have been working together with municipalities, we have entered partnerships with the privatesector, we are joining hands with non-governmental organisations and financial institutions, and we are working closely with provincialand national departments.

We will expand on this, because we will have a much greater impact if we pool our resources and move in the same direction.

In this respect the Department concluded a Memorandum of Understanding with the National Finance Corporation (NHFC). The Department provides land policy guidance and subsidies in certain areas while the NHFC contributes financial and technical expertise. Two Projects have already been launched through this partnership namely the pilot projects of Brackenfell and Blueberry Hill outlined above. My Department concluded another agreement with Communicare for a similar partnership relating to the social housing sector. A public building is being made available in Observatory and will be converted into rental units.

There are a number of other exciting partnerships in the pipeline. We are working together with Thubelisha Homes, which is a national public housing company to combine sites in Kensington and Pine Road in a project that will achieve the objectives of integration and sustainability. Old Mutual, Nedbank, and the City of Cape Town are working with us to provide gap housing at Washinton Square in Khayelitsha. Standard Bank is involved in our Ministerial Pilot Project in Plettenberg Bay and Absa and Zanethemba Trust are discussing a project in Khayelitsha with us. Finally the Berlin University of Technology is contributing to the establishment of a "Habitat Unit" resource centre in the Department

People's Housing Process

Our key partnership is with communities themselves, and the People's Housing Process (PHP) is an example of this. PHP projects aredifferent from conventional housing projects in that much of the labour is provided by beneficiaries themselves. Their "sweat equity"leverages additional resources, which in some cases makes it possible to build larger houses.

For the past few years, PHP projects in South Africa have not met expectations in terms of both quantity and quality.There was poor delivery owing to poorly informed beneficiaries and communities, inexperienced suppliers, and corruption.

Over the past year, we have ensured that beneficiaries are more empowered in these projects. Our partnership with the Department ofLabour has ensured that beneficiaries of new projects can undergo a 60-day house construction programme to assist them in the building oftheir own homes.

Given the importance that we attach to the PHP as a delivery mechanism, we are investigating slow-moving and blocked projects. In somecases we are contracting Thubelisha Homes to complete these projects. The drive to improve PHP delivery will be supported by our strongpartnerships with NGOs, such as the Development Action Group, and the assistance of the Cuban advisors.

The National Programme of Action requires all of us to be vigilant about corruption, and my Department is working in partnership with theSpecial Investigation Unit (SIU) to bring all perpetrators of corruption in PHP projects to book. To date seven projects have been handedover to the SIU for investigation, with at least one person being charged with fraud. More people are expected to be charged.

Our flagship PHP project is "Project 2" in Mbekweni, Paarl. The houses combine waste streaming, site resources, and sweat equity. Theresult is an impressive double-storey stone house made from recycled materials and natural stone from the site. The structure isaesthetically pleasing, insulated, energy efficient, and replicable, and it has featured in the news several times. There is a youth learnershipproject attached to this project, with Umsobomvu as our partner.

In taking PHP forward this year, it is important that beneficiary communities fully understand the PHP philosophy. This calls for tightpartnerships with community leaders, municipalities, and other role-players. Our internal systems, from project approval to projectclosure, will ensure that all funds allocated are fully utilised in the building of houses. Our recent process audit has enabled us to improveprocedures and controls, so that we are able to respond quickly to slow moving projects and indications of fraud and corruption.

We are also changing the organisational architecture of the support organisations to ensure that these structures have the required skills andexpertise to ensure housing delivery. We have found that weak and poorly resourced support organisations contribute significantly toproject failure and financial irregularities. Lastly, we are including elements of empowerment in all PHP projects. Our relationship with theDepartment of Labour can go a long way in providing unemployed beneficiaries with building skills.

Siyabulela: Empowering Women and Youth

This year we are commemorating the 30-year anniversary of the Soweto Uprising and the 50-year anniversary of the famous Women'sAnti-Pass March to the Union Buildings. Following our Premier's call, I have initiated a number of Siyabulela ("thank you") projects,which are aimed at empowering women and young people. I am committed to establishing youth units in all five district municipalities andin the metro by August 2006. My Department is in the process of assessing the specific technical and other support that we will provide tothe district municipalities.

My Department, in collaboration with the Western Cape Youth Commission, has also completed a process of identifying 10 young peopleto whom bursaries will be allocated to the value of R20,000 per year for the duration of their studies. The bursaries will be in the field ofscarce skills in the building environment and will include an internship in the Department.

We are also developing a leadership development programme for women councillors. A service provider has been appointed and theprogramme will be rolled out by June 2006.

Intergovernmental Relations

Our relationship with municipalities is informed by our national Programme of Action and the five-year Strategic Agenda for LocalGovernment. Province and local government are required to work together in five key performance areas, namely the provision of basicservices and the promotion of local economic development, financial viability, and institutional transformation and good governance.

I have invested considerable energy in strengthening the relationship between provincial and local government. Since I assumed thisportfolio, I have visited all the municipalities in the Province on more than one occasion. I believe that we can achieve so much more if wework together and align our resources, plans, and activities.

The key initiative in this regard has been the Local Government MTEC (Medium Term Expenditure Committee) process. Together withProvincial Treasury, we embarked on a process to bring the provincial and local spheres of government together to find synergy betweenpriorities and resource allocations. There have been three sets of budget interactions between provincial departments on the one hand andmunicipalities on the other, which took place between September 2005 and January 2006.

This has been followed by an even more thorough engagement. The Ministers of Finance, EnvironmentaI Affairs, Planning, and EconomicDevelopment, and myself, along with our senior officials, have spent the last three weeks in detailed discussions with municipalities abouttheir local economic development plans, their Integrated Development Plans, and their finances. It has been an extremely useful process. Ithink that the province understands the challenges of municipalities much better and is in a position to provide improved support, and Ibelieve that the municipalities more than ever see us as their partners.

The MTEC process has been complemented by the establishment of new intergovernmental structures in the Western Cape. MyDepartment was central to the process of establishing the Premier's Co-ordinating Forum (PCF), as well as the District and Metro CoordinatingForums (DCF and MCF). Technical forums have been established to support the MCF, and significant work has taken place onthe development of a long-term strategic development framework for the City.

I have taken a particularly active approach with respect to the establishment of the new Municipal Councils following the municipalelections on 1 March 2006. My legal team provided guidelines for the constitution of the Councils and a generic agenda for the first Councilmeeting, and provided a "Help Desk" to field questions from Councils during their first meetings. I am happy to say that all of the Councilshave been successfully constituted.

Such an approach is particularly needed given the election results. A total of 26 of our Councils are not controlled by a majority ofcouncillors from one party. The coalitions that have resulted are vulnerable to instability, and this requires constant monitoring and supportto ensure that service delivery is not affected. In such a situation, administrative stability and a continued focus on the National Programmeof Action are paramount.

I have requested that all Councils with vacant municipal manager posts fill these posts by July 2006, and that they appoint managers whopossess the municipal manager competencies contained in national guidelines. To assist them, I have appointed a service provider tosupport the recruitment and competency testing of their short-listed candidates.

I will be monitoring key indicators in municipalities in the coming year, and will establish a comprehensive municipal monitoring systemto achieve this. There is information about municipalities throughout the various sections of my Department, and it can also be found inother provincial departments and government agencies.

In order to obtain a complete picture of what is happening in municipalities, all of this information needs to be collected, collated, andanalysed. The results of the analysis will be of benefit to both the Province and municipalities.

Integrated Development Planning

This year will see intensified effort to further improve on the strategic planning and implementation ability of municipalities. The Premieris now required to sign off on municipal IDPs in order to improve intergovernmental planning and co-ordination. Municipal integrateddevelopment plans should indeed be a reflection of the whole of government's interventions in a geographic area. The newly created intergovernmentalstructures will play a key role in cementing co-operation for improved delivery.

My department is working with the Provincial Treasury to assist municipalities to improve and update the socio-economic information thatunderpins the strategic planning and implementation done by municipalities.

We are also placing great emphasis on the formulation of credible and implementable Local Economic Development (LED) plans, asmunicipalities play a key role in achieving the objectives of government's Accelerated and Shared Growth Initiative (Asgisa). We areworking with the provincial Department of Economic Development to assist municipalities to develop their longer term strategies andimprove the LED components of their IDPs.

The next generation of municipal integrated development plans, which are to be completed by March 2007, will be underpinned by thephilosophy of sustainable human settlements. This is fundamental to our drive to deal with the apartheid landscape that persists in oururban and rural areas.

Hands-on Support

We have provided significant support to municipalities with respect to capacity-building, and this has been done in close partnership withmunicipalities. District municipalities were encouraged to initiate training courses and co-ordinate training needs with the various localmunicipalities in their areas of jurisdiction. Upon the submission of the training business plans, an amount of R200,000 was transferred toeach district municipality. It is expected that 320 officials will benefit from these funds.

We are also developing the specific skills that municipalities need to support the development of integrated human settlements. Inpartnership with the Department of Education, my Department has embarked on the development of a training course on SustainableHuman Settlement Development. We have targeted decision-makers in the ten Project Consolidate municipalities, such as Mayors,Councillors responsible for the Housing Portfolio, and Municipal Managers. This course will start on 30 May 2006.

These are some of the training interventions with which we have been involved. I am satisfied that we have done much in buildingmunicipal capacity in the past year, but I also know that we can do better.

During 2005 my Department conducted a comprehensive capacity audit of our municipalities and in October 2005 we finalised ourcapacity building strategy. It consists of ten interventions, which include the development of competency profiles, the building of expertisearound integrated human settlements, the development of centralised resources for municipalities, peer advice and external mentoring,central pools of expertise, ward committee training, councillor development programmes, sharing of best practices, and the promotion ofinternship programmes.

To implement this strategy my Department has established a reference group that consists of key municipal managers, the LocalGovernment Seta, SALGA: Western Cape, Provincial Treasury, and the Institute for Local Government Managers.This reference group has been invaluable in identifying priorities and will provide expertise in finalising all the guideline documents to bedistributed to municipalities.

The implementation of the strategy is well under way. A competency profile of a municipal manager was finalised in February 2006 andsubmitted to the national Department of Provincial and Local Government, which took it into account in the development of a nationalguideline document on generic senior management competency profiles for local government.

A key focus of our capacity building strategy is on councillor development. After the municipal elections on 1 March 2006, many newcouncillors were elected to office, and they will need training and support to enable them to meet their challenges. We launched this processwith a successful councillor Summit that was held on 23-24 March 2006, during which various capacity-building sessions on localgovernment topics were held. The champion for Councillor development is SALGA Western Cape, and we will partner them in fundingand rolling out a comprehensive councillor development programme.

We will implement many other components of the strategy this year. We are identifying and writing up best practices among ourmunicipalities. The first issue of our departmental newsletter to municipalities, called "Municom," will be used to communicate municipalbest practices and "good news" stories (of which there are many). We are also developing centralised resources that are critical tomunicipalities, such as standard by-laws and policy guides, which will stream-line municipalities' work and cut down on duplication.

Local Government Sustainability

I have a great concern about the long-term sustainability of municipalities, given the significant challenges they face in attracting andretaining skilled staff. In particular, many municipalities lack the technical capacity to plan, implement, operate, and maintain municipalinfrastructure. This can impact upon the municipality's ability to deliver basic services.

I am launching a number of initiatives in this regard. First, I am encouraging municipalities to appoint more interns in all municipaldisciplines, because I believe that this is the only way that we can ensure a continuous supply of skills. Second, my Department is exploringvarious "shared services" models, whereby municipalities make use of a pool of skills and expertise. This will enable municipalities toprocure skills more quickly and cost-effectively, and will address some of the retention issues.

Financial Sustainability

Our capacity building programme will also support municipalities to address the transversal audit findings identified by the Auditor-General in the financial statements of municipalities for the year ending June 2005. I have met twice with the Auditor-General this year todetermine the financial performance of municipalities and the general areas of concern.

Of the 30 municipalities in the Western Cape, 28 audit reports have been received. A total of 15 are unqualified reports, which is a 20percent improvement over last year and covers the first year that all municipalities had to comply with the MFMA.

From the audit findings and general trends, it is clear that there is an improvement in the financial governance of municipalities, yet there isstill much to be done.

In partnership with Provincial Treasury, my Department has already started with a general plan of action to support municipalities toaddress the main areas of concern that were identified by the Auditor-General. Our plan of action entails the following:

• With regard to debtor control, we will issue good examples of credit control policies and also share best practices.
• The movement in outstanding debtors will be monitored by the Provincial Treasury on a quarterly basis;
• With regard to asset management, my municipal infrastructure directorate has already embarked on pilot projects to compile allinclusiveasset registers in two municipalities. The pilots are being reviewed, and a plan is being developed to roll out this programmeto all the municipalities in the Western Cape.
• With regard to the late submission of financial statements, most of the financial system problems that were experienced by somemunicipalities were resolved. We will monitor the situation very closely and provide hands-on support jointly with the ProvincialTreasury.

Specialised Support to Municipalities

A few municipalities have experienced serious financial crises in recent years. Outstanding progress was made with the supportinterventions and implementation of recovery plans in the Kannaland and Cederberg Municipalities. There is still some work being done toensure long-term sustainability, and therefore R1.5 million and R2.5 million is budgeted for these municipalities respectively for thecontinued implementation of their recovery plans.

These are good examples of where partnerships and co-operative government lead to positive results. Our partners in these efforts havebeen the national Department of Provincial and Local Government, the Development Bank of Southern Africa, Saldanha BayMunicipality, and the Eden and West Coast District Municipalities, whose support I warmly acknowledge.

Due to the quick success in the Cederberg case, our Premier tasked my Department to write a best practice document. A summarisedversion was published in our newsletter "Municom," which was distributed in April 2006.

Project Consolidate

Nothing better exemplifies the hands-on support that we wish to provide than Project Consolidate. There are 10 municipalities that formpart of Project Consolidate, which is a national programme to increase the managerial and implementation capacity of selectedmunicipalities. A feature of Project Consolidate is the intergovernmental co-operation that supports all the initiatives.

All ten Project Consolidate municipalities have compiled Municipal Action Plans (MAPs), which outline the interventions required toaddress service delivery and institutional transformation challenges. Municipalities have begun the implementation of the MAPs with thesupport of service providers, the provincial project management unit (PPMU), the capacity building unit of the Department, sectordepartments, and external development agencies. The MAPS have also been aligned with key issues that emerged from the recently heldizimbizo, and interventions are being followed up with provincial sector departments.

With respect to basic services, the housing and sanitation projects in Project Consolidate municipalities were fast tracked, with sectordepartments being mobilized to unravel red tape. Twenty projects were initiated, all of which were completed by March 2006.

Another major focus is the formulation of credible local economic development plans in Project Consolidate municipalities. A multidisciplinaryproject team has been established to develop strategies and an implementation plan, with Small, Micro and MediumEnterprises (SMMEs) as the key focus area.

Significant support has been provided with respect to financial management, institutional restructuring, and public participation. Revenueenhancement and cost recovery plans are being developed for implementation and institutional restructuring is taking place, with criticalposts being filled and organograms being redesigned to ensure alignment with functions. Infrastructural support is being provided to wardcommittees, and two rounds of anti-corruption workshops have been completed in targeted municipalities.

Project Consolidate shows us what "hands-on support" looks like. We have learned from Project Consolidate how to co-ordinate ourefforts as spheres of government, and the lessons we have learned will be applied to the other hands-on support initiatives provided by theDepartment.

We have also learned about hands-on support from the Integrated Sustainable Rural Development (ISRDP) and Urban RenewalProgrammes (URP). We are placing less emphasis on these Presidential Nodes as stand-alone programmes, because my team has managedto incorporate them into all areas of our work. For example, my Department developed one single plan of operations that includes the workof CDWs, Project Consolidate, and the Nodes.

Partnership with Communities

Honourable Speaker, if we do not communicate our priorities and constraints to our people, then we will be failing in our responsibility asgovernment. It is my intention to ensure that communities are informed about the services and goods that the government is offering tothem and to ensure government services and goods are made available at convenient points to communities.

Our Community Development Worker (CDW) Programme is at the vanguard of this effort. We have appointed 200 CDWs in ourDepartment and have deployed them strategically in the Presidential Nodes (Khayelitsha / Mitchell's Plain and Central Karoo) and inProject Consolidate municipalities. Their job is to bring public services closer to people and to act as catalysts for development. In the pastyear they have assisted evicted farmworkers, initiated food gardening programmes, trained and counseled prison inmates, facilitatedworkshops for the African Peer Review Mechanism, and helped to start "clean and green" projects in Breede Valley Municipality.

I'd like to give you an example of their efforts. In February 2006, 15 CDWs assisted the Department of Justice and ConstitutionalDevelopment to trace the beneficiaries of child maintenance grants in Khayelitsha, Wynberg, Philippi, Mitchell's Plain, and Athlone. TheCDWs were able to trace about 800 beneficiaries within a period of two weeks, which earned them the commendation of the nationaldepartment.

In the coming year the CDWs will deepen their involvement in communities. They will facilitate the training of new ward committeemembers, support public participation activities and monitor and evaluate such mechanisms at ward level, organise a Municipal Speakersconference, host a public participation conference, and communicate housing-related processes and other provincial information tocommunities.

The second group of 250 CDW learners started their programme in September 2005, and are due to finish their course this month. Some ofthe learners have already established soccer teams for the youth in Grabouw, where drug abuse among young people is a problem. I wouldlike to thank all the stakeholders for their valuable contributions and continued support for this programme, including local municipalities,the University of the Western Cape, and the Local Government SETA.

Community Empowerment

Another aspect of our partnership with communities is empowering them to understand their housing rights and obligations. In the comingyear, we will roll out a consumer education course for potential and existing tenants and homeowners. My Department will enter intopartnerships with municipalities in order to train the trainers, who will consist of municipal officials, Councillors, and CDWs. Thesetrainers will then roll out training within the communities.

With respect to economic empowerment, the Department has been supporting the Women in Construction Forum on an on-going basis. Inthe coming year, we will provide accredited tender training to 40 members over a three-day period.

We will also empower emerging contractors through training and mentorship. As a pilot project, eight emerging contractors underwent askills assessment process. The next stage is to ensure that they are provided with the necessary training and skills development.

Anti-Corruption

A key platform of the National Programme of Action is the implementation of anti-corruption strategies in government. During October2005, my Department assisted the four pilot municipalities of George, Kannaland, Langeberg and Theewaterskloof to evaluate theirprocurement, housing and appointment policies, with a view to making them less vulnerable for corruption. The same exercise was carriedout with the municipalities of Laingsburg, Prince Albert and Beaufort-West during November 2005. A guideline document is currentlybeing developed by my Department and the national Department of Provincial and Local Government, and it will be distributed during thisfinancial year.

Another initiative that complements the anti-corruption drive is the contract that my department entered into with the Special InvestigatingUnit (SIU) in February 2005. Since then, the SIU has investigated allegations at five municipalities, namely Bitou, Laingsburg,Drakenstein, Theewaterskloof, Central Karoo and the City of Cape Towns' Peoples Housing Project (PHP). This is in addition to otherdepartmental investigations.

I apply my mind to the contents of every report and have also referred certain aspects to the Head of the Legal Services Branch to advise onappropriate steps and recommendations. In the case of Bitou Municipality, the report was referred to the Standing Committee on PublicAccounts and I have asked the Mayor to give effect to the SIU recommendations. In the case of the West Coast District Municipalities,where irregular expenditure for an overseas trip was incurred, disciplinary action was taken. In the Central Karoo District Municipality, theMunicipal Manager was dismissed.

These investigations have brought a new dimension to governance at local level in the Province in that they lay bare corruption andmaladministration where it occurs. It increases the awareness of councillors and municipal officials of their respective roles andaccountability to the communities they serve. The investigations also expose shortcomings that in turn give the municipalities and mydepartment the opportunity to take appropriate action and remedial steps.

Strengthening the Department

I could not have achieved full spending and impressive housing delivery without a well-performing Department. Yet I know that myDepartment can do better, and I have launched a number of initiatives to ensure that the spirit of Batho Pele infuses all the work of theDepartment.

We have established a Help Desk on the ground floor of our building. It is intended to provide information and field housing-relatedenquiries from the public.

The service became functional in November 2005, and in March 2006 alone my Department fielded 656 "walk-in" enquiries and 297telephonic enquiries.

Another area that will receive considerable attention in the coming year is monitoring and evaluation. I have to know on a monthly basiswhether my Department is achieving its goals. The various components in my Department generate reports on a regular basis, and thesehave informed my decisions. But there is a need for this information to be integrated into one system of data and information, for forgingsynergy between the various sources of information, and for analysing this information. This will allow my Department to diagnose areasthat require attention and to take appropriate action.

I will also increase the effectiveness of my Department by evaluating various internal and external business processes related todevelopment of human settlements. In the past year, I asked municipalities to fill in a client questionnaire, which asked questions abouttheir perceptions of my Department's performance. The results of the survey revealed that we are doing well, but that there is much roomfor improvement.

In response, we have established more focused housing delivery sections that can dedicate time to particular activities that may have beenpart of a suite of functions undertaken by one section. This ensures that the outputs of the various sections are of a much higher quality.

The revision of the funding approval process ensures a faster response time for developers and applicants. Queries that may arise during theevaluation of funding applications are addressed immediately as provincial officials have started to develop direct relationships withmunicipal officials and are therefore able to resolve many issues telephonically.

People are the engines of delivery, and I believe that we must continually work towards transforming our staff into a public service thatexemplifies Batho Pele principles. We have exceeded our employment representivity targets for 2005/06.

We have invested heavily in the training of middle and senior managers so as to equip them with the personal and technical skills theyrequire. We are in the midst of the implementation of a diversity training programme that includes every member of staff. We as theDepartment of Local Government and Housing must learn to work together and to be motivated in the first instance by the overwhelmingneeds of our people.

Summary of Commitments for 2006/07

The Department has a budget of R776 million for 2006/07 financial year, and R935 million and R1.02 billion are projected for the outeryears. With the resources allocated for the financial year 2006/07, I commit myself to the following:

• We will spend the entire housing conditional grant allocation of R598 million by December 2006, which will be three months ahead ofschedule;
• We will deliver at least 16,000 houses and 18,000 serviced sites;
• We will develop an implementation plan for providing basic sanitation for all, and roll out at least 10 percent of that plan;
• We will relieve the stress in Site C, Khayelitsha through de-densification and upgrading;
• We will develop a shared services programme together with municipalities;
• We will establish youth units in all five district municipalities and in the metro;
• We will take another 250 CDWs through to graduation;
• We will work together with SALGA Western Cape to provide a comprehensive councillor development programme;
• We will roll out a special leadership programme for women councillors;
• We will provide a training course in sustainable human settlement planning to Project Consolidate municipalities;
• We will assist identified Project Consolidate municipalities with the appointment of their municipal managers;
• We will see an improvement in the Auditor-General's reports on municipalities;
• We will see significantly improved municipal IDPs and LEDs, and they will be aligned with provincial and national strategies andpolicies; and
• We will have a municipal monitoring system in place and an even more efficient Department.

Conclusions

I would like to express my appreciation for all who have contributed to the success of the Department. We have many partners in servicedelivery, and we will not achieve our objectives without them. I express my thanks to the national Departments that have worked closelywith us, especially the Departments of Housing, Provincial and Local Government, Water Affairs and Forestry, and Public Service andAdministration. I appreciate Provincial Treasury's energy and commitment to strengthening municipalities together with us, and value thesupport of other provincial departments such as Environment, Planning, and Economic Development and Public Works and Transport, andAgriculture.

I have had many positive experiences working together with municipalities in this Province, regardless of their political affiliation. I sense acommitment to the objectives of the National Programme of Action, and believe that these can be achieved if we continue to co-operate asclosely as we are.

There are many organs of state and state agencies who have worked closely with us in the past year. The Development Bank of SouthernAfrica has been our partner in numerous projects, and their advice, expertise, and resources are much appreciated. SALGA Western Capehas contributed advice and support to our programmes. Thanks also to the NHFC, Communicare, Thubelisha Homes, the National Youth Commission, Umsobomvu, the Local Government & Water Seta, and the Special Investigating Unit.

I also acknowledge the valuable support of non-governmental and community-based organisations, especially those who participated inour Human Settlements Strategy consultation process and those supporting our PHP and other housing processes. I thank the many serviceproviders who have supported the Department and transferred valuable skills to our staff.

It is important to acknowledge the hard work and dedication of countless officials in my Department, who are ably led by Shanaaz Majiet.We have an "old hand" who is retiring soon, namely Oom Faan Naudé. He has been with the Province for over 30 years, and his wisdom andguidance will be missed. Hamba kahle, Oom Faan, you have earned some time off. Lastly, I would like to acknowledge the presence here ofmy grandfather, Mr Kokie Jantjie, who has been my role model and has had a profound influence on my life.

We have indeed come far, and we have much further to go. My Department has exceeded its expenditure and housing delivery targets, andwe will improve on this by spending our full allocation by December 2006. In doing so, we will be making a strong case for increasedallocations. We will also leverage additional resources through strengthening existing partnerships and establishing new ones.

We have developed a comprehensive Human Settlements Strategy and have initiated numerous lead and pilot projects that showcase theStrategy. It now remains to communicate and implement the Strategy.

We have responded effectively to the many natural disasters that occurred during the past year. We have significantly improved the livingconditions of tens of thousands of people living in distressed circumstances.

This emergency assistance has significant budget implications, and it means that we cannot produce as many top structures as we wouldlike. We will again produce 16,000 houses and 18,000 serviced sites in this financial year. But I would like to make it clear that we are notchasing numbers. Rather, we will continue to make a significant impact on the many people in this Province without adequate services andshelter.

We have come through a series of intensive engagements with municipalities that have strengthened our relationships and laid the basis foreffective, targeted support of municipalities.

I am pleased with the progress that my Department has made in the last year. Again I say: circumstances compel us to do better. We arecompelled to ensure that each resident of this Province has access to basic services, and that we progressively facilitate the provision ofadequate housing for all. We are compelled to support municipalities actively in the fulfillment of their functions. We are compelled to holdhands with our communities and other partners to build a better life together. We are compelled to move beyond the brick throughpartnerships for accelerated and sustainable delivery.