BUDGET SPEECH BY MR MARIUS FRANSMAN, PROVINCIAL MINISTER FOR LOCAL GOVERNMENT AND HOUSING, WESTERN CAPE.
VOTE 8, HOUSING 2004/05
Honourable Speaker,
Honourable the Premier of the Western Cape,
Provincial Cabinet Colleagues,
Members of the House
Invited guests,
Comrades and friends,
Ladies and gentlemen
It is especially a privilege to present this Budget Vote a day after June 16th, that day will forever be accentuated as a turning point for our struggle as a people. A struggle waged to abolish to reverse and put a permanent end to shacks, hunger, poverty, disease, apartheid and underdevelopment.
It is then befitting to dedicate this address to the youth of yester-year, who indeed was the vanguard of our people post 1976. They were the first to overwhelmingly and collectively make organised sacrifice, after the defiance campaigns of the 1960's to answer to the quest for change.
In resolving the housing challenges in this province, we require an appropriate attitude from all, steeped in activist vigilance. We require the attitude of being a vanguard of the people, the attitude of that living, deliberate, heroic example that drives everyone forward as did the youth in SOWETO, the youth in Bonteheuwel and that of Worcester.
A precondition for success, therefore will be in balancing the art of action and plans with the spirit of patriotic duty, where the delivery of housing will not only be seen as a social responsibility but rather a basic human necessity, for which so many, laid their lives to attain.
That the challenge is to create a new culture, a culture of work where the promise of homes is everyone's concern. This task must become a moral necessity for the people of the Western Cape.
As a people, we have to confront ourselves with the question of equality and inequality, of the continuation of separate development, of the reality of every unintended consequence and the disparate impact on the poor in our society.
Mr Speaker, over the past month I have met stakeholders from all walks of life within and outside of the housing sector. I have also had meetings with members of under serviced communities, complaining about the quality of their houses and the slow process of housing delivery.
I am now feeling better acquainted with the challenges lying ahead of me and I am ready to effectively respond to our contract with the people.
A common feature of the kind of people and stakeholder that has knocked on my office door has been that of wanting to get involved and lend a hand.
I am grateful of this overwhelming show of support and dedication to join hands in finding lasting solutions not only to low income/ cost to house, but also answers to questions and spatial planning informing paradigms such as that which was raised in the 2004 State of the Cities Report and says;
"... to what extent have cities addressed the social injustice of Black, Coloureds and Indian residents, overwhelmingly located in apartheid demarcated neighbourhoods, not being able to enjoy equal access to the benefits of urban life?"
To these key questions a wide ranging sector responded to the spatial planning injustice by calling for re-engineering of the city aimed at integration? the young architect scholars in our tertiary institutions volunteered their time and budding skills in suggesting to design an ingenious locally relevant dwelling an offer we could not refuse. In August, I will be privileged in taking part on an exhibition and award ceremony to the most fitting design out of this partnership work.
The placement of the Department of Housing and Local Government under a single Ministry presents an opportunity for integrated and sustainable housing delivery in the province, stemming from co-ordinated work with the sphere of local government which is where delivery takes place.
It is my intention to strategically exploit this essential synergy, to better the lives of the poor and homeless people of the Western Cape.
I am acutely conscious too, that if we look for solutions without mainstreaming the issue of low cost housing, we potentially doom the very people we are championing, to remain part of the second economy.
Our solutions have to create a vibrancy and a recognition of value that stimulates a secondary market and that encourages personal investment. This relates to both public and private investment in the built environment.
Our shortcoming in maximising fortunes brought about by large-scale housing development projects translated onto lost opportunities, which, in a country and a province whose key challenge and success lies in fighting poverty cannot be afforded. It is intended at this stage to develop working communities.
This will be achieved by carefully packaging house designs to settlement patterns informed by beneficiary inputs and other key stakeholder. The spectrum of choice covers options such as, home ownership, rental stock, medium density housing, in situ upgrading, short-term informal settlement upgrading, inner-city upgrading, all impacting on post development life of that community and people.
I must also mention that we are part of the national review of Hostel's Policy, something that will inform the character of our own such dwellings. Cabinet has agreed to a more flexible approach towards technical specifications of hostels as well as considering a mix of ownership and rental as potential solutions. This will feed into our Provincial Housing Policy which we aim to finalise by end July 2004.
At present, the only secondary market in low cost housing is a desperation market, unrelated to the actual public investment. It makes no sense, for example, that people sell houses that taxpayers have spent R25 000 for R5 000 or even R10 000. This sale also excludes people from qualifying for further government assistance. As a goal for the next ten years, this is a context we must redefine. And it will require all spheres of government to partner in the achievement of this goal.
With our Premier emphasizing that this Province is a "Home for All", the contribution of this department is under constant consideration. But for me, all this confronts us with an opportunity to develop non-racial settlements informed by the will and desires of the people enabled by integrated spatial planning where people, for whom development is intended and built around play a leading role.
But also, the essential component for a home is the sense of identification and belonging that it conjures up, something that no other dwelling that a person occupies is able to do. A home is a place of deep value. It is not about size, but about the dignity of the place and space, as Van Goethe once remarked; "He is happiest, be he a King or a peasant, who finds peace in his home".
These values are core to Ikapa Elihlumayo, and the way in which the Provincial Government of the Western Cape responds to the strategic issue of infrastructure investment. Housing is a very visible expression of public expenditure, but in order to maximize the investment, we need to work together as government departments, advancing those programmes that form part of IDP's and endorsed by municipalities.
On Saturday, as our crowds from Delft, Phillipi, Nyanga, Gugulethu, Athlone, Bantry Bay, the CBD and the Waterfront all shared in the passing of the Olympic Flame, we were, for a brief period, part of a common humanity. We could share in the pride and dignity of carrying an international beacon of hope.
Even our modest dwellings were part of that shared dignity. But the flame also reminded me of the stark contradictions in this Province, and how many of the areas that this flame of hope passed through, have also endured the flames of despair and destruction in the past.
This brings me, Mr Speaker, to raise the challenges that this budget seeks to address:
ADDRESSING THE CHALLENGES
The essential challenges facing the provincial department of Housing are, housing backlog, limited budget, and the growing number of informal settlements in the Metro.
The national Housing Minister, Cde Lindiwe Sisulu has dared and committed the country to eradicating informal settlements, with the Western Cape projected to be squatter settlement free by the year 2010. To this we are fully committed and re-orienting our systems to meet the challenge.
The Department has spent over R2.8 billion since 1994. Towards this end it has delivered about 192 202 houses and through this process has provided secure tenure, shelter and basic services to some 768 808 poor people.
Nationally more than 1.614 million houses have been delivered and in the process more than 7 million people were housed through government subsidy programme. This achievement is encouraging, especially in light of the international and national experts commending us of the work well done over the past ten years. Undeniably, the work is far from complete, we still face surmountable challenges.
The housing backlog in the Western Cape is estimated at 310 000 families and 73% of the backlog is located within the Metropole. Unchecked, it is likely the backlog will rise to about 460 000 families by the year 2010. The proliferation of informal settlements throughout the province, especially in the metro is evident for all to see.
Since 2001, a total amount of R956 million was spent to provide about 47 800 houses. This therefore implies that the housing backlog has remained stubborn and continued to increase by more than 10 000 units during the last three years.
Our first challenge is therefore to deal with this growing backlog taking into account the limited budget available for housing. We know the extent of the challenge. Across the span of centuries, we are encouraged to act decisively. The German philosopher, Van Goethe said:
"Knowing is not enough, we must apply. Willing is not enough, we must do."
And much later, John F Kennedy exhorted:
"There are risks and costs to a program of action. But they are far less than that of comfortable inaction".
Our National Minister has also reflected on the size of the housing challenge:
"History has burdened us with responsibilities so immense that at first sight they would seem clearly overwhelming".
EXPENDITURE
This leads me directly to the issue of expenditure. The media has reported extensively on the under spending in the Western Cape. In short, the Western Cape received an allocation of R423 million for the previous fiscal year. Approximately R282 million of these funds were spent, leaving R141 million still in the Provincial coffers.
Although there are many reasons for the poor performance, it has to be noted that the funds that were not spent have indeed been committed to projects. Approximately 47 new projects were registered within the previous financial year. We now have to spend the funds that were rolled over, as well as our allocation for the new financial year. With a current allocation of approximately R446 million we have the daunting task of spending R587 million this year.
The lessons are clear: we have to move beyond being a financing conduit to taking a more proactive role in housing delivery. Strategies like the provision of monitors, strengthening capacity of local municipalities and project managers to assist municipalities are currently being put in place. This may even extend in certain instances to the Province assuming the role of developer.
The lack of infrastructure, institutional and management capacity at municipal level remains the major factor that is hampering housing delivery. In most of the municipalities, especially the smaller ones, there are no dedicated housing offices and officials to tackle responsibility for housing delivery. The need for support to municipalities to develop municipal housing development plans cannot be overemphasized.
I therefore intend to use my position as the Minister of Local Government and Housing to ensure that the necessary capacity will be developed at the municipal level for effective and sustainable housing development. The Integrated Development Planning (IDP) should be the guiding process for housing development. Having an integrated strategy is critical to avoid the continuation of parallel economies in the same municipality.
I have, by means of intervention guided by provincial development, economic and other documents managed to find what is to be a solution to the systems and structural challenges affecting the department. The approaches listed below were presented to Cabinet and stem from intensive and frank engagements with the departmental senior and executive management cohort.
These strategic approaches themselves present own challenges, such as capacity and appropriateness of structural alignment and so forth, nonetheless there is commitment from all to play a role in?
- The development of a clear implementation plan.
- Impresses strategic management.
- Responsive monitoring and evaluation systems.
- Timely and decisive interventions when signals point to under achievement.
- Synergy with local government.
- Build capacity to plan for and deliver houses in municipalities (LG Dept).
- Aggressive monitoring of housing delivery and budget expenditure.
- Development and implementation of a Housing Delivery Fast Tracking Strategy.
- Establishment of Integrated Task Team comprising of provincial departments of Housing, Local Government, Public Works, Land Affairs, Development Planning, WECLOGO, etc.
Already, a concept aimed at getting the right and responsive management tool has been discussed and is further being developed, in essence, a delivery pipeline is sought to deal with the intricate nature of managing the work of this department. In terms of capacity, the national Minister of Housing has made a strong signal that closer interaction between spheres of government will be her way of doing things. She has chosen the Western Cape to pilot the inter-governmental management and planning co-operation, an opportunity we are grateful of.
LAND AVAILABILITY
Another consideration is the scarcity of suitable, affordable and well- located land for low-income housing. There are various databases of land that are in possession by various authorities such as the provincial Department of Public Works, Department of Land Affairs and the City of Cape Town. These databases are presently not talking to each other.
I have instructed my department to facilitate a Land Audit process covering the whole province in cooperation with the Metropole, Public Works, Land Affairs and Planning. The terms of reference are to take stock of all available land in the Western Cape irrespective of location. We must very quickly be in a position to respond to land shortage 'problem' as a stumbling to delivery of houses.
That includes challenging the notion that land must be released at market value, and implicitly, that the more hostile and inhabitable the better it would suites low cost housing.
The predominant paradigm will be prevail, Western Cape is a Home for All regardless of race, financial standing and any other classification in conflict with objectives of this democratic province led by a progressive, peoples' organisation.
On projects, we have about 70 Peoples Housing Process projects that are spread throughout the province, but mainly in Khayelitsha. The greatest challenge with regard to PHP is the lack of technical, managerial and monitoring capacity to ensure that those projects are implemented effectively.
Some of the PHP projects seem to be lacking in community empowerment, and are too contractor or developer dominated. We are committed to ensuring that the housing delivery process remains People - Centred, and that the needs of the consumers are not neglected just because they happen to be poor.
It is essential that we should encourage small and emerging contractors, especially the Previously Disadvantaged Individuals and the growing number of women in the industry. On the first of October, I shall convene a Provincial Conference aimed at dealing with issues affecting women in the construction and large-scale development industry.
I am aware of the skills and capital deficit plaguing PDI, we will ensure that the involvement of established companies not only ensures speedy and effective housing delivery but also assist in addressing broad critical capacity inequities among role players, including locals who trade their apprentices in assisted/ managed PHP's and Project linked developments.
I firmly believe there is a special niche in this equation for the big contractors and developers to play a role in, without us having to compromise on Black Economic Empowerment.
Many larger companies, I am made to believe, have left low cost housing construction for reasons among which include, the delays in the delivery process as well as 'low profit margins'. I am inviting them to comeback and assist in bringing hope to the homeless. I will do what is possible to create an enabling environment.
FRAUD AND CORRUPTION
In this we will ensure that we have effective systems and processes to prevent fraud, corruption and mal-administration. My department has recently conducted an internal audit and risk management analysis and I intend to use the outcome of this analysis to put good accounting procedures and systems in place.
We will therefore ensure that within the next three months we have systems in place to prevent fraud, corruption and mal-administration.
This process will also include a hands-on and a robust monitoring of housing projects by the department's monitoring team. We will also align our efforts with those of the envisaged Special Investigative Unit when it comes on stream.
CAPACITY BUILDING
We have recently finalized the development of a Training and Development Business Plan for the training of provincial and municipal housing practitioners. We will, over the next two months be appointing service providers to provide various courses. There is a budget of about R1.7m in this regard.
In the next three months we will also ensure that our new organizational structure is finalized and that Cabinet approves it. We will prioritise critical positions and ensure that we appoint personnel before the end of November 2004. We will over the next six months also intensify our visits to municipalities.
The visits will include high-level discussions with municipal managers and housing managers, as well as with the political representatives. The Department will over the next year also ensure there is strategic focus by the municipalities with regard to housing delivery.
Where there is no strategic focus we will intervene. In this regard I will ensure that my Department acquaints itself with the IDP process and assesses the municipal housing sector plans to determine whether there is strategic focus or not. We will ensure proper coordination between the Department of Local Government and Housing in this regard.
Informal settlements:
Addressing the problem of informal settlements has become a national priority, with all 3 spheres of government tasked with working together to solve the problem. We have been challenged by the national ministry to eradicate informal settlements within 6 years.
This is a complex task as in-situ upgrades are not always possible, and alternate sites are often seen as less desirable. Invariably, there are also people in these communities who do not qualify for subsidised housing, for a number of reasons. But the overriding consideration is that hardly any person stays in an informal dwelling because of personal preference.
Mr Speaker, no one endures the severity of Cape winters in a shack out of choice.
Earlier in the Local Government Budget Vote, we heard that R6,7 million has been earmarked for disaster relief in informal settlements. Our medium term goals must be to work together for a housing solution that precludes the need for such budgeting.
A concerted effort has already been effected amongst the three spheres of government to address the plight of families living in informal settlements. The National Department of Housing has indicated the possibility of a dedicated funding mechanism for this project and also declaring it a National Housing Programme. We will meet the City within 10 days to jointly develop a comprehensive business plan for the upgrading of informal settlements within the metro, especially along the N2.
Reviewing systems and municipal support:
You are probably all aware of the fact that the subsidy is increased every year in April, to make provision for the escalation in building costs. Unfortunately this policy has affected larger projects negatively, as the entire project would be approved on a specific subsidy amount and would normally have been tied in on that level for the duration of the project.
This meant that larger projects had to be split into smaller projects, resulting in the economies of scale being lost on the service portion of the contract. To address this problem, we have recently finalized guidelines that will allow for projects to be split into separate services and top-structure contracts.
A developer can therefore apply for the infrastructure to be approved in one financial year and the top-structures in the next year, at the increased subsidy level. The beneficiary will therefore receive the benefit of the increased subsidy and larger projects will not suffer financially because of their scale.
This system is already put in operation and over the next two months extensive workshops with the developers and municipalities will be held to inform them of this development approach.
We have identified several large projects such as SANCO Nomzamo/Lwandle and the Macassar Project in the Helderberg area, as well as the Kuyasa Project in Khayelitsha, are such projects. They range in size from just over 1300 to 5645 units. We will ensure that we are pro-active in identifying any problems that could negatively impact on the progress of these projects, so that we would be able to spend a substantial portion of our funds in these areas.
In this regard, the departmental project monitors (engineers) will pay more attention to these projects. They will intensify their visits to municipalities. The Wallacedene project in Oostenberg is another project that we will invest energy in over the next eight months. On completion this project will provide approximately 8500 housing opportunities. This project will not only serve to assist us in our expenditure, but is also important as it will ensure the provision of shelter to the families that were involved in the Irene Grootboom court case.
Two projects that also deserve mention, not only because of their size, but also of the emotional issues surrounding them are the Khayelitsha Site C de-densification project and the Imizamo Yethu project in Houtbay.
The Site C De-densification project in Khayelitsha will address the overcrowding in this area and should help solve a problem that has haunted Cape Town for many years.
The Imizamo Yethu project in Houtbay has received Conditional Approval for approximately 2200 units and the first phase of 209 units has received approval for the infrastructure portion of the contract. Construction is expected over the next three months.
We all know the devastating effect of the fire that, not so long ago, left thousands of people without even the meagre shelter that they previously had. The first phase is specifically aimed at resettling some of the families who lost their homes in the fire. Outside the Metropolitan Area we are keeping a close watch on the Knysna and Theewaterskloof Municipalities, as their performance could also significantly improve fast tracking of housing delivery.
Knysna has two large projects of 1390 and 2000 units respectively and once again we have to ensure that we remove any impediments that could negatively influence their progress.
Theewaterskloof Municipality has several smaller projects that could have a combined impact on expenditure. I am also glad to say that the Slangpark project in Grabouw, that serves to resettle close to 900 families who were displaced after a fire swept through their squatter camp several years ago, is nearing completion.
Hopefully this community can put the past behind them now and look to the future , a future in a house of their own!
I am the first to admit that we cannot only look outside our establishment to find solutions. Even if all the projects on our books perform to capacity, our fate will still be sealed if we do not have the internal systems in place to administer these projects on our side. We also need the ability to intervene constructively to address blockages before they become problems.
We are also looking at internal systems that need to be improved and streamlined to expedite housing delivery. This relates to Board approvals, processing of project application by the officials and the streamlining of the NHBRC process. We are confident that we can cut 4 to 6 weeks off the process with minor adjustments.
WORK AND PLANS: 100 DAYS PROGRAMME
- ensure the completion of blocked projects, 29 affected.
- Input and play a leading role on the N2 Project, developing a Business Plan before the end of July.
- Put in place a management and monitoring process.
- Re-organisation of the department to be in a position to adequately support PHP's, strengthen communication unit and foster an outreach mentality (sending staff to the ground/ projects).
- Deploy departmental staff to play a hands on role to the Khayelitsha, Zwelethemba and Rietpoort PHP Projects during the month of September. I will lead this volunteerism corps approach in the spirit of Letsema and invite politicians and the public to assist.
- Identification of key projects to be fast tracked, e.g. Nomzamo, Macassar, Imizamo Yethu, Wallacedene, De Doorns, Rietpoort and DMA, Boys Town, etc.
- Meet with housing developers in the province to assess status quo and co-planning by the end of June.
- Put in place a reward for excellence in delivery for houses, this award will be for the following categories,
- Best performing municipality in housing delivery.
- Best developer, including PHP projects.
- Host a conference for Women in Construction in the first week of October aimed at finding better ways of responding to the challenges of their economic emancipation, integration and co-planning as stakeholders in the industry. The South African Women in Construction will be an active player.
- Massive rollout of Communication and Awareness Strategy to communities and stakeholders.
Between the 1st and 5th of November I shall be hosting a Provincial Conference on Human Settlement informed by the resolutions of the UNDP agreed upon at in Istanbul. This Conference will seek to augment the existing foundation for housing delivery underpinning the 2010 Human Settlement Strategy for the Western Cape.
The 'Best Practice' ideas to come out of this process would be used as lessons in dealing with, among other things, homelessness, informal settlements, unemployment, social insecurities, vulnerabilities, disasters, etc. all key components of sustainable development, a noble ideal we are all pursuing in earnest.
In closure Mr Speaker, my address to this Honourable House over the past few minutes has sought to do more than what is standard in policy speeches, it sketched a scope of triumphs and challenges over the past decade, it shone a ray of hope to the people of the province, the poor in general, but more in particular the homeless, it called for joint effort and commitment into a contract binding people and government to deliver on a stated mandate. It sought to revoke the warrior, the activist, the development worker and the new person in us. I hope I have succeeded in doing that.
I would like to thank the officials of my department for the support given and to signal to them that the next few years will require people who would walk this talk and commitment I am making to this honourable House and the peoples of the Province and the country. That, to all of them, working for government in general and in this department in particular, it will not be business as usual and given the inherent good quality of most officials I have seen so far, I have no doubt that we will succeed.
Jose Martin' (a 18th century philosopher) wisdom says;
"One must have faith in the best in men [person] and mistrust the worst in him. One has to give an opportunity for the best to encourage and prevail over the worst. If not, the worst shall prevail"
Honourable Members, the Premier and the people of the Western Cape, a time to work is upon us and ticking fast. Through no fault of ours, we have to start addressing backlogs before we deal with current needs.
We have won many a battles before, this one we will win too.
I call upon you as leaders, peoples performing oversight, beneficiaries, financiers, the Fourth Estate and other role-players to combine efforts, join and support me in pursuit of what would significantly contribute in making the Western Cape "A Home for All"
