Lindiwe Sisulu
(2004-09; 2014-18
and 2019-21). (Delwyn Verasamy/M&G)
With Human Settlements Minister Lindiwe Sisulu “content” with building “wooden shacks” in the Eastern Cape, the province has seemingly given up on retrieving R341.5-million that was meant for much-needed adequate housing.
The “shacks”, which the government has labelled as “state of the art”, add to the eyesore of East London’s Duncan Village, an impoverished area containing informal housing. The debilitated sewerage system reportedly leaves residents to contend with a stomach-churning stench.
The missing millions
Before the national department had to find funding to move Duncan Village shack dwellers into new shacks, termed “temporary transitional residential units”, as part of the government’s efforts to stem the spread of Covid-19, it was aware of more than R300-million that could not be accounted for in the Eastern Cape’s housing budget.
A high-ranking provincial source, who asked to remain anonymous, asserted that the Eastern Cape had “given up” on retrieving the millions of rands that were needed to alleviate housing problems for citizens.
“What is worse is that the national department, which is the custodian of the [Social Housing Regulatory Authority], built what amounted to tin shacks for the people of Duncan Village last year, when there is money that has disappeared without anyone doing anything about it,” the source said.
“Minister Sisulu prided herself on delivering those shacks to supposedly alleviate congestion, but her department has done virtually nothing to try to stem the looting of housing money.”
Another housing official, who also spoke on condition of anonymity, said the cost of building an average government-subsidised house was about R110 000, adding that more than 3 100 units could have been built with the missing R341.5-million.
This comes as the Special Investigating Unit (SIU) reported gross procurement irregularities in Sisulu’s flagship temporary transitional residential units.
More missing houses
Although R341.5-million had already been reported as missing, Sisulu’s department, which was meant to build homes in Duncan Village last year, only provided a fraction of the units that were meant to be built, and service-provider contracts were extended in an “unjustified” manner, the SIU found.
Community activists, who spoke to the Mail & Guardian on condition of anonymity, echoed the SIU’s findings, saying people as young as 18 were given the structures, usurping people who had lived in Duncan Village since the 1970s, when residents were forced to pay a “lodger’s permit” during the apartheid administration.
The SIU’s findings were delivered to parliament’s standing committee on public accounts (Scopa) on 2 June this year.
Tracking the missing money
Meanwhile, in an internal note, which the M&G has seen and was dated March 2019, the Eastern Cape human settlements department asked the provincial treasury to assist it in condoning R231.5-million as irregular expenditure, after a national treasury report that uncovered “financial misconduct” in the disbursement of R341.5-million to the Social Housing Regulatory Authority.
This was the money, which went missing back in 2013, that was meant to alleviate the dire living conditions of the Eastern Cape.
The housing authority is an agency of the national human settlements department.
The M&G recently reported that the November 2013 national treasury investigative report had found, of the R341.5-million, R115-million seemingly disappeared into thin air and could not be accounted for. Another R165-million was “irregularly” transferred to KwaZulu-Natal and the North West, “for projects not related to the Eastern Cape”.
Despite the treasury report directing the provincial department to take disciplinary action against its former head of department, Gaster Sharpley, the March 2019 document conceded that this directive was not followed. Sharpley declined to comment when the M&G contacted him.
He is also currently suspended for alleged corruption in KwaZulu-Natal’s department of public works.
“No disciplinary action was implemented against any official of the Eastern Cape department of human settlements. The [human settlements department] has also not been privy to the investigation that was undertaken by the national treasury to inform any decision or action with regards to the officials who might have been implicated.
“The financial exposure for the Eastern Cape department of human settlements is R231 521 854, which is disclosed in the [annual] financial statement for the financial year ended 31 March 2018,” reads the March 2019 document.
State of the art ‘shacks’
Steve Motale, spokesperson for the human settlements ministry, said the department was aware of the R341.5-million that had gone missing in the Eastern Cape, adding that the provincial housing department had declared this in its annual report.
“We wish to underline that the funds received from the national treasury are meant to alleviate the plight of our indigent and to restore their dignity through decent accommodation. Any deviation from this can and will never be accepted,” Motale said.
“The funds in question were meant to deliver social housing (or rental accommodation) for people earning between R1 500 and R15 000 and were not meant to deliver fully subsidised BNG [breaking new ground] housing.
“We also noted that you refer to the Duncan Village [temporary shelters] as tin shacks. We would suggest that you visit this project in Duncan Village: it is the total opposite of what you are talking about. We have decided to share some pictures for your ease of reference,” he added.
In a subsequent phone conversation with the M&G, Motale enthused about how the Duncan Village units were “state of the art”, saying that the department was proud of the project.
However, when the M&G alerted him to the damning SIU findings related to the project, Motale said: “The [Housing Development Agency] was [the] implementing agent. Please refer your query to them.”
A known Duncan Village activist, who asked to remain anonymous out of safety fears, said the temporary shelters “were a waste of money” and an alleged looting project.
“The other problem is that people don’t like these structures, because they say: ‘How can I leave a shack to go live in another shack?’,” the activist said.
On 2 June, the SIU told Scopa that it had received allegations of procurement irregularities during the construction of the temporary shelters at the beginning of the Covid-19 pandemic.
“The value of the contracts was about R300-million. The SIU investigation found that the emergency procurement process was used to motivate for these structures. However, only 279 of the 1 800 temporary shelters were eventually built,” reads the SIU report.
This equates to a cost of about R166 000 for each temporary shelter. But with fewer than 300 shelters delivered, according to the report, about R253-million worth of shelters are still outstanding.
“The contracts of the four service providers appointed were also extended by five months through an approved deviation; however, the deviation was not justified,” the report reads. “The SIU will recommend that civil proceedings be instituted to set aside the contracts awarded, and to recover all monies charged and paid to the service providers.”
Another community leader agreed with the SIU, saying that the 30% of spending on the project that was meant to be set aside for local businesses, as regulated by the treasury, was given to people with no footprint in Duncan Village, as well as the politically connected.
Tabisa Poswa, the head of department for the Eastern Cape’s human settlements portfolio, said: “The department is aware that there was an investigation by the national treasury on the R341-million transfer to [the social housing authority]. The department is not able to link nor accept the claims of alleged looting of funds to people.”
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