A Welkom community comprising the poorest of the poor lost a total of R640 000 after housing consultants backed by politicians encouraged them to participate in a housing scheme.
Among those accused of promoting the scheme is former Free State Premier and now national MP Winkie Direko.
In 1997, about 3 200 people paid the Goldfields Metropolitan Community Development Corporation (GMCDC) R200 to secure homes in a new project.
Now, after eight years, only 300 houses have been built and the original applicants cannot afford the houses, which cost R45 000. As a result, 700 of them have moved on to the land they were promised with their families, in the hope that the government will house them and provide basic services.
The people call their settlement Phokeng village and only those who registered with the original scheme are allowed to settle there.
But last month, the Phokeng villagers were issued with an eviction order by the municipality, which said they were occupying land earmarked for development — the same development they bought into eight years ago.
“These people are the poorest of the poor — pensioners and jobless people,” said Dan Mofokeng, a community leader and activist. “How can they afford these houses?
“Eight years ago, these people were promised the world, they were promised American-style RDP [Reconstruction and Development Programme] houses. Now they are the scum of the earth, but back then, their precious money was good enough.”
Ina Nicholson, chairperson of GMCDC, replied that it was never her corporation’s intention to build RDP houses. “We were always going to build lower‒income houses, where the beneficiary of the house would have to make a contribution. Mofokeng is misleading the people.
“At all the meetings we clearly told the people in Sotho they would have to pay for the houses,” she said.
Nicholson, an American citizen, said she had come to South Africa in 1996 after hearing a sermon by a South African preacher. In South Africa, she established GMCDC to help “with the deep need for housing here”.
But Mofokeng questioned Nicholson’s credentials. “She arrived in South Africa virtually penniless, but suddenly she, an American citizen, had this housing project going which had the backing of prominent South African politicians, including the then mayor, some MECs and the then premier, Winkie Direko.”
Nicholson responded that she had lost money in the scheme and claimed to be somewhat disillusioned. “But I am willing to put up with the lies that are being spread in this community. I still want to help.”
One of the villagers, pensioner Mamoila Tsatsi (69), told the Mail & Guardian “local councillors and politicians said to come and pay R200 because the American woman will come to build us houses on land the government had given her”.
Tsatsi said she had registered with GMCDC because she trusted Direko, who had encouraged people to sign up. But Direko said that in 1997 she had never heard of the scheme, as she was a national MP.
“I became involved in 1999 as premier when my housing MEC invited me to go to view Nicholson’s project.”
Direko said Nicholson had trained 100 women as contractors and she (Direko) was impressed with the skills they had acquired. She became involved to encourage more women to acquire these skills.
The villagers said Nicholson had held regular meetings with applicants. At each meeting they were told their houses would be built within three months.
By Christmas 1999, nothing had happened. “The people were growing impatient,” said jobless villager Augustinus Rametse. When no more meetings were held, Rametse and the community approached Mofokeng to take up the issue on their behalf.
Mofokeng said he discovered that the project had been converted into a credit-linked scheme for which the original applicants could not qualify, because they could afford neither rent nor bond repayments.
He wrote several letters to the different levels of government and requested a meeting with GMCDC. He said he had been ridiculed and the beneficiaries mocked, “because they did not understand the scheme”.
In 2000 GMCDC, now known as Reatlehile Housing Association, secured an institutional subsidy from the Free State government of R18 500 per house, and in 2003, 300 houses were built.
Some of the original applicants moved in alongside new applicants, even though they were unable to afford the houses. Many refused to pay and Reatlehile initiated legal action against them.
Nicholson says her company would have built the promised 3 000 houses. “We would have built in phases, 500 at a time,” she says. “But we never got to the second phase, because people would not pay.”
Papiki Ngesi, executive manager of Housing Development in the Matjhabeng local municipality, denied that the government was involved in any way when the housing scheme was initiated, besides being involved in the negotiations for land.
Ngesi said the project had started amid misunderstandings about subsidies. The provincial government had issued some subsidies later on as a move to defuse tensions between Reatlehile and beneficiaries.
“The other beneficiaries were encouraged to put their names on the council’s housing waiting list,” he said.