Four provinces may lose housing grants because of under-performance that saw them fail to meet monthly delivery targets for low-cost housing, the Department of Human Settlements warned on Tuesday.
The department distributes around R14-billion a year to provinces for low-cost housing, but according to the director general of human settlements, Thabane Zulu, certain provinces were behind on delivery.
“Four provinces — Western Cape, Eastern Cape, KwaZulu-Natal and Free State — are lagging behind with delivery or are under-spending and may have to forfeit a portion of their grant,” Zulu said in a statement.
“The funds might have to be redirected to provinces where there is better performance.”
The threat drew protest from the Western Cape, where the housing department said delivery had sped up dramatically in December.
Human Settlements Minister Tokyo Sexwale told Parliament’s portfolio committee on human settlements last November that a number of provinces were under-performing on housing delivery.
At the time, he said that the main reasons for this included a lack of capacity in provinces — in particular, project management experience — and a lack of bulk infrastructure such as large-scale electricity and water supply projects.
‘Recovery plans’
All nine provinces were asked to provide the national department with “recovery plans” to demonstrate how they were going to meet their monthly and annual targets.
“In line with good governance and legislation, after having studied the delivery plans and consulted with the provinces, the minister is considering the practicality of transferring funds from provinces which are lagging behind, to provinces where there are approved business plans in place,” Zulu said.
“There have been detailed discussions with all the provinces and it is clear that serious challenges remain in the Western Cape, Eastern Cape, KwaZulu-Natal and Free State. As a result, they may have to forfeit a portion of their annual human settlements grant.”
A final decision on which provinces will forfeit funds and how much will be transferred to other provinces, would be made soon.
“We are still in consultation … A final decision will be made in the very near future,” Zulu said.
The Western Cape Department of Human Settlements said it was “unfortunate” that the national department had not waited for the December performance and expenditure figures, due on Friday, before issuing its statement.
“The picture has improved dramatically in the Western Cape since National Minister Tokyo Sexwale raised his concerns last November,” it said in a statement.
‘We’ll meet our target’
The department disbursed R261-million or 131% of its target of R200-million in November, and R232-million or 101% of its R230-million target for December.
“This means that, despite only spending 64% of its target in October, the department disbursed 99% of its R620-million target for the third quarter.
“We have spent R1,25-billion, or 64% of our budget for the year.”
According to preliminary figures, the department serviced 8007 sites and built 8 218 houses.
“We have approved a number of new projects in the third quarter, which will assist us to accelerate this delivery in the last three months of 2010/11.
“We are confident that we can spend the balance of R705-million in the final quarter of the financial year, and that it won’t be necessary to redirect any of the Western Cape’s grant allocation.”
‘More than confident’
The Eastern Cape Human Settlements Department was adamant that it would meet its targets and would not forfeit its housing grant.
“The department has already spent R1 175 008 493 from its allocation of R1,5-billion grant and is left with a small fraction of R411,368-million which is being committed through appointments of contractors on our new projects,” said spokesperson Lwandile Sicwetsha in a statement.
“The remaining amount is already being disbursed through appointment of contractors on new projects and another amount from the available budget would be spent on appointing alternative technology builders which have been identified to build thousands of homes for destitute people in the province.”
Sicwetsha said nine new major contractors were appointed this week to build over 3 000 homes in the province as part of a plan to accelerate delivery.
“To date, 7 445 houses had been completed and handed over to beneficiaries. A huge improvement from the 3 995 recorded mid-year.
“All our plans indicate that we will finish our budget and meet our target of 22 000 homes.”
The department was “more than confident” that it would spend its allocated grant and meet the targets in the remaining months of the financial year, Sicwetsha said. — Sapa