Ahead of the presentation of the Human Settlements Budget Vote 2012-13 to the National Assembly last week (9 May 2012), Minister of Human Settlements, Tokyo Sexwale, highlighted the progress the department has made not only in the continuing development of housing and human settlements but also in rooting out the corruption that has, over past years, undermined the delivery of decent housing.
Interestingly, Minister Sexwale raised the question of whether government should not be turning to sizeable, established contractors and their BEE partners rather than the “wheelbarrow and bakkie brigade” to support its housing delivery commitments. He said that while some emerging contractors are genuinely committed to building houses of sound and long-lasting quality, many had shown themselves to be fly-by-nights, abusing taxpayers’ money and government’s resources.
Sexwale also mooted – for debate – the idea of idea of a state-owned construction company.
In the context of ever-increasing demand for well-located land and housing; a national GDP growth rate of around 3% – well below the targeted 7%; persistently high levels of unemployment, especially among young people; Sexwale highlighted that the department also faced the challenges of dealing with escalating construction costs – increasing above the inflation rate – and of rectifying previously poorly built houses.
While inflation is around 6.3%, according to the Reserve Bank, and impacts directly on costs of construction materials, Sexwale cited the Bureau for Economic Research (BER) report for the 4th quarter of 2011 which recorded a building cost index increase of 14.1%, compared to the 6.4% recorded for the 2nd quarter of 2011. He singled out some essential building materials on which prices have increased at levels way above inflation: reinforcing steel at 38.9%, for example, ceiling materials at 10.8%, and bricks by 8.6%. In addition to increasing costs of materials, the building industry is also hit by increases in costs of transport and labour, he said.
The Human Settlements budget for the 2012-13 year has increased to R25.2 billion, from R22 billion for the previous year 2011-12.
2011 in review
Sexwale said that in 2011, the department had committed to accelerate delivery, improve coordination, and establish greater clarity on the problems confronting the country’s drive to deliver housing at the target level of 200 000 “housing opportunities” per year. He said that since that target had been set, in 2009, government had come to recognise that human settlements are about more than just the number of units built and that there are other critical drivers, such as land acquisition and infrastructure development, which are key to the process.
He reported that through the 2011-12 year, the department had spent 98% of its budget and had delivered about 180 000 housing opportunities. Acknowledging that this is below the targeted level, he attributed the shortfall to the impacts of increasing costs and other negative factors already noted, and said that spending had also been committed to required infrastructure, geo-technical evaluations, feasibility studies and forward planning.
In addition, he said, more than R400million was spent on rectifying poorly built houses, predating 2002, and this could otherwise have been used to construct more than 7 000 new housing units. “Nevertheless,” he said, “it is noteworthy that the houses that are being built today are aesthetically superior and of a high quality standard and design.”
Dealing with corruption and maladministration
Sexwale detailed steps the department has taken to root out corruption in the low-cost housing sector. He confirmed the arrest and dismissal of several influential public servants – whom he named in his address. He reported the investigation of 57 housing projects valued at over R4.2 billion. Of these, 40 investigations have so far been completed and a further 17 are ongoing. The investigations are being carried out with the participation of the provinces and, among them, Limpopo has taken the lead in probing housing contracts.
Sexwale reported that 24 contractors have been blacklisted for shoddy workmanship, non-delivery and incompetence.
These cases and others have been referred to the Special Investigating Unit (SIU).
The minister also reported that more than 290 public servants had been arrested for suspected housing subsidy fraud; 250 had been found guilty and a further 220 were facing internal disciplinary action.
Nearly R30 million lost through corrupt activities has been recovered, he said.
Sexwale said: “I say this with a heavy heart. My job as a minister is not to be a policeman chasing people around,” but he said he was answering the questions consistently raised by members of parliament as to what investigations are being conducted and what action has been taken.
Housing developments in progress
Turning to key housing projects being implemented around the country, Sexwale highlighted the development of Lakehaven in eThekwini, KwaZulu-Natal; a Brandfort Women’s Build project in the Free State; Mazista, in Swaartruggens in the North West; Seshego in Polokwane, Limpopo; Klarinet, in Emalahleni in Mpumalanga; China Square Project in Kimberley; the redevelopment of Jabulani hostels in Soweto; the densification of Joe Slovo in Cape Town and the Southernwood social housing project in Buffalo City in the Eastern Cape. Sexwale said that as well as providing houses these projects have created some
76 000 job opportunities – including 50 000 direct jobs.
He noted the use of recycled materials – in a pilot project – in houses built in Blue Downs in Cape Town where bricks made with rubble from the demolished Athlone cooling towers, which were imploded in 2010, had been used.
Regarding the department’s Each One, Settle One campaign Sexwale congratulated Anglo Platinum for its commitment to build 20 000 homes over the next nine years, at the cost of R1.4 billion, for its employees in the North West and Limpopo. He also said that mining giants Gold Fields and BHP Billiton would be announcing similar projects in due course. However, he said that while there had been a considerable response from the private sector, many JSE-listed companies had not yet joined the campaign.
He said the department’s turnaround strategy had now been completed and it would move forward with its delivery mandate.
Human settlements and infrastructure development
Looking ahead Sexwale said the New Economic Growth Path has identified energy, transport, roads, water, communication and indeed housing as key areas in its strategy to fast-track sustainable growth, employment and equity creation.
“This has been given a further boost by President Zuma’s establishment of the Presidential Infrastructure Coordinating Committee (PICC), which is a major breakthrough towards reversing the entrenched system of apartheid infrastructure and its spatial planning,” he said. “The decision to position Human Settlements as one of the key drivers of the PICC has made our work of coordinated integration with other departments, particularly those handling the bulk services, much easier.”
He also highlighted that the country’s sanitation programme – which is aligned with the internationalised sanitation programme in terms of the United Nations’ Millennium Development Goals agreed to by all UN member states – has been elevated to a national priority within the PICC. The Sanitation Task Team that he had appointed, headed by Winnie Madikizela-Mandela, would soon be presenting its preliminary findings to the public, he said.