EASTERN CAPE DEPARTMENT OF HOUSING HOUSING CONDITIONAL GRANT EXPENDITURE 2007/08 FINANCIAL YEAR AND 2008/9 HOUSING DELIVERY PLAN Presentation to Select Committee on Finance 20 May 2008 By: MEC Toko Xasa

Introduction The delivery in the Eastern Cape recognises : Freedom Charter that the Peoples Assembly concluded in 1955, Kliptown. The Constitution of the RSA, 1996 assets housing as a basic human right which the state must ensure that it is achieved, within available resources.

Drawing from the White Paper on Housing, 1994 the Breaking New Ground (BNG strategy framework) approved in 2004, offers a fundamental shift in thinking approach in relation to housing delivery. This multi-dimensional approach aptly responds to socio-economic, demographic needs in housing delivery thereby redirecting and enhancing existing mechanisms to move towards more responsive and effective delivery. At one level, the new strategy is informed by the desire to provide the citizens with more choice in relation to what they receive from the state.

Introduction (continued)  The 2008 Programme of Action of the ruling party 24 Apex Priorities The Provincial High Impact priorities The Eastern Cape Provincial Growth and Development Plan 2004 to 2014 recognises housing delivery as one of the key strategies for poverty eradication.

Turn Around Plan What immediate priorities we pursued to drive delivery & expenditure? Emergency Housing / Temporary structures Rectification Programme BNG Pilots

Unblocking projects New projects : Turn Around Plan Batch 1 and Batch 2

ACTUAL OUTCOME HOUSING CONDITIONAL GRANT 2007 / 08 The Turnaround Plan yielded the financial spend as reflected HOUSING ALLOCATION 2007/08 R 509,476 LESS: EXP. AS AT END MARCH 2008 R 391,955 UNSPENT FUNDS R 117,521 76,68%

HOUSING EXPENDITURE 2007 / 08 PER HOUSING INSTRUMENT

OUTPUTS : NON FINANCIAL 2007/08 Jobs created 2038 Female contractors 12 Emerging contractors 360 Individual housing subsidies 613 R7500 capital discount subsidies 618 Houses completed with finishes 7209 Confidential.

OUTPUTS : NON FINANCIAL 2007/08 (Contd) Units under construction as at 31 March 2008 12784 Foundations to wall plate 8891 Roof 3893 Serviced sites completed 751 Rectification sites awarded 5145 Subsidies approved 4648 Title Deeds transferred 5 298 Accredited Municipalities None Independent verification underway Confidential.

MONITORING CAPACITY: DEPLOYMENT ARRANGEMENTS for 2007/08 DMA Inspectors Project Manager and/or Asst Pr. Manager Clerk of Works Total No. of Projects Projects with outstanding construction activity Nelson Mandela 8 4 3 106 60 Cacadu 2 118 50 Amathole 9 72 46 Buffalo City 68 35 Chris Hani 1 52 38 Ukhahlamba - 30 14 OR Tambo 40 33 6 Alfred Nzo Totals 22 21 18 492 282

MONITORING CAPACITY 2007/08 61 staff members were deployed to monitor the implementation of projects in 2007/08 Monthly reconciliations on trust accounts are submitted by municipalities and verification done on a sample

The Quality Monitoring Challenge There are more active projects compared to the number of projects managers and inspectors The province is vast and travelling distances affect reach by the monitoring teams

Key factors which affected expenditure Practical realities on the ground – service delivery environment Poor planning ( department and municipalities) Approval of projects that are not ready Land issues – land under claims and lack of suitable prime land Lack of capacity of the emerging contractors

Key factors which affected expenditure Practical realities on the ground Slow take off of the established contractor construction NHBRC slow start on the rectification programme EIA long turn around time

Key factors which affected expenditure Practical realities on the ground Lean pool of established contractors attracted to low cost housing resulting in retendering Inability of bidders to produce NHBRC certificates Material Supplies – shortage and price escaltion

Key factors which affected expenditure Practical realities on the ground Conditional budget increases disproportionate increase to the operational budget. Legislative framework red tape Slow NHBRC project and home enrollment

COUNTER-MEASURES Recruitment of project managers and inspectors Additional resources through the EXCO for a full functional department Appointment of foot soldier dedicated monitoring teams ICT tool for monitoring and reporting being developed : first test in July

COUNTER-MEASURES Clustering projects and allocate to big contactors to carry out installation of services and top structures Pilot bulk material supplies Special intervention and clustering of rural projects Training of projects managers and inspectors Database of established contractors has improved

2007/08 Budget - 4th Quarter Expenditure Economic Classification 4th Quarter Projections 4th Quarter Actual Expenditure Under/Over Expenditure Compensation of Employees 13,192,006 9,566,928 3,625,078 Goods & Services 9,494,293 7,710,298 1,783,995 Payment on Capital Assets 508,000 Transfers & Subsidies 348,089,000 236,176,332 111,912,668 TOTAL 371,283,299 253,453,558 117,829,741

Key Consideration 2008/09 Budget Review the Baseline Allocation with regards to the operational budget : it has not grown in proportion to the conditional grant The establishment of the department deepens the magnitude of the need for a reviewed baseline in order to assemble the requisite capacity Market price escalation in the built environment outstrips the provision of the quantum

Institutional Capacity 2008/09 Organisational structure approved and being populated The beefing up of capacity through use of dedicated foot soldiers. Regional resource support teams The institutional systems building support through the multidisciplinary team and specialised focus by a legal firm on contracts management

2008/09 Budget Bigger contractors and Turnkey approach to delivery Special intervention on: Unblocking projects Closing projects Rectification _ Alternative to NHBRC Rural housing cluster Bulk material supplies sourcing Preplanning verification exercise for 16 670 sites and implementation in June 2008

Objectives To reduce housing backlog , homelessness and eliminate informal settlements by 2014 To purposefully mobilise and where applicable capacitate critical stakeholders in the housing value chain To facilitate delivery and where necessary implement national and provincial housing programmes To contribute to the stabilisation of the housing market To establish and sustain a learning, service oriented pro poor department.

HOUSING DELIVERY TARGETS 2008/09 Sub-Programme / s Performance Measures Year 1 2008/2009 (target) Rectification of RDP Stock 1994-2002 Number of projects ( to be )approved 50 Number of housing units to be rectified 8 333 Unblocking of blocked projects Number of projects approved to be unblocked 115 Project Linked Subsidies Number of housing units to be completed 2 522 Integrated Residential Development Programme Number of sites to be serviced 6 174 8 893 Peoples Housing Process 4 411 Informal Settlement Upgrading 4 670 Number of sites to be completed with permanent services 1 123 Consolidation Subsidies 184 Emergency Housing Assistance Number of housing units to be completed for emergency temporary assistance to households whose existing shelter places them under threat 1 554

Snapshot of the business plan 2008/09 NEW PROJECTS Phased approach (Services & top Structure): R448,298.00 ISUP (BNG): R284,187.00 Emergency Housing Ass: R 37,170.00 Social & Rental Housing : R 13,373.00 Other instruments: : R213,003.00 TOTAL: R996,031.00

Snapshot of the business plan 2008/09 OLD PROJECTS: Project Linked: R 63,050.00 PHP projects: R126,247.00 Consolidation Subsidies: R 7,603.00 Rural Housing: R 58,087.00 TOTAL: R254,987.00

2008/09 Business Plan Batch 1: 10240 units are under construction as new projects Batch 2 : 4057 units awarded target date for construction O1 June 2008 Cluster of new projects 16 670 sites in two phases of 8342 and 8328 prepared for implementation : target date to complete exercise June 2008 for phase 1.

2008/09 Business Plan Targets 28421 transfers 2 prime land parcels acquired 420 social housing units 25 000 subsidies approved

2008/09 Business Plan Targets 3 PHP projects with 1000 units in rural areas Pilot of the bulk material supplies model 4 EPWP pilot projects 5900 Jobs created

Thank You!