EASTERN CAPE HOUSING DELIVERY REVIEW FOR THE FIRST 9 MONTHS OF THE 2006/07 FINANCIAL YEAR

PRESENTATION OVERVIEW FINANCIAL & NON-FINANCIAL DELIVERY OUTPUTS IDENTIFIED PERFORMANCE CONSTRANTS Strategic, with the related Operational impacts REMEDIAL INTERVENTIONS: THE PARADIGM SHIFT … UPDATE ON INTERVENTIONS UNDERTAKEN CONCLUSION

EXPENDITURE vs CASH FLOW FORECAST IN DISTRICT ORDER

NON-FINANCIALS…

OUTPUTS FOR THE 1ST 9 MONTHS Number of emergent contr. 686 Jobs created 3 539 Houses completed 11 791 Subsidies approved 6 799 Title Deeds transferred 4 913 Municipalities accredited (in process) 2 Disaster housing assistance 100

NEGATIVE FACTORS INFLUENCING HOUSING DELIVERY. STRATEGIC CONSIDERATIONS… The challenges facing E/Cape housing delivery must be seen against the following strategic approaches, initially undertaken for developmental reasons: Use of PHP delivery vehicle – (60% of E.C. projects are PHP) (slow delivery due to layered coordination & communication processes) Majority of Developers are Municipalities Use of Emerging Contractors 40 sq.m. size unit on 30sq.m National Norm Allocation – (Unfunded extra 10m²) The negative impact of these factors has been building up over the years to what is now possibly the highest point

HOUSING RECOVERY INTERVENTIONS Departmental take-over of some of the unblocked projects which are slow-moving through engagement of Established Contractors inclusive of Thubelisha Addresses twin-problem of Municipal and Emerging Contractor capacity shortfalls The involvement Established Contractors allows for a number of advantages: Speedier Procurement Processes Bulk material purchases Sourcing of additional resources to reinforce existing construction teams

HOUSING RECOVERY INTERVENTIONS (ROLE OF ESTABLISHED CONTRACTORS) The Established Contractors are performing the normal contractor role, inclusive of: Execution of Construction Works to Scope, Budget, Spec, Schedule (Penalty clauses to be enforced) Materials and labour procurement Site Management ; Handover of Works Key Ingredient Embracing emerging contractors in order to mentor them to graduate to higher skills & expertise levels within requirements of allocating projects to them in accordance with requisite capacity

PROGRESS TODATE A fast-tracked procurement process affecting a total of 18 projects ( combined value R433m) will ensure on-site activity early in March Projects in new financial year are being packaged for execution through Established Contractors. A quantum leap in provincial delivery is envisaged

CONCLUSION 1. The Department is confident that the dominant elements of the delivery under-performance problem have now been exposed, and are being dealt with in a meaningful way. 2. Even though the paradigm shift and strategic intervention currently embarked on will only begin to take effect at the tail-end of current financial year, a solid basis has been laid for higher-level delivery performance in the remainder of the MTEF cycle

Thank You Comments & Questions