EASTERN CAPE HOUSING DELIVERY FIRST QUARTER REVIEW FINANCIAL YEAR 2006/07

EXPENDITURE vs CASH FLOW FORECAST: FIRST QUARTER

CAPACITY & ENVIRONMENTAL CONSTRAINTS

MUNICIPAL CAPACITY SHORTFALLS Lack of HR resourcing General absence of dedicated Housing Units, with lack of technical & financial over-sight Administrative inefficiencies Document management and archiving shortfalls resulting in slow certification processes Absence of follow-through on Beneficiary Registrations, Conveyancing, Contracts Management etc Erratic attendance of officials in scheduled project management meetings All the above are exacerbated by a lack of focus, commitment, arising from the ‘unfunded mandate’ argument & mindset

DEPARTMENTAL RESPONSE TO OWN MONITORING MANDATE In view of high vacancy rate, Dept has contracted Project Managers(21) and Clerks of Works(24) Involvement of 10 Cuban Professional through Bilateral Support Programme to assist in the area of Quality Assurance Engagement of Local Government specialists However, large order-book(471) results in too many projects per person, to be monitored More resources required

NEGATIVE FACTORS AFFECTING 1st Quarter Spending 1. Administrative and Process-Related: Delays in Municipal Procurement processes for blocked projects approved in Oct/Nov 2005 with appointments only in April/May Beneficiary Registrations Conveyancing Delays. EIA & NHBRC Approvals

2. CONSTRUCTION MANAGEMENT Inadequate Contractor skills-depth (CHDM,ADM,ORTDM,ANDM) High site-labour turnover Material Supply & Capacity Constraints (ORTDM,CHDM;ADM) Site-establishment & related logistics (ADM,ORTDM,ANDM,UDM) Road Access Water availability

RECOVERY INTERVENTIONS Ongoing interaction : with Municipalities involved through bi-laterals at senior management level, and through the facilitation of our project management team to assist in resolving identified bottle-necks.

Outstanding Beneficiary Registrations Department in discussions with municipalities to clear the backlog of outstanding registrations. This involves finding alternative beneficiaries where the original applicants can no longer be found, or close-off projects at current progress mile-stones

Involvement of Thubelisha Through facilitation of national Minister MOA in place with Thubelisha assist with unblocking & cross-cutting problem areas: Taking over the implementation of some unblocked projects for which funding has been released and in which Developers have under-performed Taking over the project initiation & implementation of approved projects (R300m worth) for which Municipalities have failed to submit project applications over a period of time

Involvement of Established Contractors Established contractors to be attracted back into the sector through: Clustering of projects into bankable formations Thubelisha to act as overall Project Management Agent Established contractors to embrace emerging contractors within appropriate sub-contracting arrangements Above strategy expected to ensure a delivery regime of sufficient velocity, scale and quality compliance

THE RECTIFICATION PROGRAMME Programme allows for rectification of defective units produced since 1994 Pre-condition is for necessary legal action against defaulted parties to be effected

NHBRC RECTIFICATION INVOLVEMENT NHBRC to undertake the following : Full scale scoping exercise for Province Initial rectification to focus on identified pilot areas NHBR to assume complete accountability for end-product throughout. Rectification Programme, soon to commence will further help raise expenditure profile

CONCLUSION The Department remains committed to meeting its spending targets for the current financial year, and to fulfill its developmental objectives!

Thank You Comments & Questions