1. 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

2. 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.

3. 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.

4. 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.

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

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

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

8. HOUSING EXPENDITURE 2007 / 08 PER HOUSING INSTRUMENT

9. OUTPUTS : NON FINANCIAL 2007/08
Jobs created
Female contractors
Emerging contractors
Individual housing subsidies
R7500 capital discount subsidies
Houses completed with finishes
Confidential.

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

11. 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

12. MONITORING CAPACITY /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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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 sites and implementation in June 2008

24. 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.

25. HOUSING DELIVERY TARGETS 2008/09
Sub-Programme / s
Performance Measures
Year 1
2008/2009
(target)
Rectification of RDP Stock
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

26. 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

27. 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

28. 2008/09 Business Plan
Batch 1: units are under construction as new projects
Batch 2 : 4057 units awarded target date for construction O1 June 2008
Cluster of new projects sites in two phases of and 8328 prepared for implementation : target date to complete exercise June 2008 for phase 1.

29. 2008/09 Business Plan Targets
28421 transfers
2 prime land parcels acquired
420 social housing units
subsidies approved

30. 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

31. Thank You!