1. Standing Committee On Appropriations Readiness To Administer Grants Allocations For The 2013/14 Financial Year Mr. T. Zulu Director-General 1

2. Outline of Presentation Applicable Legislation; 2013 MTEF Grant Allocation; Human Settlements Development Grant (HSDG); Urban Settlements Development Grant (USDG); Rural Households Infrastructure Grant (RHIP). 2

3. Applicable Legislation Constitution of the Republic of South Africa, 1996 (Act No. 108 of 1996) Housing Act No.107 of 1997 The Housing Consumers Protection Measures Act, 1998 (Act No. 19 of 1998) The Housing Development Agency Act, 2008 (Act No. 23 of 2008) Public Finance Management Act, 1999 -Act No 1 of 1999 (As amended by Act 29 of 1999) The Social Housing Act, 2008 (Act No.16 of 2008) The Division of Revenue Act The Rental Housing Act, 1999 (Act No. 50 of 1999) Home Loan and Mortgage Disclosure Act, 2000 (Act No. 63 of 2000) 3

4. 2013 MTEF Allocations 4 Programme Medium Term Estimates 2013/142014/152015/16 Administration422,399426,948445,106 Human Settlements Policy, Strategy and Planning84,05589,30192,967 Programme Delivery Support226,922239,335251,305 Housing Development Finance27,377,08729,450,58331,957,214 Human Settlements Development Grant 16,983,872 17,918,321 19,667,204 Urban Settlements Development Grant 9,076,906 10,334,684 10,699,773 Rural Households Infrastructure Development106,721113,124118,328 Departmental agencies 1,133,751 1,002,070 1,388,035 Total28,110,46330,206,16732,746,592

6. Programme Medium term estimates 2013/142014/152015/16 Human Settlements Development Grant 16,983,872 17,918,321 19,667,204 Urban Settlements Development Grant 9,076,906 10,334,684 10,699,773 Rural Households Infrastructure Grant 106,721 113,124 118,328 Housing Development Agency 97,497 National Urban Reconstruction and Housing Agency 100,000 Social Housing Regulatory Authority: Operational 32,151 33,480 35,020 Social Housing Regulatory Authority: Capital restructuring grant 904,103 867,543 1,248,400 Total 27,301,250 29,364,649 31,866,222 Transfer Payments

7. Human Settlements Development Grant Goal - The creation of sustainable human settlements that enables an improved quality of household life Purpose - To provide funding for the creation of sustainable human settlements Outcome 8 - Facilitation and Provision of Access to Basic Infrastructure, Top Structures and Basic Socio Economic Amenities that contribute to the creation of sustainable human settlements Improved rates of employment and skills development in the delivery of infrastructure 7

8. Human Settlements Development Grant Provincial Allocations 8

9. National Priority Programme Allocations 9 ProvinceTown 2013/142014/15 2015/16 EASTERN CAPEDuncan Village 109,767 117,881 129,386 GAUTENGLufhereng 182,944 196,468 215,644 Diepsloot 91,472 98,234 107,822 Sweetwaters 45,736 49,117 53,911 Khutsong 96,046 103,146 113,213 Sub Total 416,198 446,965 490,590 KWAZULU-NATALCornubia 120,743 129,669 142,325 LIMPOPOLephalale 291,651 313,211 343,781 WESTERN CAPEDrommedaris 62,736 67,374 73,950 Total 1,001,095 1,075,099 1,180,032

10. 20% Allocation to Specific Outcome Targets 10 2013/14 Province Upgrading of Informal Settlements Rental and Social Housing Land acquisition National Priority Programme EASTERN CAPE 145,778 170,074 24,296 109,767 FREE STATE 62,861 73,338 10,477 - GAUTENG 246,500 287,584 41,083 416,198 KWAZULU-NATAL 191,022 222,860 31,837 120,743 LIMPOPO 77,345 90,235 12,891 291,651 MPUMALANGA 67,424 78,661 11,237 - NORTHERN CAPE 22,712 26,497 3,785 - NORTH WEST 71,894 83,876 11,982 - WESTERN CAPE 115,558 134,818 19,260 62,736 Total 1,001,095 1,167,944 166,849 1,001,095

11. HSDG Allocations to Metropolitan Councils 11 ProvincesMetropolitan 2013/142014/15 2015/16 EASTERN CAPENelson Mandela 206,900 220,800 242,351 GAUTENGEkurhuleni 933,800 996,600 1,093,871 Jo'burg 1,314,000 1,403,000 1,539,937 Tshwane 788,600 841,700 923,852 Sub Total 3,036,400 3,241,300 3,557,661 KWAZULU-NATALeThekwini 878,400 937,600 1,029,113 WESTERN CAPECape Town 733,484 782,870 859,280 Grant Total 4,855,184 5,182,570 5,688,405

12. Provincial Business Plan Programmes Allocations 12 Programme No of housing units No of serviced sites Funds allocated R'000 % Allocation 1.1a Individual housing subsidies (R0 - R3 500) Credit linked 202 - 46,9680.28% 1.1b Individual housing subsidies (R0 - R3 500) Non-credit linked 1,408 200 117,8870.70% 1.2 Housing finance linked individual subsidies FLISP (R3 501 - R7 000) 2,499 80 238,9411.42% 1.3 Enhanced Extended Discount Benefit Scheme (EEDBS) - - 68,9540.41% 1.4 Asset Maintenance Programme - - 59,0600.35% 1.5a Rectification of RDP Stock 1994 - 2002 - - 464,0472.77% 1.5b Rectification of Housing Stock (pre - 1994) - - 221,8911.32% 1.6 Social and Economic Facilities - - 145,7120.87% 1.7 Accreditation of munics (level 1 & 2) - - 93,6110.56% 1.8 Operational Capital Budget - - 442,9342.64% 1.9 Blocked Projects 2,563 170 184,3261.10% 1.10 NHBRC Enrolment Fees - - 145,1910.87% 1.11a Land Purchases - - 278,1091.66% 1.12 Updating of Housing Chapters of IDP - - 26,5470.16% Sub-total 6,672 450 2,534,17815.11%

13. 13 Incremental Housing Programmes No of housing units No of serviced sites Funds allocated R'000 % Allocation 2.1 Project Linked Subsidies (current commitments approved up to 31/03/07): Excluding blocked projects 8,597 3,414 724,8964.32% 2.2a Integrated residential development Programme: Phase 1 Planning & services (excluding Informal Settlements) 100 20,415 651,8283.89% 2.2b Integrated residential development Programme: Phase 1 Planning & services (Informal Settlements) 1,207 10,239 342,3582.04% 2.2c Integrated residential development Programme: Phase 2 Top structure construction 17,850 1,142 2,056,21712.26% 2.2d Integrated residential development Programme: Phase 2 Top structure construction Informal Settlements 8,444 583 689,6864.11% 2.2e Integrated residential development Programme: Phase 4 Top structure construction - Informal Settlements 12,384 - 663,6763.96% 2.3a Enhanced People's Housing Process (excluding informal settlement upgrading) 2,885 - 111,3180.66% 2.3b People's Housing Process (informal settlement upgrading) 9,765 120 679,2934.05% 2.4 Informal Settlements Upgrading 20,267 24,207 2,241,30613.36% 2.5a Consolidation Subsidies (Excluding blocked projects) 1,036 - 112,6630.67% 2.5b Consolidation Subsidies (blocked projects) 50 - 3,5000.02% 2.6 Emergency Housing assistance 3,442 802 407,1162.43% Sub-total 86,027 60,922 8,683,85751.77%

14. 14 Social and Rental Housing Programmes No of housing units No of serviced sites Funds allocated R'000 % Allocation 3.1 Institutional Subsidies 2,739 175 331,7521.98% 3.2a Social housing: Operational support - - 2,7300.02% 3.2b Social housing: Capital grants for rental housing 1,856 - 94,7760.57% 3.3a Community residential units (Converted/Upgraded) 1,453 100 754,5754.50% 3.3b Community residential units (Constructed) 1,504 500 417,3732.49% Sub-total 7,552 775 1,601,2069.55% Rural Housing Programmes No of housing units No of serviced sites Funds allocated R'000 % Allocation 4.1 Farm Worker Housing Assistance 128 725 32,5650.19% 4.2 Rural Housing communal land rights 35,976 8,088 2,731,80816.29% Sub-total 36,104 8,813 2,764,37316.48% Other Housing Programmes No of housing units No of serviced sites Funds allocated R'000 % Allocation 5. Priority Projects 4,035 4,829 1,062,5046.33% 6. Provincial Specific Programmes 1,648 628 126,3360.75% Sub-total 5,683 5,457 1,188,8407.09% TOTAL 142,038 76,417 16,772,454100.00%

15. Credit Linked Individual Subsidy Programme: – Free State, North West and Western Cape to implement the programme; Financed Linked Individual Subsidy Programme: – R239 million to be spent on the FLISP programme in Provinces and 2 500 beneficiaries to benefit; Rectification Programme – Plans to spend R686 million in all Provinces in 2013/14; Accreditation support to municipalities: – R93 million to be spent on this Programme in Provinces except for Gauteng and Western Cape; 15

16. Blocked projects: – R184 million planned to be spent to unblock projects in Eastern Cape, Free State and North West; Land Parcels; – Provinces to procure land to the value of R278 million; Rental and Social Housing: – Provinces plan to delivery 7 552 units amounting to R1.6 billion; 16

17. Incremental Housing Programmes: – Includes Informal Settlements Upgrading and Provinces plan to deliver 86 027 housing units and 60 922 serviced sites valued at R8.6 billion; Rural Housing Programme: – The Programme has been allocated R2.7 billion by Eastern Cape, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape and North West. 17

18. Current Challenges Lack of bulk and link infrastructure and related funding to implement projects; Delays in the planning of supply chain management; Lack of technical capacity at provinces and municipalities; Poor in the alignment, cooperation and coordination of strategic objectives and programmes of Provinces, Municipalities and Entities Inadequate medium and long term pipeline planning for programmes and projects; Deficiencies in data management and integrity. 18

19. Interventions Provinces and Municipalities to align all grants to ensure bulk infrastructure is in place before implementation of programmes and projects; Provinces and Municipalities must develop and align programme and procurement plans Feasibilties to ensure programme and project readiness. Programme Management Units to be established and prioritised. Provinces to utilise the HSS to administer and report on all human settlements delivery programme and processes. 19

20. Measures Undertaken by DHS  Provincial Business plans for 2013/14 have been received and analysed by the DHS.  The 2013/14 Allocation letters sent to Provinces to allow for programme and project planning  From 28 February to 1 March – 3 rd Quarter Mid Term reviews were conducted with Provinces and Council on Performance, Spending and Planning for 2013/14  DHS commented on 2013 DoRA Bill including Grant Frameworks. 20

21. Urban Settlements Development Grant Grant Purpose: – To improve the efficiency and coordination of investments in the built environment through: – Providing large municipalities with appropriate resources and control over the selection and pursuit of investment programmes in the built environment; – USDG is an instrument for Metropolitan Council to address linkages between public housing and economic growth to simultaneously and contribute to Human Settlements Outcomes 21

22. USDG - Objectives USDG intends to integrate the release of well located land to the function of planning and funding of the built environment; Encourage cities to be proactive developers of infrastructure on well located land by mobilizing domestic capital; Compel improvement in development planning and also improve inter-governmental co-ordination (all 3 spheres) of development. Compel improvement in development planning and also improve inter-governmental co-ordination (all 3 spheres) of development. 22

23. USDG - Objectives I ntroduced to address: – Problems of inadequate control and management of investment in the built environment; – Inadequate coordination of planning and weak accountability of all role players; and – Focus on the development of urban land and infrastructure that is intended to the lay the foundation for local municipalities to gradually assume a greater role in managing built environment investments 23

24. USDG Allocations to Metropolitan Councils 24 ProvincesMetros 2013/142014/15 2015/16 EASTERN CAPEBuffalo City 613,305 698,290 722,958 Nelson Mandela 727,986 828,863 858,144 Sub Total 1,341,291 1,527,152 1,581,102 FREE STATEMangaung 596,719 679,406 703,407 GAUTENGEkurhuleni 1,584,912 1,804,532 1,868,280 Jo'burg 1,488,877 1,695,189 1,755,074 Tshwane 1,290,611 1,469,450 1,521,361 Sub Total 4,364,400 4,969,171 5,144,715 KWAZULU-NATALeThekwini 1,580,999 1,800,076 1,863,667 WESTERN CAPECape Town 1,193,497 1,358,879 1,406,883 Grant Total 9,076,906 10,334,684 10,699,773

25. USDG DELIVERY PERFORMANCE 25

26. Challenges  Lack of Coordination and alignment experienced within Metros that causes poor service delivery coordination for USDG;  Lack of capacity to carry out programme plans;  Critical vacancies and consistency of personnel managing the USDG;  Land acquisition challenges and limited land in close proximity to the city centre; 26

27.  Multi-year projects are budgeted for in one financial year due to inadequate planning of projects;  Lengthy procurement processes;  Legal challenges - Tenders being contested in court for major projects;  Management and governance of informal settlements; 27

28. Interventions Improving the alignment and coordination in implementation of the USDG; Capacity constraints to be addressed through the Cities Support Programme established by National Treasury; Metropolitan Municipalities encouraged to appoint officials on a full time; Land acquisition management to be improved with the assistance of the Housing Development Agency; 28

29. Conducting of project readiness and attached list of projects as addendum to Performance Matrix; Councils to develop a programme plans aligned to procurement plans National and Provincial support for land acquisition, informal settlement upgrading and policy formulation to support council implementation 29

30. Support Processes In Place The Department has developed and presented a turnaround strategy to improve spending for the Councils’ and presented to Technical MinMec, Portfolio Committee on Human Settlements etc. Performance Matrix developed that addresses human settlements related issues Consulted with National Treasury to incorporate the matrix in the Service Delivery Business and Implementation Plan (SDBIP) reporting template so as to have one single reporting template Support to be provided through the National City Support Programme (CSP) to the Metros with capacity constraints. 30

31. Support Processes In Place The Department has the following systems in place for monitoring the implementation of the USDG: – Quarterly oversight visits are planned with all Councils to monitor progress and to address challenges. – Quarterly reviews are conducted with Metros. – Monthly Expenditure Analysis and Quarterly feedback to individual metros. – Regular reviews and programme and policy support with Sector Department to Councils – City Budget Forum, Outcome 9, NUSP and Accreditation. 31

32. 32 Rural Households Infrastructure Grant The purpose of the Grant is to provide capital funding for the reduction of rural water and sanitation backlogs and to target existing households where bulk dependent services are not available. The grant was initiated as a schedule 7 grant in the 2010/11 financial year and amounted to R1.2 billion. The grant has allowed for 50 065 Household to have been served with basic sanitation since its inception in 2010.

33. 33 The schedule of the grant has changed from schedule 7 to 5b with effect from 2013/14. The Grant will be implemented by municipalities with the support of the Department For the next three years the grant allocation is as follows: 2013/14: R106 million 2014/15: R113 million and 2015/16: R118 million.

34. RHIG Allocation per Municipality Eastern Cape2013(R’000)2014/15(R’000)2015/16 (R’000) Mbhashe4 500 4 528 Mnquma4 0004 5004 000 Engcobo4 5114 000 Elundini4 0004 5004 000 King Sabata Dalindyebo4 0004 5004 000 Matatiela4 0004 500 Total Eastern Cape25 01127 00020 528 34 Free State2013/14 (R’000)2014/15(R’000)2015/16 (R’000) Maluti a Phofung4 000 4 5005 000 Total Free State4 0004 5005 000

35. RHIG Allocation per Municipality KWAZULU-NATAL2013/14 (R’000)2014/15 (R’000)2015/16 (R’000) Umzumbe4 0004 5005 000 Umnambithi/ladysmith4 0004 1245 000 Umvoti4 000 5 000 Dannhouser4 0004 5004 000 Nongoma4 5004 0005 000 Jozini4 000 5 000 Umhlathuze4 0005 000 Umlalazi4 000 5 000 Ndwedwe4 000 5 000 Umzimkhulu4 0004 5005 000 Total -KwaZulu- Natal40 50042 62449 000 35

36. RHIG Allocation per Municipality. LIMPOPO2013/14 (R’000)2014/15 (R’000)2015/16 (R’000) Great Giyane 4 500 4 0005 000 Great Tzaneen4 000 4 500 Thulamela 4 0004 500 Lepel- Nkumpi4 0004 500 Great Tubatse4 0004 500 Total Limpopo20 50022 00023 000 36 MPUMALANGA2013/14 (R’000)2014/15 (R’000)2015/16 (R’000) Nkomazi4 500 4 000 Total Mpumalanga4 500 4 000

37. RHIG Allocation per Municipality NORTHERN CAPE2013/14 (R’000)2014/15 (R’000)2015/16 (R’000) Ga- Segonyana4 210 4 5004 000 Total Northern Cape4 2104 5004 000 37 NORHT WEST2013/14 (R’000)2014/15 (R’000)2015/16 (R’000) Ratlou4 0004 5004 000 Greater Taung4 0004 5004 000 Total North West8 0009 0008 000 National Total106 721113 124118 328

38. Departmental Support To Municipalities The Department will support municipalities in the following manner: approve the business plans submitted by municipalities; Continuously monitor implementation and provide support to municipalities; Submit monthly financial and quarterly non- financial reports to National Treasury; Submit an annual evaluation report after the end of the financial year; and Prepare a payment schedule for the transfer of the grant to municipalities. 38

39. The Department is in the process of filling vacant posts at regional offices in order to provide support. Monitoring and reporting processes and schedules are being developed to report on financial and non-financial progress 39

40. 40 Thank you