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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 :

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eastern cape department of housing

EASTERN CAPEDEPARTMENT 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 TokoXasa

introduction
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.
slide3
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
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
Turn Around PlanWhat immediate priorities we pursued to drive delivery & expenditure?
  • Emergency Housing / Temporary structures
  • Rectification Programme
  • BNG Pilots
turn around plan
Turn Around Plan
  • Unblocking projects
  • New projects :
    • Batch 1 and Batch 2
actual outcome housing conditional grant 2007 08
ACTUAL OUTCOMEHOUSING 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%
outputs non financial 2007 08
OUTPUTS : NON FINANCIAL2007/08
  • Jobs created 2038
  • Female contractors 12
  • Emerging contractors 360
  • Individual housing subsidies 613
  • R7500 capital discount subsidies 618
  • Houses completed with finishes 7209
outputs non financial 2007 08 contd
OUTPUTS : NON FINANCIAL2007/08 (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

monitoring capacity 2007 08
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
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
slide14
Key factors which affected expenditurePractical 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
Key factors which affected expenditurePractical 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 ground16
Key factors which affected expenditurePractical 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 ground17
Key factors which affected expenditurePractical 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
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 measures19
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
key consideration 2008 09 budget
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
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
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
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.
snapshot of the business plan 2008 09
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 0927
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
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
2008/09 Business PlanTargets
  • 28421 transfers
  • 2 prime land parcels acquired
  • 420 social housing units
  • 25 000 subsidies approved
2008 09 business plan targets30
2008/09 Business PlanTargets
  • 3 PHP projects with 1000 units in rural areas
  • Pilot of the bulk material supplies model
  • 4 EPWP pilot projects
  • 5900 Jobs created