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Mr. Speaker,
Honourable Members of the House,

The core functions of the Department of Housing are to provide low-income housing opportunities within the national housing policy framework; as well as to assist municipalities in housing development, and build capacity within the housing sector. Furthermore, as a Department, our goal is to offer comprehensive solutions to economic hardship by implementing sustainable community developments, which aim to have a significantly positive impact on both the social and economic conditions of the beneficiaries in their communities.

Outcome of the 2002/2003 Budget

Before outlining proposals for next year, a few remarks on the outcome of the 2002/2003 Budget are in order. I must emphasise the fact that this department operates two sets of allocations, namely, the Operational Budget received from the Provincial Treasury and the Housing Fund, which is a conditional grant from the National Department of Housing. In accordance with the approved adjustment estimates for the financial year, the allocation was distributed and the expenditure incurred is illustrated in the table below, in respect of the Operational Budget:

2002/2003 Operational Budget

Personnel Expenditure
Budget 2002/03: 111,458 000
Expenditure- February 2003: 90, 631 000
Projected Expenditure for March '03: 10, 308 000
Total Expenditure: 100, 939 000

Administrative Expenditure
Budget 2002/03: 16,932, 000
Expenditure- February 2003: 11 158 000
Projected Expenditure for March '03: 1 476 000
Total Expenditure:

Stores and Inventory
Budget 2002/03: 3 984 000
Expenditure- February 2003: 2 222 000
Projected Expenditure for March '03: 294 000
Total Expenditure: 2,516 000

Equipment
Budget 2002/03: 9 922 000
Expenditure- February 2003: 4 062 000
Projected Expenditure for March '03: 1 347 000
Total Expenditure: 5 409 000

Land and Building (inclusive of conditional grant SAHF)
Budget 2002/03: 869 412 000
Expenditure- February 2003: 645 836 000
Projected Expenditure for March '03: 127 410 000
Total Expenditure: 773 246 000

Professional and Special
Budget 2002/03: 63 555 000
Expenditure- February 2003: 27 125 000
Projected Expenditure for March '03: 6 830 000
Total Expenditure: 33 954 000

Services
Budget 2002/03: 718 000
Expenditure- February 2003: 207 000
Projected Expenditure for March '03: 131 000
Total Expenditure: 338 000

Miscellaneous Expenditure
Sub-Total (excluding conditional grans)
Budget 2002/03: 1 075 981 000
Expenditure- February 2003: 781 241 000
Projected Expenditure for March '03: 147 796 000
Total Expenditure: 929 037 000

Total: Statutory payment
Budget 2002/03: 502 000
Expenditure- February 2003: *expenditure included in personnel above

Total
Budget 2002/03: 1 076 483 000
Expenditure- February 2003: 781 241 000
Projected Expenditure for March '03: 144 428 000
Total Expenditure: 929 037 000

The expenditure incurred for the period ending 28 February 2003 is R781, 241,000 in respect of the Operational and Conditional Grant funding. The projected expenditure for the month ending 31 March 2003 would be R144, 428,000.
Other Grants

During the year the Department also received other conditional grants totalling R916, 279,000 -- which is made of South African Housing Fund (R862, 412,000) and Human Settlement Redevelopment Programme (R53, 867,000). The expenditure in respect of the South African Housing Fund Conditional Grant is as follows;

Housing Fund - Conditional Grant Expenditure

New Business - Subsidies
Budget 2002/03: 708,412,000
Expenditure- February 2003: 531,395,076
Projected Expenditure for March '03: 65,012,716
Total Expenditure: 596,407,792

Hostel Redevelopment Programme
Budget 2002/03: 56,000,000
Expenditure- February 2003: 22,470,453
Projected Expenditure for March '03: 10,732,500
Total Expenditure: 33,202,953

Previous Dispensation
Budget 2002/03: 98,000,000
Expenditure- February 2003: 85,823,286
Projected Expenditure for March '03: 51,219,566
Total Expenditure: 137,042,852

Total
Budget 2002/03: 862,412,000
Expenditure- February 2003: 639,688,815
Projected Expenditure for March '03: 126,964,782
Total Expenditure: 766,653,597

The acceptable norm for roll over is 5%. Our Department is projecting a rollover variance in respect of the Housing Fund at an estimate of 11%. I must stress, Mr Speaker, that this is a modest projection. With prospective payments that are already in the system, we are confident of achieving an even lower rollover percentage than projected. A contributing factor to the under-spending was the National Housing granting approval to Provinces in mid February 2003 for the utilisation of the Inflation Adjustment Allocation of R11.4 million and R53 million to address blocked/problematic projects due to escalation costs.

With your permission, Mr Speaker, I would like to explain that when we talk about New Business or Subsidies, we refer to our programmes like Slum Clearance, Rural Housing, Homes for AIDS Orphans etc. This would help explain the R708 million allocations, lest some think we have abandoned our priority programmes.

Housing delivery

Review of the current financial year

As from the first of April 2002, there has been a notable increase in the subsidy amounts allocated per income bracket. This increase is aimed at keeping up with the rate of inflation, the high cost of living as well as ensuring that at the end of the day the subsidy does indeed yield a house.

The Department aimed to accelerate urban housing development by finalising all existing housing projects, clearing up slums in towns and cities and developing new housing projects.

A concerted effort has been made to approve as many projects as possible. During the period under review, the Department undertook a number of housing projects and activities, which positively impacted on social and economic conditions of beneficiaries. The following has been achieved thus far:

* 1999/00: 34 projects and 17 692 subsidies approved
* 2001/02:49 projects and 30 788 subsidies approved
* 2001/02: 30 projects and 22 166 subsidies approved
* 2002/03: 31 projects and 25 586 subsidies approved to date

In the housing environment, policy changes occur continuously and adjustments have to be made accordingly. The impact of the changes varies from minimal to huge and they have a distinct impact on the ability of the department and also the developers to fulfil all their obligations. The latest changes to significantly influence performance, have been those surrounding the introduction of new procurement procedures for subsidised housing as well as the introduction of a cash contribution to be made by beneficiaries in order to qualify for the capital subsidy. The impact has been a reduction in the number of new projects that have been approved during the 2002/2003 financial year.

1. Administer housing subsidies in respect of beneficiaries for approved projects and maintain and update the Performance Developer System

2002/03 Est. Actual
* No. of subsidies approved per development and per project: 25 586
* Compliance with the subsidy policy: 100%
2003/04 Estimates
* No. of subsidies approved per development and per project: 25184
* Compliance with the subsidy policy: 100%

2.Housing delivery

2002/03 Est. Actual
* Projects approved in terms of the Provincial Housing Development Plan: 31
* Services completed in terms of the project development programme: 14 499
* Houses built in terms of project development programme: 14 436
* Properties transferred in terms of project development programme: 37 209
* Compliance with norms and standards: 100%

2003/04 Estimates
* Projects approved in terms of the Provincial Housing Development Plan: 47 Services completed in terms of the project development programme: 21 000
* Houses built in terms of project development programme: 21000
* Properties transferred in terms of project development programme: 21000
* Compliance with norms and standards: 100%

3. Human Settlement Redevelopment Programme

2002/03 Est. Actual
* Projects approved in terms of Housing Settlement Redevelopment Programme criteria: 36
* Projects completed: 22

2003/04 Estimates
* Projects approved in terms of Housing Settlement Redevelopment Programme criteria: 10
* Projects completed: 10

People's Housing Process

The Department of Housing moved towards the People's Housing Policy as an alternative to achieve better quality housing within the limitations of the current subsidy amount in our effort to encourage our people to house themselves, we have decided that those who do not partake in the building of their houses through the Peoples Housing Process (PHP), will get the normal R20300 while those who use PHP would be exempted from the R2 479.00 contribution that is required from each beneficiary. An additional amount of R570, 00 per beneficiary is allocated under the Peoples Housing Process primarily for the Establishment Grant.

One should also emphasise that this is in line with our adopted stance that the department will show more keenness in subsidizing those projects wherein our people are prepared to add on something, be it sweat equity or funds. The Department has taken this stance because we believe that people appreciate and value something, which they have helped to bring about. This is home ownership in its true sense.

Slums Clearance Programme

The slum clearance programme has grown to be one of the most successful of our programmes. This is evidenced by the fact that towards the end of last year we launched the biggest and boldest slum clearance project in partnership with the Ethekwini Unicity Council. This R200 million project, which is already under way, is expected to provide housing to 10850 families who have been living in slums in and around the greater Durban area. Out of the R200million allocated to the project, R50million was from the Department of Housing and R150million was from the Housing Operating account. Ethekwini Municipality has spent approximately R74million out of R200million budget that was allocated.

Rural housing

In respect of the Rural Housing Programme, One of the major challenges facing the Department is finding an acceptable mechanism to enable significant increases in the number of housing projects undertaken within rural Ingonyama Trust areas. The Department has identified these areas as especially needy, and solutions that will accommodate both the Municipal structures and the Traditional Leadership structures, are being investigated. It is envisaged that a broad agreement will be ratified by Traditional and Local Government affairs, the Ingonyama Trust, Traditional Structures and the Department of Housing - which will provide a comprehensive solution to the obstacles, which have been encountered in the past.

Capacity building: Working with Municipalities

During the course of 2002 we have seen a paradigm shift away from developer driven projects, towards the People's Housing Process (PHP) programme, largely due to the requirements imposed by non-PHP linked projects - namely the R2479.00 contribution required from each beneficiary. This shift has resulted in the housing process being more community based and "people driven", as opposed to develop managed, and has in turn placed additional pressure on the housing process -- as the municipalities now have to carry out extensive community facilitation, and in many cases they do not have the capacity to do this.

Investigations have also revealed that a large number of municipalities lack the capacity to perform a housing function, and that since the paradigm shift from developer driven housing projects towards municipal driven housing projects, this problem has become further exacerbated. Whilst the shift has enabled municipalities to get far more involved in the housing process, and has resulted in significantly better community involvement (and a clearer communication of the communities' housing needs), it has placed an enormous burden on the municipalities themselves.

The Department has therefore embarked on specific initiatives (through training and capacity-building programmes) to assist and empower municipalities to more effectively identify housing needs in their communities. The Department (with the financial assistance of the Flemish Government) is launching a very exciting project that will create a well structured and capacitated housing component at municipal level - with all the resources (human, financial, and technological) needed to undertake effective and efficient housing planning and delivery. This project, with a budget of approximately R6 million (towards which the Flemish Government has contributed 435,881.25 EUROS or approx. R4million) will include extensive capacity building programmes for municipal officials, Mayors, Amakhosi and housing consumers, and is likely to go a long way towards improving housing delivery to the citizens of our Province. The pilot project will focus on municipalities within the Uthukela District municipalities and the Umgeni Municipality, but it will be rolled over to other municipalities in due course.

Institutional training

Since the department is committed to ensure that institutions utilising institutional subsidies are also fully capacitated, the following training programmes were undertaken by the Department. Board development was conducted for the following institutions at a cost of R 42, 70-00:

* Ubunye Co-operative
* Shayamoya Housing Association
* Amatikwe Housing

A "Train-the-Trainer" workshop was also conducted for the following institutions at a cost of R 99, 200-00

* First Metro Housing
* Shayamoya Housing Association
* Housing Department Staff
* Ubunye Co-operative Housing
* Ethekwini Housing Association and the cost of the workshop was R99 200-00

A strategic planning workshop was held for Ubunye Co-operative Housing and Shayamoya Housing Association at a cost of R43, 340-00

Special projects

As part of the Department's continuing efforts to offer a comprehensive solution to both social and economic hardship experienced in the communities, we have incorporated a number of traditionally non-core related functions in our budget in an effort to uplift the poorest of the poor -- especially those affected by specific hardship like floods, or political violence. These efforts will continue with renewed vigour in the coming financial year, and we intend to focus more specifically on rural and tribal areas, where economic hardship and poverty and most severe.

1.Provincial Peace Initiative

An amount of R25 million was obtained from the Provincial Peace Initiative to repair houses damaged in political violence in KwaZulu-Natal. These funds were utilised for projects in Mpumalanga (eThekwini Municipality), Imbali (Msunduzi), and Wembezi (Umtshezi) - which are still currently underway, and Ezakheni (Emnambithi), which has already been completed. Although a number of contractual problems have been experienced along the way, the current projects are making good progress and should be completed by the middle of this year (2003). Altogether, these projects will bring relief to some 2524 houses in these four areas.

2.Disaster Management

An allocation of R24, 3 million was made to repair and replace houses damaged by floods. These projects, which involved a total of 14 different areas in the Province, are now complete, with the exception of one project at KwaMakhutha, which has experienced both contractual and social problems. These issues have now been substantially resolved, and it is estimated that the project will be complete by June 2003.

3.The Human Settlement Redevelopment Programme

This programme was initiated through the National Department of Housing with the purpose of correcting dysfunctionalities within human settlements.

The HSRP therefore funds projects which will contribute to the establishment of more viable, sustainable developments, and which will assist in overcoming the disparities and dislocations that have often resulted from the unequal distribution of resources during apartheid-based planning and development practices.

Within this Province, Inanda and KwaMashu have been identified as urban renewal nodes, and Ugu, Umzinyathi, Zululand and Umkhanyakude have been identified as rural development nodes that require priority attention.

The Department has initiated a total of 20 socio-economic studies -- one in each of the municipalities in the 4 rural nodes -- to complement their Integrated Development Plans, and to identify projects pertinent to the goals of the HSRP and other development programmes. In addition, 18 Community gardens are being established in existing communities in the Zululand District, and 2000 violence damaged houses in the Ugu District are currently undergoing repair.

The following projects have also been initiated and are currently being implemented within the eThekwini Municipality.

* The Dr Seme Urban Renewal Planning and Development Framework (for the Inanda Ntuzuma KwaMashu - INK - Presidential Project)
* The eThekwini Rural Development Framework Plan (for the recently incorporated rural areas)

The Upgrading of Bhambayi

* Upgrading of the Phoenix Sewage Treatment Works
* Etafuleni Residential Upgrading and Urban Agriculture Project
* The Design of Libya Road, Inthathakusa
* Amaoti Development Framework Plan
* Inanda Mission Reserve (Mqhawe) Development Plan

Other new projects currently under consideration for 2003/4 include:

* Repair to violence damaged houses in eThekwini Municipality in the following areas: Magabheni, Folweni, KwaMakhutha, Ntuzuma, Ndengezi, Inanda, Umlazi, Lamontville, Chesterville and KwaMashu.
* Stop 8 / Namibia Land Assembly
* Sim Place Land Assembly
* Besters Greening and Painting Project

AIDS related initiatives

The Department is actively involved in addressing the problems associated with the AIDS pandemic, by providing special funding for the establishment of cluster homes for AIDS orphans, and transitional accommodation for adults who are living with AIDS, and have been excommunicated by their families.

Dream Centre in Pinetown, for example, is a hospital that accommodates and gives support to AIDS victims. The patient's are not hospitalised permanently, but they are cared for a period of time deemed necessary for recuperation and attainment of an acceptable state of health, as determined by a qualified doctor.

AIDS projects that have been supported by the department.

Name: Makaphutu
Location: Bothas Hill
Number of Subsidies: 229
Total value of subsidies: R2, 949, 520

Name: Shayamoya community care centre
Location: Cator Manor
Number of Subsidies: 16

Total value of subsidies: R261, 464

Name: Dream Centre
Location: Pinetown
Number of Subsidies: 410
Total value of subsidies: R4, 592,333.

Name: Home of Comfort
Location: Kokstad
Number of Subsidies: 57
Total value of subsidies: R809, 970

Name: Midlands Orphanage and care centre
Location: Estcourt
Number of Subsidies:
Total value of subsidies: R1, 527575

Name: Lily of the Valley phase 2
Location: Eston
Number of Subsidies: 70
Total value of subsidies: R1, 143,905

The department is also currently working on funding three potential aids projects, namely;

* Rehoboth Child Care Centre, in Port Shepstone
* Ekusizaneni Children's Home, in Kwamashu
* Shepherd's Keep Child Care Centre, in Bluff

Institution based projects

Seven institutional projects that provide rental accommodation have been granted subsidies by the Department. The institutional management component of the Department serves as an observer on the Board of Director's meetings of each organisation.

Name of The Project: Howell road
Location: Durban
Number of units: 213
Total value of subsidies: R3, 919, 200

Name of The Project: Arcacia Park
Location: Petermaritzburg
Number of units: 300
Total value of subsidies: R7, 003,500

Name of The Project: Madimeni Section 21
Location: Kwangcolosi
Number of units: 504
Total value of subsidies: R11, 765, 880

Name of The Project: Albert Park
Location: Durban
Number of units: 106
Total value of subsidies: R2, 474, 570

Name of The Project: Mbazwane Section 21
Location: Mbazwane
Number of units: 500
Total value of subsidies: R11, 672, 500

Name of The Project: Jozini housing project
Location: Jozini
Number of units: 500
Total value of subsidies: R11, 672, 500

Name of The Project: Mpukunyoni rural housing upgrade
Location: Hlabisa
Number of units: 1000
Total value of subsidies: R23, 345,000

HOUSING PLANNING

The Department is constantly striving to establish means of maximising the impact of horizontal and vertical linkages with relevant Provincial and National role players - to ensure that housing planning and development takes place in an integrated manner, and that Housing is provided for in the IDPs of local authorities. Consultation, involvement, and monitoring of the IDP process therefore forms an integral part of the Department's responsibilities in the Housing delivery process.

As part of the communication strategy of the Department, all 10 District Municipalities and the Unicity were visited during the year, and presentations were delivered on the Provincial Housing Development Plan.

The Department has also successfully participated in the Provincial Multi-Sectoral IDP Forum, which was established in terms of the Municipal Systems Act to evaluate and provide comments on all IDPs in the Province.

A total of 61 IDPs were reviewed and commented on (in writing) at this Forum, where the following key areas were specifically looked at during the assessment process:

* Whether the IDP indicates housing demand;
* Whether the IDP is in line with housing priority programmes;
* Whether the IDP indicates budgetary implications for the DOH;
* Whether housing projects are aligned to other service provision elements such as CMIP, etc;
* Whether the IDP identifies the Municipality as the developer, rather than the DOH, or private consultants;

As part of the Department's efforts to ensure an integrated approach to housing delivery in the Province, we were involved in the operations of five steering committee meetings on Estuaries, four Provincial meetings on Sustainable Development, one meeting regarding the Thukela Water Project and six Standing Committee Meetings on Illegal Developments in KZN, in conjunction with the Department of Water Affairs and Tourism.

Hostel redevelopment and upgrading programme

1. For the current financial year 2002 / 2003 a total amount of R38, 713, 979. 28 was expended. This amount was expended on the upgrading programme for the following hostels:

* Umlazi "T": R 1 083, 979. 28
* Esikhawini (Richards Bay): R11, 920 000
* Dalton Road: R100 000
* Jacobs: R 5 700 000
* Sibongile (Dundee): R 3 530, 000
* Kwa Dabeka (Pinetown): R16, 380, 000
* TOTAL: R 38 713979 28

2. For the financial year 2003 / 2004 the forecasted expenditure is R61.2 million. The following hostels are included in the upgrading programme for the forth-coming year:

Umlazi Glebelands: R 10 m
Dalton Road: R 4 m
Klaarwater: R 1m
Steadville: R 5m
Bruntville: R 5m
Umlazi "T": R 75, 000
KwaMashu: R 26m
Esikhawini: R 4, 6 m
Sibongile: R 1,95 m
Kwezi: R 1, 95 m
East Street: R 1,7 m
TOTAL: R 61, 275 m

Challenges regarding the management of hostels:

* The reluctance of Municipalities to make additional funding available
* The low levels of payments by way of rentals and service charges, which is non-existent in most hostels.
* Poor administration / records and security.
* There is no regulation in place for implementation of lease agreements for residents in provincially owned hostels. Therefore the Department cannot enforce a rental structure, and this has a negative impact on recovering monies for basic service charges and accommodation.

Corrective actions and the way forward

* In partnership with the respective Local Authorities it is envisaged that each hostel within it's jurisdiction be identified, along with the ownership and population statistics, and the condition thereof.

* The Department will enter into negotiations with all Municipalities, Councillors and Hostel Development Committees to pave the way forward - with a view to prioritising the upgrading programme; depending largely on the condition of each hostel and the number of informal residents.

* In interacting with the Municipalities, negotiations must be entered and agreed upon for the following: -

(a) identifying land and re-housing affected persons before the upgrading programme commences.
(b) the Department must make available funding for the upgrading programme.
(c) the Local Authority must take transfer of the hostel and the administration hereof.
(d) the Local Authority /Non Governmental Organisation / Business must make additional funding available to cover any shortfall for the upgrading of the hostel, and also for the provision of community facilities.
(e) a firm commitment must be obtained from hostel residents for the payment of sustained economic rentals and for the payment of service charges.
(f) the formation of Section 21 Company or Body Cooperates must be undertaken, in order to empower communities to eventually take charge and manage their assets.
(g) in order not to isolate hostel residents, the neighbouring communities from the township must be included in negotiations in order to make the programme inclusive of all role players. This will eliminate divisions and/or strained relationships that presently exist between Hostel Residents and surrounding communities.

Rental Housing Tribunal

The Department has established the KwaZulu-Natal Rental Housing Tribunal and subsequently appointed its members in July 2002, following the enactment of the Rental Housing Act (Act No. 50 of 1999), which came into operation on 01 August 2000.

To date, 215 of the 321 complaints lodged with the Rental Housing Tribunal (some complaints dating as far back as May 2001) have been finalised. This represents a 75% success rate, which is particularly impressive given the fact that it was achieved in a 5-month period (November 2002 to March 2003) in which the Rental Housing Tribunal adjudicated over the complaints lodged with them. Despite the fact that the Tribunal inherited a huge backlog of complaints dating back to May 2001, the turnaround time for adjudicating over complaints is now less than 3 months.

Fraud

During the year under review, an amount of R334, 000 was recovered from TR Mfeka, a conveyancer who was struck off the legal roll. A further two attorneys, namely, T Mvelase and Mlaba, Makhaye who were also struck of the legal roll pending criminal action and the recovery of R 1,2 million and approx. R14 million respectively.

Criminal cases are to start in May 2003 in the case of Mlaba, Makhaye.

The Department also recovered a sum of R17, 500 from subsidy fraud. A further sum of R300, 000.00 was recovered from Ace and Kamty Building Suppliers as a settlement agreement arising from a forensic investigation.

The Department itself, through several investigations have discovered fraud, which included theft. These investigations led to the suspension of officials and criminal charges being instituted. One official has subsequently been dismissed.

Presently, 22 cases of alleged fraud are being investigated by the South African Police Services mainly relating to subsidy fraud, totalling R1, 3 million. The remaining cases total R 1 million.

The Department has also instituted forensic investigations into 2 housing projects. These projects included Kwanombamba Housing Project, Phase 1 and Kloof extension 15 & 18.

The Department is presently considering instituting a claim for recovery from the liquidators of Corporate Homes Trust, arising the investigation from into Kloof Ext. 15.

The more serious case currently under investigation involves the purchase of several residential and commercial properties in the Durban CBD, at what would seem to be, significantly higher than market related prices. Procedures have allegedly not been followed and the proper consultation process ignored. KPMG have been commissioned to conduct a forensic audit within the Department. Several search warrants have been carried out on a number of premises, and two arrests have already taken place.

Policy Developments

Better delivery through effective policy

A number of problem areas within the housing process have been identified, and the planning component of the Department have drafted a number of key policy documents that aim to facilitate more effective and efficient housing development within the Province. These new policies include:

1 Preparation Funding Policy

A number of local authorities have voiced their concerns about the need for bridging finance to cover the costs associated with the upfront expenditure required to carry out land audits, geotechnical analysis, Environmental Impact Assessments etc. prior to project submission and approval by the Department. This process normally involves expenditure that can run in hundreds of thousands, and which are subject to finance costs during the project approval process.

High interest rates have thus made it expensive for municipalities to package these projects, and in some cases it renders housing projects unviable, as local authorities do not have the necessary bridging finance to undertake the pre-approval process. In addition, the interest costs incurred must then be absorbed by the subsidy amount, thus reducing the residual amount available to build quality houses for beneficiaries. The allocation of bridging finance for preparation funds, from the Provincial Housing Fund Account, is therefore aimed at municipalities who do not have a municipal housing operating account, or have insufficient funds to carry the burden of this expenditure.

The department has identified this concern as a key factor in the maximizing of housing project delivery, and has drafted a policy, which now provides a mechanism in terms of which; municipalities can request financial assistance from the department to cover these initial costs. Risk assessment factors are included in the assessment application, in order to ensure responsible allocation of public funds. It is also envisaged that Municipalities will be able to obtain "Conditional Approval" of their projects in terms of Chapter 3 of the Housing Code at a much earlier stage of the process, thus eliminating more of the risk.

2 Draft Procurement Guidelines

Guidelines have been drafted which will ensure transparent processes in the packaging of all housing projects, through the application of procurement processes. These guidelines also include risk assessment tools, which will ensure responsible allocation of funding in accordance with the housing plan, as well as ensuring safe housing environments. These guidelines will be finalized in the coming financial year.

3 Draft Land Acquisition Guidelines

These have been prepared to assist municipalities in the processes to be followed in acquiring land, in terms of government legislation and prescripts. The document is to serve as a practical guide to the procedures laid down by the National Department. It will be released within the coming financial year.

4 Draft Provincial Rural Policy

The application of the provincial rural subsidy guidelines has caused many concerns to our traditional leaders, implementers, and other stakeholders. These concerns include:

* Concern with the requirement of formulating section 21 companies
* Alienation of land
* Practical implementation of survey matters
* Lack of guidelines with regard to payment mechanisms
* General inflexibility of the provincial policy.

These concerns have stifled delivery in rural areas, and the Policy Component researched the issue to establish what could be done. The process undertaken, involved consultation with implementers, Department of Traditional and Local Government Affairs, Department of Land Affairs, Ingonyama Trust Board, and House of Traditional Leaders.

The general finding was that a more fluid implementation system is required, which could accommodate the different levels of service requirements, tenure options, etc. The revised policy proposes that the municipality (as the service provider) enter into a development agreement with the traditional authority and the Ingonyama Trust Board. The document identifies the typical roles and responsibilities of all stakeholders, and includes information on the tenure forms that are available. The draft policy guidelines are complete, and will be approved for implementation early in the new financial year.

5 Excess Staff

One of the biggest challenges facing the Department is the large number of redundant staff that have remained employed by Housing, since the division of the Department of Local Government & Housing into two separate departments in 1999. It would appear that little has been done in the past few years to rectify this situation, but we have now identified this as a top-priority that needs urgent attention. We are thus currently implementing various measures within our Corporate Services component to ensure that appropriate solutions are found as quickly as possible, and a policy that seeks to rectify the situation shortly has been drafted.

The 2003/2004 Financial Year

Mr Speaker, Honourable Members of the House, I wish to now deal with the 2003/2004 budget itself.

The key priorities of the Department are as follows;

* Identifying new projects in rural areas, with specific focus on tribal land
* Speeding up the Rapid Land Release programmes
* Comprehensive strengthening of housing capacity within municipalities
* Renovating hostels, installing management and making them sustainable

The strategy also aims to find effective solutions to a number of long standing problems, including blocked projects, derelict hostels, and redundant staff.

The Budget allocation in respect of the South African Housing Fund Conditional Grant is as follows;

* Subsidies: R626, 957,700
* Hostel Upgrade Programme: 61,275,000
* Previous Dispensation: 108,157,300
* TOTAL: R796, 390,000

Operational Budget

The Department has been allocated a total budget of R157, 728,000.
The illustrative allocation of the Operational Budget for the 2003/2004 is as follows;

Programmes and 2003 - 2004 Budget

1.Management Services: 10,595

2. Corporate Services: 38,925

3. Planning, Legal Services and Information Management: 10,219

4. Project Management: 34,342
(Conditional Grant SA Housing Fund: R796, 390 m)
(Conditional Grant Human Resettlement: R 26,000 m)

5. Integrated Municipal Support and
Assets Management: 61,036

6. Auxiliaries and Associated Services: 2,100

Sub-total: Programmes: 157,217
Total: Statutory payment: 511
Total: Housing (operational): 157,728

Conclusion

Our theme for the coming year is Asibambisane, "Let us work together", and we see this as the focus point of all our efforts within the Department. We want to ensure closer co-operation and clearer communication between the Department and the communities we serve, and we want to work hand-in-hand with them in identifying housing needs and eliminating fraud and corruption within the housing process.

In order to achieve our objectives, we must begin by building a strong foundation upon which we can develop an infrastructure of solid and measurable achievements - but the first step is to make sure that we no longer fill water into a leaking bucket. We therefore plan to take all the necessary steps to tirelessly weed out the perpetrators of fraud and corruption, and one by one, they will meet with the strong arm of the law. We will eradicate abuse, theft, kick-backs, fraud, nepotism and we will also put an end to the failure of officials to report these activities.

Having only been in office since December 2002, I believe that we have had little time to make groundbreaking changes within the Department, but I am confident that now, more than ever, the Department has the ability to institute new processes, policies, and means of working, in order to develop a people-orientated culture that will focus on maximising our service delivery capabilities.

I am convinced that close co-operation and teamwork, coupled with both a strong commitment and a comprehensive plan, will prove to be our recipe for success. Together, we can put performance at the top of our agenda and bring happiness and homes into the lives of the poor. Let the people of KZN bear the fruit of our renewed efforts.

Mr Speaker Sir, Honourable Members, I thank you and I hereby table this Budget for debate and adoption by this House.

Issued by KwaZulu-Natal Department of Housing

10 April 2003