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Budget speech delivered by the MEC for the Department of Developmental Local Government and Housing, Frans Phenye Vilakazi
Provincial Legislature
24 June 2004

Madam Speaker
Honourable Premier
My Colleagues in the Executive Council
Members of the Provincial Legislature
Executive Mayors and Mayors
Dikgosi Tsa Gaetsho
Distinguished Guests
Friends and Comrades
Ladies and Gentlemen

INTRODUCTION

Madam Speaker! This may seem a strange way to start a Budget Policy Statement especially with a confession. 27 On April 1994, I was like a dog which had caught the bus ... but, ten years down the memory lane I am proud to have been part of chasing the bus through a liberation struggle of our motherland - South Africa, part of the North West Province and part of the legislature, in whose privilege I serve to change our motherland for the better.

The year ahead is going to be tough, challenging and turbulent therefore requiring an extraordinary resolve and effort.
I am equal to the task!

My predecessor believes I am taking over a great Department of Local Government and Housing which I must make much more greater! The challenge to succeed in this regard is brutal, complicated by communities deserving and demanding better municipal service provision, the dynamic situation of heavy political debate and a fast-paced housing delivery challenge. These are problems that quick fix solutions can't solve. I have put my mind, my heart and my commitment to taking this important call to duty forward and together with my team of officials, SALGA and all municipalities would strive to reach the highest peak in service to our communities. Our people deserve better!

Obviously, the institutional memory detailing our past experiences; shortcomings and achievements are well documented and presented to all our expectation and satisfaction by the Departmental Management Team. The paradigm in this connection emerged during an intense and vigorous election campaign led by the President of my party - the African National Congress, Comrade President Thabo Mbeki, when he visited young and old, black and white alike in their homes to receive what has to be done. This paradigm emerged during the Election Day (14 April 2004) itself, that saw millions in long queues of Gasegonyane, Garankuwa, Motswedi, Mafikeng, Kanana, Klerksdorp etc. on whose overwhelming mandate the ANC now governs. The people of South Africa entered into a People's Contract with the ANC led Government to deepen participatory democracy, provide municipal services efficiently and put quality shelter over their heads in a more rapid way, creating jobs and fighting poverty!

Marching orders from my Principals as mandated by the people

On 21 May 2004, His Excellency President Thabo Mbeki gave all of us Marching Orders setting the tone for a delivery framework underpinned by clear targets and time based deliverables in the State of the Nation address.

These targets inter alia refer to:

• Giving all people access to clean water in the next five years
  
• Extending basic sanitation to more than 300 000 households in the coming year
  
• Eradicating the bucket system in all our townships by 2006
  
• Spending R14 billion in the next three years to give people access to shelter
  
• R1.2 billion annually which will focus on bulk electricity infrastructure in rural areas to address an estimated three million household backlog in electricity.

The Hon. Premier B.E.E. Molewa on the 28 May 2004 directed all of us to more elaborate provincial orders of delivery.

These entailed:

Short term

• Delivery of thirty eight (38) housing projects through the Expanded Public Works Programme over the next five months
  
• Over R33 million will be spent on municipal infrastructure projects in the next three months
  
• Act decisively to ensure functionality of all those municipalities crippled by political and administrative problems resulting in the collapse of service delivery

Medium to long term

• Build capacity of municipalities to deliver services through training in Conflict Management, Project Management and administrative skills
  
• Guided by the National Strategy will assemble a trouble-shooting team to assist troubled municipalities
  
• Intensify the training of Ward Committees
  
• Roll-out the Expanded Public Works Programme to drive the Skills Development, targeting the youth, women and people with disabilities
  
• Capacitate traffic policing and public safety institutions aligning their work with counterparts in other provinces and at municipal level
  
• We will pilot Municipal Policing in Mafikeng and Rustenburg
  
• Departments and municipalities will play a role in the creation of 22 000 jobs through EPWP to contribute to the national target of one million jobs over the next five years
  
• Promote trade and export by strengthening skills base, identify and develop exportable goods and services increasing our net trade flow to 6% next year.

Minister Lindiwe Sisulu for Housing directs the department to:

• Eradicate informal settlements in the next six years,
  
• Develop rented and social housing, which I direct must be achieved within the next four years.
  
• Cabinet would by the end of July receive the How and how Many - details of this commitment.
  
• Building the capacity of municipalities, government officials, contractors and councillors.
  
• Setting up a special investigative unit to route out corruption and maladministration.
• Popularising the concept of Letsema in Housing for communities to initiate their own housing solutions.

Minister Sydney Mufamadi for Local Government & Provincial on 21 June 2004 directs the department to:

• Paying priority attention to the technical requirements for good governance: Assemble a high-calibre team to undertake an intense hands-on support for municipalities experiencing short-term needs
  
• Municipal Infrastructure Grant (MIG) to be launched within the next two months: Ensure that over 375 000 households benefit through the provision of clean water and that over 300 000 households benefit through access to basic sanitation in the year 2004/05
  
• Progressive nurturing of the solvency of our municipalities and helping define their developmental strategies: DPLG will issue Property Rates Act guidelines within the next three months.
  
• Equitable Share allocation to the local government sphere over the next three years: Revision will be finalised in this current financial year so as to start with an allocative pattern in 2005/6 financial year.
  
• Free Basic Programme to extend the social safety net to the most vulnerable in our communities: In 2004 DPLG will aggressively increase the coverage to communities. DPLG will work closely with DWAF to ensure the finalisation of the framework for the roll-out of Free Basic Sanitation by Dec. 2004.

Response to the Marching Orders

Over the past two months, we started a journey to shake the bureaucracy and shape the department in order to create an efficient organisation to meet the new paradigm. Create a place where people get up every morning searching for the better way to do their best improving on what they did yesterday. As we go about creating these efficiencies, we will not wait too long to get rid of managers and staff who aren't willing or able to change and embrace the new breeze of working to achieve on the marching orders.

We will spend extraordinary time relatively short to recruit, train, develop and reward the best amongst us. Change in how we will deliver will occur, as you have never seen before at speeds you've never seen. It will be fun for those who relish it and fearful for those who don't grasp its opportune moment.

In the next three weeks or earlier, we will emerge with a new organisational structure integrating like functions and find innovative ways to optimise the impact of new local government system; implement the transformation phases simultaneously; improve and strengthen the coordination of national, provincial and local government in key areas of delivery; and last but not least accelerating the 15 PCC interventions on local government.

We will create innovative internal systems to for the required synergies, create turnaround standards of timelines and give each manager a performance based contract of work to be evaluated quarterly over the next twelve months. These we will produce within the next six weeks and fully implement in two months thereafter - by September 2004.

The Growth Path of Local Governance

Since the inception of the new dispensation in 1994 South Africa has been seized with the daunting challenge of redefining the constitutional state and the parameters within which a new local government system was to be born and nurtured. However, the Constitution of 1996 and the White Paper on Local Government released in 1998 introduced a paradigm shift from the way local government was conceptualised to a new developmental system whose predisposition was the improvement of the quality of life of their communities.

The transformation of local government has had multiple milestones ranging from the pre-interim phase, interim phase and final phase. The last phase, aptly characterised as the final chapter and representing the ultimate onslaught on apartheid induced human settlements and racial segregation has come into existence and is beginning to register tremendous impacts in the lives of ordinary citizens.

Because we deliver this address in a celebratory atmosphere as we mark the Tenth Anniversary of our Freedom, honourable members may be inclined to confuse the age of local government with that of the other two spheres of government.

Honourable members are aware that for the North West Province, the re-demarcation process culminated in the reduction from 53 to 25 of municipalities in the province. 5 of these municipalities were accorded the status of 'cities'. The wall-to-wall configuration of our new system of government sought to ensure that the benefits of democracy permeate the totality of our socio-economic landscape and that the benefits of liberation are cascaded to all segments of our society, with particular focus on the poorest of the poor.

Allow me Madam Speaker to single out municipalities such as Potchefstroom, Klerksdorp, Rustenburg, Bophirima, Greater Taung, Moses Kotane and Bojanala Platinum District municipalities, who are really doing well in tackling the challenges of local government transformation and championing a course of realising a people-centred developmental state.

Of course there are other municipalities as well which have not been acknowledged above and are on the right path and doing their outmost best to be counted amongst the few.

Madam Speaker I will be in due course submit to your House a consolidated Municipal Annual Performance Report of the Financial Year 2002/ 03 in compliance with Section 47 of the Municipal Systems Act.

Oversight and Monitoring of Municipal Councils in the North West

Contrary to the belief by some Councillors, Section 139 of the Constitution intends nothing but to assist Municipalities meet their obligations - that of serving their communities with basic services and developmental needs without fail. My predecessor rightly intervened through Section 139 to stabilise and normalise deteriorating administrative and political functioning of various municipalities impacting negatively on service delivery. In the intervening period, Lekwa-Teemane Local Municipality has been successfully dealt with and normalisation has returned. Mafikeng Local Municipality is currently under Section 139 (b), which proves to be difficult but insurmountable to resolve. Recently an Agent was appointed and the departmental seconded official was withdrawn to fast-track and consolidates the intervention.

At the heart of most of these interventions, is lack of discipline and cooperation amongst councillors, which ultimately affects the functioning of the council. It also affects the administration and consequently service delivery. As a Province, we then have a constitutional responsibility to ensure that municipalities maintain national standards or meet established minimum standards for the rendering of services.

We cannot abdicate this responsibility and let the community suffer in the hands of people who are otherwise more interested in issues unrelated to the well being of the community, and for that we will not hesitate to intervene, bring perpetrators to book and cause the re-election of leaders who will put first the interest of the community.

We are intending to take practical measures to ensure that we discharge our constitutional mandate in earnest and avoid reacting to situations and only responding when the situation has worsened.
This is what we will be doing:

• Establish early warning systems to monitor the performance of municipalities on a monthly basis
  
• Develop an empowering legislation and regulation in line with Section 156 of the Constitution and 105 of the Municipal Systems Act to streamline monitoring of municipalities
  
• Establish a Rapid Response Team (Unit) that will ensure that municipalities discharge their constitutional mandate and receive support timeously.

We do so mindful of the need to streamline our capacity building, support and monitoring responsibilities without having to create a cumbersome and onerous reporting regime, which would burden municipalities. Clear performance indicators will be standardised as agreed upon with SALGA North West and be used to track the performance or lack thereof by municipalities.

The establishment of the Rapid Response Team, headed by fairly Senior Managers, is to intervene in an activist and non-conventional bureaucratic manner to the current problems faced by municipalities. This is still in line with the view by our sister Departments (DPLG) of establishing a trouble shooting capacity at national and provincial government in order to identify and unblock bottlenecks inhibiting the acceleration of service delivery and local government transformation.

In order to realise the peoples' contract and mobilising social partners around issues of poverty and service backlogs, we are of the view that we need to sufficiently oil our machinery to be more proactive and responsive.

A number of local municipalities face varying challenges that require careful consideration without undermining their role. Whilst some of the problems are already in the public domain the department needs to be very careful on how it will assist municipalities to meet these challenges. Our actions must not be arbitrary but rather take Council along when meeting out any form of assistance.

Municipal Finances

We are creating ourselves a niche of ensuring that municipalities rapidly improve their ability to collect their debts, reduce the escalating debt situation, improve their revenue raising and collecting capabilities and addresses the plight of the indigent consumers.

Whilst we also believe that the problems of local government finances lay at the heart of intergovernmental fiscal relations as well, we equally believe that there still exists measures that are innovative through which debt collection can be improved and more revenue streams created in line with the Property Rates Act and other ingenious methods.

We have already engaged other partners like the DBSA Development Fund and INCA to develop a Municipal Finance Capacity Building Strategic Partnership. With this partnership, we will be assisting municipalities to improve their treasury capacity by placing all their current Chief Financial Officers, municipal accountants and treasury officials under a compulsory needs-based training intervention. This will be a combination of class-room training and on the job-training.

We will also combine it with learneship training since most of the municipal treasury departments are understaffed and cannot engage in any other non-rudimentary financial management and debt collection methods. Through this leanership programmes, we will be creating a pull of municipal finance experts which would ultimately be at the disposal of municipalities including those that are small and are struggling to attract the best skills in the market.

I am happy to announce to your house that the DBSA Development Fund has on Tuesday (i.e. two days ago) approved our submission to source funding to assist the embattled Treasury Department of Mafikeng Local Municipality. An amount of R850 000 was approved and together with the municipality, we will be looking at sourcing-in additional capacity/ people to assist the debt collection unit over a period of no less than eight months in order to track defaulters and rescue the municipality from its escalating debt situation and perpetual reliance on the overdraft facility.

We cannot allow a situation were municipalities run their finances with an overdraft and compromise service delivery and maintenance. The money will also be used to re-skill the current treasury staff and ensure that they are equal to the task.

Municipal Leadership Training Academy

In collaboration with the University of North West and the South African Local Government Association within the province, the Department has established a Municipal Leadership Training Academy to strengthen the capacity of local government practitioners within the province. Among others, MULTA will focus on endowing local government practitioners with the necessary capacity to which the President referred. Additionally, the institution will improve on the effective participation of women in local governance.

MULTA has already commenced training in earnest in March 2004 on areas such as: Local Economic Development, Performance Management, Strategic Planning, Environmental Planning, Housing Management and Ward Committee training.

Community participation

Madam Speaker, we have committed this government to a "people's contract". The people have already out-performed us by delivering a huge turnout at the last national elections. The ball is now in our court to return the favour.

We have set aside about R1, 9 million to train ward committees and appoint 120 Community Development workers during the current financial year.

The aim of this endeavour is to engage all social forces and improve direct access to civic and residents' needs, working at site levels to empower councillors to reduce social distance and improve access to government information and services. Many of our people are still struggling to access government information, and therefore there is a corresponding need to improve citizens' knowledge of their rights, obligations and skills to improve their lives. The community development workers will be working side by side with ward committees and ward councillors to assist communities and provide them with knowledge on what government can also do for them.

This would have to permeate the entire life of society, because we would want to see everybody, more especially government officials, taking an active role in their ward committees, civic structures, NGOs and CBOs. This challenge is also extended to the business, farming and faith organisations to begin to proactively take keen interest in the affairs of their municipalities to bridge the social gap and undermine the set realties of the "two economy".

We will not waist any time to ensure that councillors are accountable to the community and not only wait for the next elections to start holding ward meetings. Together with SALGA North West, we will have to ensure that accountability is not only paid leap service but is practiced. I am sure that this appeal can as well be extended to other political parties present in your house, to make sure that public representatives deliver their part of the contract.

Free Basic Services

Significant progress has been made in the roll-out of Free Basic Services by municipalities in areas where the required infrastructure is available. The accelerated implementation of Free Basic Services to poor households not catered for yet requires effective coordination between the three spheres which matter now receives priority focus. Municipalities lacking behind due to incapacity will be assisted and brought up to speed with others. The assessment of such Municipalities will be completed within the next three months.

Summary Report from DWAF

Total Population: 3, 626
Served / Providing: 2,028
% Served: 56%
Poor Population: 2,682,552
Served / Providing: 644,034
% Served: 24%

Population with Infrastructure: 3,011,126
Served / Providing: 2,028,631
% Served: 67%

Local Municipalities / Metro: 27
Served / Providing: 17
% Served: 63%

+The figure above is a report of the year 2000 and has since risen to about 70 % of households with access to free basic water services.

Summary of Electricity Provision

ELECTRIFICATION PROJECTS IN THE NORTH WEST PROVINCE

DISTRICT COUNCIL

CENTRAL
NO OF CONN 1994 -2002: 131863
AVE COST PER CONN: R 2,800.00
COST ON AVE: R 369,216,400.00

BOPHIRIMA AND KGALAGADI
NO OF CONN 1994 -2002: 85883
AVE COST PER CONN: R 3,000.00
COST ON AVE: R 257, 649,000.00

SOUTHERN
NO OF CONN 1994 -2002: 53246
AVE COST PER CONN: R 2,000.00
COST ON AVE: R 106,492,000.00

BOJANALA
NO OF CONN 1994 -2002: 226013
AVE COST PER CONN: R2, 500.00
COST ON AVE: R 565,032,500.00

TOTAL
NO OF CONN 1994 -2002: 497005
AVE COST PER CONN: R2, 575.00
COST ON AVE: R 1,279,787,875.00

Since the introduction of the Consolidated Infrastructure Municipal Programme (CMIP) six (6) major community lighting projects totalling R8, 82 million have been implemented. These translates to 153 000 beneficiaries, mainly in the rural constituencies of the province. The report on the statistics on crime reflects a perfect correlation between social fabric crimes (including rapes, sexual assaults, child and women abuse) and lack of electricity.

It is the intention of the Department, working closely with the Mineral and Energy Department and ESKOM, to intensify the electrification programme especially in the Bophirima and Kgalagadi areas without neglecting the entire provincial need. In this regard, we are excited with the commitment by Eskom to ensure that the Kgalagadi Area is fully electrified by 2005 and the specific attention is given to the Taung area that currently has a serious electricity backlog.

Our challenge is to ensure that the Eskom's Five Year Plan is compatible with Integrated Development Plans of municipalities, and for that we want to heartily acknowledge Eskom's commitment to this process. In the next three months (by end of September 2004), we must have aligned the planning process synchronising National, Provincial and Municipal planning so as to move together in this regard.

Sanitation

The proportion of households having access to sanitation has also increased although the backlog remains huge. In 1994, 49% of households had access to sanitation and this increased to 63% during the 2003/2004 financial-year. Capital spending in this regard has increased, signifying government's commitment to increasing access to municipal services.

Integrated Development Planning

The IDP process has also evolved and gained momentum over the past years of our democracy. Municipalities started with the land development objectives (LDOs) as tools to streamline development and planning at local level. This signified a departure from the apartheid planning to an integrated way of planning.
The Municipal Systems Act ushered in the new planning regime (IDPs), which mainly seeks to foster municipalities to plan in an integrated way taking consideration of provincial and national policies and programmes.

All municipalities managed to complete their IDPs, albeit at varying times. Our analysis of the current IDPs indicates a significant move away from a purely technical consultant driven process, to a peoples driven development process. The level of consultation with communities, through ward committees was unparalleled. The major task ahead of us is to ensure that the IDPs become living document and instruments to push back the frontiers of poverty.

There is an acknowledgement that provincial and national government would have to come on board to align their plans with the IDPs of each municipality. To this end several attempts are made to foster both vertical and horizontal alignment, and since this is a significant paradigm shift from the old planning regime, it is still taking time for other players to understand both the philosophical and planning rationale behind an Integrated Development Process.

Municipal Infrastructure

Consolidated Municipal Infrastructure Programme

Over the past few years government has done exceptionally well in providing infrastructure to the needy communities.

• Water: R34, 32 million spent, 18 projects completed, 8 rural projects, 310 000 beneficiaries.
  
• Community Lighting: R8, 82 million spent, 6 projects completed, 5 rural projects, 153 000 beneficiaries.
• Solid Waste: R367 thousand spent, 2 rural projects
  
• Internal Municipal Roads: R23, 3 million spent, 14 projects, 5 rural, 323 000 beneficiaries
  
• Storm water: R14, 6 million, 7 projects completed, and 3 rural projects

However, despite all our efforts, our infrastructure backlog remains high in relative terms.

Municipal Infrastructure Grant (MIG)

A new comprehensive infrastructure programme has been established to address the backlog confronting our municipalities. The Municipal Infrastructure Grant is a consolidation grant mechanism whose establishment was approved by Cabinet on the 5th of March 2003. Already the programme is fully operational as from the 2004/05 financial year and incorporates the following previously isolated infrastructure grant programme:

• Consolidated Municipal Infrastructure Grant (DPLG)
  
• Local Economic Development Fund (DPLG)
  
• Water Services Capital Grant (DWAF)
  
• Community Based Public Works Programme (Public Works)
  
• Building for Sports and Recreation Programme (Sports and Recreation: to be phased in later)
  
• Urban Transport Grant (Dot)
  
• National Electrification Programme (LG-to be phased in later)
  
• National Electrification Programme (ESKOM: to be phased in later)

The Municipal Infrastructure Grant programme is aimed at providing all South Africans with at least a basic level of service by the year 2013 through the provision of grant finance (MIG funds) aimed at covering the capital cost of basic infrastructure for the poor. The overall target will be to remove the backlog with regard to access to basic municipal services over a 10-year period.

It is my pleasure to announce that the total allocation to our province for the 2004/2005 financial-year is R317 653 000, 00 broken down between District Councils and local municipalities.

In terms of the current breakdown the allocations to the local government is as follows:
2004/2005 FINANCIAL YEAR

CATEGORY B MUNICIPALITY

Madibeng
Existing commitments CMIP & DWAF projects: 21 117 000
MIG Allocation: 49 197 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 1 968 000

Rustenburg
Existing commitments CMIP & DWAF projects: 18 174 000
MIG Allocation: 55 907 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 2 069 000

Potchefstroom
Existing commitments CMIP & DWAF projects: 6 080 000
MIG Allocation: 9 009 000
PMU Allocation (between 0,5% to 5% of MIG allocation):

Klerksdorp
Existing commitments CMIP & DWAF projects: 12 928 000
MIG Allocation: 30 283 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 1 211 000

CATEGORY C MUNICIPALITY

District

Bojanala Platinum DC
Existing commitments on CMIP and DWAF projects: 36 641 000
MIG Allocation: 57 815 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 2139 000

Central DC
Existing commitments on CMIP and DWAF projects: 43 991 000
MIG Allocation: 57 815 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 2137 000

Bophirima DC
Existing commitments on CMIP and DWAF projects: 34 649 000
MIG Allocation: 40 490 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 1620 000

Southern DC
Existing commitments on CMIP and DWAF projects: 87 48 000
MIG Allocation: 10 197 000
PMU Allocation (between 0,5% to 5% of MIG allocation): 960 000

In order to ensure the successful and sustainable implementation of this comprehensive programme, an amount of R3 553 000-00 has been put aside to cover for the establishment of a Provincial Project Management Capacity for MIG. However, because of its comprehensive nature, the MIG programme also requires that all affected departments should work together to ensure an integrated approach to infrastructure provision and alignment to other programmes of the department where possible.

Housing Facilitation and Development

Honourable Speaker, through trial and error we have made significant inroads towards the eradication of homelessness and degradation through the provisions of low-cost housing to the most needy. Whereas the backlog in 1994 was estimated at 355 000, as we will report in this Address, the cumulative figure of units completed to date represents a significant achievement if we consider the infancy of our democratic order.

Accordingly, the search for our footprints in regard to the progress we have made in the delivery of housing leads us to recall that the beachhead for qualitative movement forward actually lay in the pre-1994 era negotiations. The ultimate milestone was achieved with the Botshabelo Housing Summit (1994) and the signing of the Record of Understanding between government and the Association of Mortgage Lenders.

All these and other processes culminated in the production of the White Paper in 1994.

The White Paper committed government to establish viable and socially sustainable integrated communities conveniently located opportunely in relation to economic opportunities, health and educational and social amenities. This policy was predicated on the desire to redress the historical denial of housing and property rights and the conceptualisation of the homeless and landless as a homogeneous entity, defined by their lack of access to financial resources to enable them to participate in the housing market.

Honourable Speaker, whilst it was the correct resolve of the architects of our system that the de-racialisation of our communities should represent an important contribution to the objective for the creation of sustainable integrated human settlements, we need to intensify our efforts in ensuring that this does not translate into the assimilation of one race by the other. 'Integration' to us must mean a coming together of a people with different cultures, religion and creed, whose interaction organically brings to life a new being, a new life and a new culture. We need to ensure that the integration of societies in racial and cultural terms begins to impact negatively on the apartheid psychology.

Procurement Policy and Economic Empowerment

In the previous address to this august House by my predecessor, it was mentioned that the new housing procurement policy was in its implementation stage. This approach has shifted the obligation for housing to municipalities and makes it obligatory for them to meet certain PDI percentages in the awarding of contracts. Already a significant proportion of our constructors have begun to emerge from the previously disadvantaged communities.

This is necessary to ensure that whilst we correctly concern ourselves with delivery, this is not at the expense of the need for the democratisation of the economy of the country.

Honourable Speaker, in his previous address to this august House at the beginning of the preceding financial year, MEC Africa remarked that the percentage of women contractors had increased to 6.6%, which comprised of 10 housing projects to the value of R 161 million. It is my pleasure to announce that an additional R 26, 6 million (6, 5.8% of R404m) was allocated to women contractors during 2003/ 2004 financial year.

Women in Housing

Beyond the allocation of tenders to women participants in housing projects, we have decided to develop a comprehensive Women in Housing Strategy through which we will be able to determine the extent to which we are making inroads in accessing the economic benefits of the housing sector to our women citizens. Within this Strategy we hope to categorise women participants as constructors, planners, civil engineers, land surveyors, etc. This is because we think that the approach to focus on allocating construction projects is a very limiting one.

Housing delivery and new challenges

Over the preceding ten years, that is, between 1 April 1994 and 31 March 2004, the Department embarked upon the following national housing programmes:

Type of Programme
* Project Linked.
Number of Units: 98 354
* People's Housing Process
Number of Units: 1 112
* Rural Housing.
Number of Units: 9 393
* Individual Subsidies.
Number of Units: 9 872
* Hostel Redevelopment Programme.
Number of Units: 1 155
* Disaster Reconstruction Programme
Number of Units: 616
* Social/ rental/ institutional Housing
Number of Units: 1 052
* DDIS
Number of Units: 538
Total
Number of Units: 122 092

*Table A: Indicates Programme Type and the number of units delivered under each over the ten-year period.

The cumulative total units built during the period 1994 to 2004 is 122 092. At an average household size of 5 persons nearly 244 184 people who had no meaningful shelter in the past were accommodated. We must also remind members that the housing programme does not only convert to shelter for the homeless, but that the concomitant provision of basic services such as reticulated water, sanitation and graded roads contributes meaningfully to the health of our society. These programmes also created temporary employment opportunities and activated the building industry that was dormant in many of the areas in which housing developments were initiated. Housing, by its very nature, also contributes towards establishing stable family units.

Peoples Housing Programme

Innovations in housing culminated in the development of a number of interventions, including the People's Housing Process (PHP). The object of the PHP is to assist the majority of the people, who are mostly poor and most of whom are homeless or inadequately housed, to meet their housing needs. This approach is necessary to assist government to overcome the complex housing backlog in ways that could leapfrog us to reach a confluence of qualitative possibilities offered by the experiences of the first decade of our freedom.

The PHP approach is predicated on the notion that people are both the subject and object of development.
With the level of unemployment at 41%, the PHP seeks to tap into this labour reservoir and expose people to the opportunities accorded by participation in the construction of their own shelter, whilst simultaneously saving on construction costs and accumulating the necessary construction skills. Therefore, the PHP is both a mechanism to house people, whilst empowering communities to become active participants in the development of their living environment. Furthermore, the PHP represents a significant shift from a 'developer-driven' to 'a people-centred' and 'people-driven' development approach.

More importantly, as a province we have elected to take this process further by endorsing the PHP approach in respect of the new 63 housing projects, worth the total budget of R763, 844, 200, that we have now embarked upon. In this instance, municipalities are contracted to act as Developers in the implementation of these projects, whereupon they will provide communities and consumers with the opportunities to construct their own top structures.

In order to ensure the success on this initiative, six Housing Support Centres have been established to enable local communities to create saving schemes from which dwellings are financed. To complement these initiatives, this House should be informed that the province has also secured the services of four (4) Cuban professionals specifically to assist communities with technical aspects related to people's housing process. The presence of the Cuban colleagues is a result of an agreement between the national government and the government of Cuba to support development initiatives in housing.

Social Housing

Another initiative we have seriously considered is the Social Housing Programme. Based on the strength of group or collective action, social housing looks for institutional approach to access, develop and manage affordable housing for low-to-moderate income earners. This embraces a litany of other services that provide community development and empowerment benefits, and promote a lifestyle that is conducive to community living.

The programme is part of a broader intervention to achieve government objective of quality environment, inner-city regeneration, higher density development and the provision of rental housing. In this approach government will provide, through housing institutions, a housing option that excludes immediate individual ownership. By its very nature, social housing is not for the very poor as persons accessing it must secure income, formally or informally, to be able to afford the rental of other periodic payment for accommodation.

As the initial step towards a comprehensive implementation of the programme, the provincial government has commissioned a province-wide need analysis for social housing. Accordingly, the result of this research will assist the provincial government in determining priority areas for the implementation of this approach. Furthermore, the provincial government will spare no effort in its endeavour to support the establishment of Social Housing Institutions that will be charged with the responsibility for project identification.

This notwithstanding, the province has already approved 2100 subsidies and has thus far established the Rebangwe Social Housing Institution to serve the broad communities of Klerksdorp and Potchefstroom. The province will use the experience gained both through Rebangwe and from the province-wide needs analysis for Social Housing to accelerate the establishment of other such institutions.

Anglo-Platinum Initiative

Honourable Speaker, we must also commend efforts by the Rustenburg Municipality, Anglo-Platinum and the Labour unions in their quest to find habitable shelter for Anglo-Plant employees, who despite receiving housing allowances, continue to live in shacks. As we stand before this august House, plans are afoot to establish a Housing Institution that will assist this initiative.

As this House will recall, as government we have remained steadfast in our resolve towards creating and consolidating social partnerships that produces concrete results for reconstruction and development. Accordingly, we will work with Anglo-Plat, Labour unions, Rustenburg municipality and the National Housing Finance Corporation in ensuring that our people are given permanent and habitable shelter.

Needless to say, the cumulative delivery figures during the First Decade of Freedom are captured in Table B below:

Financial Year
1994/97
Houses Completed: 13 720
Cumulative Delivery: -

1997/98
Houses Completed: 15 871
Cumulative Delivery: 28 591

1998/99
Houses Completed: 18 367
46 958

1999/00
Houses Completed: 12 944
Cumulative Delivery: 59 902

2000/01
Houses Completed: 17 609
Cumulative Delivery: 77 511

2002/02
Houses Completed: 17 902
Cumulative Delivery: 94 896

2002/03
Houses Completed: 16 751
Cumulative Delivery: 111 647

2003/04
Houses Completed: 10 445
Cumulative Delivery: 122 092

Total
Cumulative Delivery: 122 092

Table B: Cumulative delivery over the ten-year period.

Over this current financial year, a total budget of R468, 9 million to deliver 15 303 units through 205 Projects in 24 locations. On completion, these houses will put shelter to an average of 61 212 beneficiaries including basic services. To mention but a few, Gasegonyane will construct 1 822 units, Klerksdorp 2 348, Madibeng 1 791, Rustenburg 2 008, Tshwane CBD 4 042, Moses Kotane 456, Mafikeng 237, Setla-Kgobi 62 and 16 other Municipalities in the province. However, Madam Speaker, care must be taken that the current process will be impacted upon once the Housing Strategy requested by the President is submitted for consideration. This strategy will review a series of activities and processes to fast-track delivery. We contend it will have impact since housing delivery is a multi-year programme.

The Rental Housing tribunal

One of the many important developments in the first decade of our freedom in the province was the establishment, in terms of the Rental Housing Act No. 50 of 1999, of the Rental Housing Tribunal. The primary function of this body is to protect both tenants and landlords against unfair practices and to balance the rights and obligations of all parties. In this sense, it is anticipated that the Tribunal will add substantial value in the stabilisation of rental housing.

Already the Tribunal has received a number of complaints that it has accordingly disposed of adroitly. To ensure the accessibility of the Tribunal, provision is made in the Act for the establishment of municipal information officers whose function is to promote the Tribunal. However, extensive awareness campaigns were also embarked upon during the month of October and November 2003 to advertise the institution. Further work will be undertaken during the coming months to ensure that the facility does not become an ivory tower.

North West Housing Corporation

During the past ten years the Corporation contributed substantially in the provision of low-income housing. This ranges from servicing of about 9308 stands to building 5379 RDP houses. However the Corporation has also been beset by serious administrative and management problems. Consequently, in the course of the 2003/2004 financial-year the Department allocated R20 million Grant for a turn-around plan, which, amongst others, also culminated in the appointment of 4 senior managers. Recent developments include a programme to rehabilitate and renovate blocks of flats, changing the face of Theresa House and efficient management of current creditors. The National Housing Finance Corporation for institutional capacity building within the Corporation also provided an additional R10 million Grant.

Last Thursday (17/6/04) a local newspaper reported that the Department intended closing down the Corporation and went on further to make damaging allegations of the ANC's betrayal to the Mafikeng populous who voted for jobs and now are to face retrenchment. I find this disturbing and a clear misinformation to the public. Later that day I had an opportunity to meet with a delegation of the South African Municipal Workers Union (SAMWU) who accepted our explanation and challenges we faced with the Corporation.

However, what is the factual situation? The Corporation experiences very deep sited and difficult problems associated with serious financial and administrative challenges requiring urgent review. On Monday 14th June 2004 the Department converged at an Executive Management Strategic Planning Session in Rustenburg to consider marching orders from the Principals and review of the department's ability to meet these challenges. Equally, the Corporation could not be left out in this review as part of the department. Clearly, what constitute an internal process of formulating ideas was mischievously leaked to the media to confuse the issue. The matter has not yet matured to external debate. It will be brought to the public over the next three months once internal processes have been completed.

The Corporation is envisaging the transition into the Housing Infrastructure and Delivery Company (HIDCO), which matter, will be placed before the Executive Council for consideration. The transition will require a repeal of the North West Housing Corporation Act. Three new business units focussing on home loan finance, property development and management respectively will be established within the next financial year.

Integrated Planning

Integrated Development Planning and Housing

The development and maturity of the local government sphere in the light of its significance in respect of its coordination and alignment of programmes within their jurisdiction is of cardinal importance for housing. The developmental responsibilities of municipalities in respect of housing, and the multipurpose functions served by housing itself through job creation, shelter, health improvement and black economic empowerment, makes it necessary that the provincial government ensure a truly efficient local government sphere that is genuinely accountable, effective and plays a pivotal role in the fight against poverty, ensuring equity in the provision of essential services and enthusiastically promoting social and economic development.

The IDPs will serve as important integrative and co-ordinating instruments for intergovernmental and inter-departmental services rendered within the jurisdiction of the respective municipalities. As a lead developmental sector, housing will stimulate the local economy by boosting aggregate demand, whilst simultaneously reconstructing localities under the rubric of economic and spatial integration. In this instance, housing becomes an integral part of the municipal IDP as a critical component in both municipal local economic strategy and its infrastructure plan.

Land Use and Spatial Planning

We must also report that the Spatial Planning and Land Use Management Systems have undergone major changes from Apartheid-based systems to new effective and efficient system based on sound principles. The Development Facilitation Act No. 67 of 1995 was the first piece of democratic legislation promulgated in this regard.

Honourable Speaker, as this House may be aware, processes are under way to finalise the Land Use Management Bill (LUMB) by the national Department of Land Affairs. The LUMB will be the foundation for further provincial planning legislative reform.
It places land use regulation firmly in the hands of municipalities with planning decisions made at the local level.

Provincial Spatial Development Framework

The Provincial Spatial Development Framework, which will interface with and provide guidelines for municipal spatial development frameworks, is in the final stages of development. Important components of this plan include the Provincial Zoning Plan and Guidelines for municipal Land Use Management Schemes.

Honourable Speaker, this House may be aware, development control processes are also being streamlined by the creation of an Integrated Environmental Management System for the province. The aim of is to create a one-stop-shop where all planning permissions and environmental authorisations can be considered by relevant authorities. This process is driven by the Department of Agriculture, Conservation and Environment.

Housing Challenges

Our successes notwithstanding, the delivery of housing has not been as expeditiously as we anticipated. Among a plethora of other challenges, government confronted four challenges of a strategic nature. (1) Firstly, the difficulties encountered in ensuring the alignment of housing delivery to other services within the municipal Integrated Development Plans, posed problems of its own in relation to integration at municipal level. However, the Department is working on strengthening its monitoring capacity to ensure that all housing projects are approved on the basis that they are consistent with the Integrated Development Plans of the relevant municipalities. Already, we can confirm that the new 63 projects to which we earlier referred are consistent with the IDPs of the respective municipalities.

(2) The second challenge relates to the lack of substantive capacity for project and contract management at local government level. Because housing is considered to be a national and provincial concurrency, many of our municipalities do not have dedicated capacities to oversee the implementation of housing projects and contracts. This has often resulted in underperformance by contractors, and hence the perennial complaints by consumers regarding the quality of houses.

Accordingly, government will undertake an audit of the quality of all housing projects undertaken within the province since 1994. In essence the object is to determine the durability of some of these houses, whilst simultaneously trying to establish liability for construction defects. In the final analysis, as government, we will like to determine as to which of the constructors has given our people raw deals, and accordingly terminate all further interaction with them. In this instance, we want to ensure that ours becomes neither an old advance nor a new retreat.

The (3) third challenge relates to the accessibility of suitable land for development. Whereas the mandate of the democratic government is to establish viable, economically and socially integrated communities situated in areas allowing for convenient access to economic opportunities as well as health, educational and social amenities, the absence of suitably located state land to enable government to make deliberate interventions to reverse apartheid settlement patterns has inhibited government efforts in this regard. In a more consistent and sustained way, the provincial government will have to work closely with the other spheres of government to overcome this challenge.

(4) Fourth, according to the 2003 Intergovernmental Fiscal Review released by National Treasury, a critical policy challenge for housing is "to facilitate appropriate devolution of functions to. local government sphere, while at the same time ensuring that ... processes and policies essential to a sustainable housing development are in place" (p-160).

Whilst we share this view, we are also of the opinion that in the interim, the New Procurement Policy to which we earlier referred, goes a long way towards allocating responsibility for housing delivery to the local government.

HIV/AIDS

Managing the impact of HIV/AIDS remains a challenge to the Department. The Department's HIV/AIDS Prevention programme is ongoing, however there is a need to accelerate the HIV/AIDS Education and Training programme to provide employees with information that will empower them as individuals to respond appropriately to challenges posed by the scourge.

The external programme focuses on forming partnerships with Municipalities, fellow Departments, Private Sector and NGOs in an attempt to fight the HIV/AIDS pandemic. The previous year we formed partnership with ESKOM and the Department of Health in supporting the Lomanyaneng Home Based Care Centre. The Department donated money and building material for renovation of the Centre. The demand for such centres is very high not only in the Central District Council but also in other District Councils, therefore the Department will embark on forming partnerships within the constraint of budget.

Batho Pele

The Department is in the process of reviewing its Service Delivery Improvement Plan with the intension of ensuring that our service standards meet the expectations of our customers. The process entails quite an extensive consultation with key stakeholders and clients. The process will therefore take not longer than two months to complete.

Budget Matters

For the second year running, the department attained an unqualified audit report. This is a result of our training efforts, which involved officials across the department on financial management, as well as the commitment of all our staff. One of the key challenges we face is to restructure our finance component to meet the challenges of the new procurement regime. With the kind of dedication our staff has, I am confident that we will meet this challenge.

In conclusion, I wish to thank the people of the North West for the confidence displayed in the ANC by its overwhelming vote of confidence, the Premier of the North West for her trust and confidence in me ... I will serve with dedication and commitment for I am associated with a winning team. My wife Shirley, my girls and only boy thank you for your support and love!

To the HOD - Mr I Motala and your competent team of Managers and Staff, we have a job to do let's get down to work! "Failure is not an option!"

I thank you!

BUDGET BREAKDOWN

Programme 1: Administration
Sub-programme: Amount: (R'000)
1. Human Resource Management: 19 191
2. Finance: 11 879
3. Constitutional and Legal Matters: 3 193
4. Ministry: 2 982
5. Communication: 2 121
Total: 39 366

Programme 2: Developmental Local Government
1. Local Government Finance and Monitoring: 17 215
2. Local Government Capacity Building: 27 591
3. Local Government Support Grant: 14 550
4. Infrastructure Grant: 15 153
Total: 74 509

Programme 3: Housing
1. Chief Directorate Housing Delivery: 1 700
2. Chief Directorate Housing Facilitation: 1 740
3. Resources and Systems: 9 561
4. Project Implementation and Programme Development: 7 828
5. Monitoring, Capacity Building and Quality Control: 9 856
6. Policy, Planning and Evaluation: 6 520
7. Housing Fund: 421 378
8. Human Resettlement Redevelopment: 8 480
9. CMIP: 2 439
Total: 469 502
Grand total: 583 377

Issued by: Department of Local Government & Housing, North West Provincial Government
24 June 2004