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21 June 2006

Honourable Speaker and Deputy Speaker,
Honourable Premier,
Honourable members of the Executive Council,
Members of the legislature,
Distinguished guests,
Ladies and gentlemen:

The outcome of the recent local government elections which were declared free and fair with a remarkable voter turnout of 48,4 percent compared to the previous election, has demonstrated once again the willingness of the people of this country to participate in the affairs of the local government sphere. As a province we had the second highest voter turnout in the country and the ruling party had been given a clear mandate through us taking control of all the municipalities. Such a positive indication gives all of us in government a renewed energy towards ensuring more effective service delivery in this term of local government because we have the confidence of the citizens in developmental local government.

To improve our performance as government and as a nation, government has identified two major interventions to create the conditions to achieve more rapid progress toward the realisation of the constitutional rights of our people. One of the initiatives, Accelerated and Shared Growth Initiative for South Africa (AsgiSA), our national effort for faster and shared growth we believe are known to all of you. The intention is to move faster to address the challenges of poverty, underdevelopment and the marginalisation of the poor. While AsgiSA will contribute to speed up progress towards faster growth and development of at least six percent per year, it will also ensure that our social development programmes are sustained and improved to support those most exposed to poverty.

The second most important intervention is the programme to strengthen local government. We will elaborate more on this at a later stage.

The total budget allocation of the Department for this financial year is R260,680 million. This is an increase of six percent or R51,683 million from the 2005/06 allocation of R208,997 million. This budget will be divided amongst the three programmes in the Department. Programme one which is responsible for administration will receive R30,625 million, the housing programme will receive R123,178 million of which R104 million is for housing delivery and finally the local government programme will receive R106,877 million.

Madam Speaker, housing remains one of the greatest challenges government is faced with. The extent of the challenge derives from the size of the housing backlog and the desperation and impatience of the poor and homeless. The Department of Housing and Local Government by way of the goals of the provincial government continues to work through these challenges whilst endeavouring to alleviate the pressures of the housing environment.

Achieving sound delivery in the housing process over the past 12 years was not always easy. The Department was able to provide a substantial number of houses through intensive capacity building programmes, which took place across the province resulting in an increase in the skills base for housing development.

Now that the delivery of housing is in full swing in the province there are unfortunately not sufficient funds to meet the total housing needs in the Northern Cape. New legislation and policy changes has placed an added burden on the Department and municipalities in the province thus making the planning, implementation, monitoring and evaluation of housing programmes more difficult in the province.

The Northern Cape has received R104 million from the national allocation for the 2006/07 financial year for housing development. This is an increase of R11 million from the Medium Term Expenditure Framework (MTEF) projection. In light of this, the province is planning to build 2001 houses for the year. Of these 654 houses will be delivered on current running projects, 874 houses will be delivered on blocked projects while 473 houses will come from new projects. A total number of 1 060 new sites will be planned and serviced in the Northern Cape.

This budget allocation is noble but not adequate if compared with real facts which will add a new dimension to the problem we are faced with in housing development. The Department cannot initiate any new projects in the Northern Cape. This budget will mostly be used to unblock and complete some of the blocked projects as well as complete some of the running projects which were initiated towards the end of the 2003/04 financial year.

In terms of the Breaking New Ground in Housing delivery strategy, the Northern Cape has identified two pilot projects. These being Lerato Park in Kimberley and Ou Boks in Colesberg, in terms of the upgrading of informal settlements programme. In Lerato Park, located in the Sol Plaatje Municipality the 2005/06 budget allocation of R2,5 million for this project was used mainly for the planning processes. The geo-technical investigation and the environmental impact assessment process have also been completed. The town planning process is currently going through final approval. An additional R6 million has been allocated in the 2006/07 financial year. This money will be used for the installation of services in the area.

The project in Ou Boks in the Umsobomvu Municipality caters for 2 000 sites. The consultant appointed as project manager will submit the business plan by the end of this month. To date the socio-economic and demographic survey of existing services and determining of flood lines have been completed. The town planning, environmental impact assessment, geo-technical survey and traffic study are in progress.

Allow me to elaborate briefly where this notion of blocked projects stems from. In the Northern Cape a larger product was ensured by setting a minimum house size of 36 sq m whilst the Department of Housing laid down 32 sq m as a minimum house size at a national level. Nevertheless the province has succeeded in delivering houses as large as 54 sq m because the Department is focused on providing decent houses for the people.

This, however, has created high expectations amongst the people who sought to benefit from the subsidy scheme. The poor expect bigger houses but in reality the subsidy can only provide a basic liveable structure with the most basic services.

This tension in policy development continued into a delivery practice with various attempts to increase the size of the house, because beneficiaries wanted the biggest structures they could get. This made it difficult and impossible for the developers to sustain the housing projects causing a number of these to come to a complete standstill.

These incidents occurred because key factors such as the location, fluctuating input prices and distances were not considered enough when developers were encouraged to build bigger houses. These factors together with a number of other related problems have caused the downfall and financial ruin of many developers and contractors in the province. As a result many projects were stopped or abandoned by the developers and have not shown any progress in long a time. These are the projects we refer to as “blocked projects”.

Other factors which have affected the delivery of houses were policy changes. A number of Small, Medium and Micro Enterprises (SMMEs) were appointed to manage projects but their lack of proper project management skills has caused delays on some projects not forgetting community conflict.

Housing has also experienced budget shortfalls and cash flow problems which has been a major cause of most projects coming to a complete standstill.

Madam Speaker, we have instances where contractors also defaulted on some of the projects and in many cases left projects incomplete whilst still owing the Department money. The Department is still busy with legal processes against some defaulting contractors. The legal action against contractors is separated from the completion of the projects. This process is currently ongoing and the State Attorney’s Office is also involved. Municipalities and the Department have jointly looked at ways to secure funding for the completion of the affected projects.

The Department is currently looking at ways to evaluate contractors currently working on housing projects on a regular basis. A database will be established and the track record of contractors will be documented. This will assist the Department and the municipalities in the appointment of credible contractors. It will assist contractors in identifying shortcomings and possible interventions, as part of their own capacity building for housing delivery.

The process to unblock and complete all blocked projects only in the 2006/07 financial year, will require an additional budget of no less than R154,829 million. The allocation of R104 million will be inadequate and is therefore not sufficient to fund all the housing projects. In terms of national policy all blocked projects must be completed by 31 March 2008.

It is therefore critical that additional funds be sourced for the 2006/07 financial year in order to prevent a further disruption in the implementation of the housing programme in the Northern Cape in the ensuing financial years.

The Department is also grateful for the additional R20 million received from the Provincial Treasury during the 2005 budget adjustments in order to unblock some of the blocked projects and to complete outstanding houses and services on other unfinished projects. The additional allocation enabled the Department to unblock a further eight blocked projects and to allocate funding to nine running projects with limited funds. Houses and services are currently under construction on all these projects and it is planned to complete 470 houses and services to 390 households.

The Department has approached Thubelisha Homes to assist with the unblocking and completion of blocked projects in the Pixley ka Seme Region. Thubelisha Homes is a National Housing Institution that was established by the Minister of Housing and is also reporting directly to the Minister of Housing. The Department is thus in the final stages of concluding its arrangement with Thubelisha Homes.

Madam Speaker, the province has a housing backlog of approximately 40 000 housing units and this total is constantly increasing as a result of an increase in the number of households in the province. In terms of the objectives of the Provincial Growth and Development Strategy (PGDS) this backlog must be eradicated completely by not later than 2014. This is also in line with the national target in terms of Breaking New Ground (BNG) and the Millennium Development Goals (MDGs).

At the current pace of delivery in the Northern Cape as well as the funding to the province, it will virtually be impossible to eradicate the backlog by 2014. The stakeholders involved in the housing process were therefore called upon to assist with the fast tracking of housing delivery in the province.

A social contract was entered into between government and the private sector, wherein all the parties committed themselves to the Northern Cape Social Contract for the Rapid Delivery of Good Quality Houses that translates their goodwill into practical co-operation with common objectives. This historic event has taken the form of a half-day workshop, whereby government and each sector represented in the housing delivery value chain has signed the Northern Cape Social Contract for Rapid Delivery of Good Quality Housing as a commitment to “Breaking New Ground” in housing delivery and to achieve through a collective initiative housing for all by 2014.

The key role players in the delivery of housing were drawn from national, provincial and local government, Financial Institutions (FIs), Housing Institutions (His), the built environment consisting of developers, contractors, material manufacturers and suppliers, consulting engineers, town planners and conveyances and the non-governmental organisations (NGOs) and community-based organisations (CBOs) from the various civil society organisations.

We believe therefore that “through our diversity of talents and cultures, we will harness our tremendous human and other resources to accelerate housing delivery to improve the lives of thousands of our poor by building sustainable livelihoods, communities and human settlements, providing a choice of quality housing opportunities with secure environments and access to water and proper sanitation for all.”

Madam Speaker, the Housing Act of 1997 (Act 107 of 1997) stipulates a new and important role for municipalities in the housing process. Local government the sphere of government closest to the people is responsible for the social and economic well being of the people within its area of jurisdiction. It must therefore be at the forefront of housing delivery.

While the Department of Housing and Local Government is responsible for the determination of housing policy to facilitate the provision of adequate housing in the Northern Cape it is equally important that provincial government support and strengthen municipalities to manage in the delivery process.

The province as part of its New Comprehensive Plan (NCP) has begun a process to accredit competent municipalities to administer national housing programmes. Current plans call for the Housing Department to embark on a 10 year phased approach towards the accreditation of South Africa’s full compliment of municipalities. Accreditation seeks to achieve two interlinked objectives which are co-ordinated human settlement development and accelerated housing delivery. In order to be accredited, municipalities will have to demonstrate their capacity to plan, implement and maintain both projects and programmes.

Due to the lack of municipal capacity and the vast distances between towns in the Northern Cape, the Department targeted the five district municipalities (Frances Baard, Pixley Ka Seme, Kgalagadi, Siyanda and Namaqua) as well as the Sol Plaatje, Emthanjeni and Khara Hais local municipalities for accreditation.

The Department of Housing is regarding the accreditation of the district municipalities as a pilot for the country. The legal framework to formalise the housing mandate for district municipalities will be finalised during this Medium Term Expenditure Framework (MTEF) period.

The Department of Housing and Local Government officially launched the Municipal Accreditation Programme (MAP) in February of this year. We are the first province to have completed the municipal assessment process and submitted business plans to the national Department. The next phase will be to capacitate municipalities to move to first and second level accreditation within the next two years.

Although the housing process is not an easy one, this does not prevent the Department from establishing good relations with other spheres of government in our endeavour to promote easier access to service delivery for our communities. It is therefore also heart warming. We want to make use of this opportunity to thank Ms Elizabeth Waterboer of Pofadder for the encouraging gesture she made recently at the Presidential Imbizo when she stated that she is grateful that after waiting 12 years for a house, she never lost hope and nor should the other people because the African National Congress (ANC) government is committed towards changing the lives of the citizens of this country.

Madam Speaker, we have just completed the first term of democratic local government and a number of findings were made during the Local Government Review Process (LGRP) for the first term. The main findings that have emerged from this review in terms of the performance of municipalities are poor capacity and inadequate accountability mechanisms.

It is therefore necessary in this current term of local government that we work towards a more sustainable system and a general improvement in the capacity and functionality of municipalities and their ability to deliver reliable services to the communities that they serve.

Whilst it is the responsibility of the Department of Housing and Local Government to monitor, guide and support municipalities to achieve their constitutional and developmental mandate it has become clear that the whole of government has a role to play in achieving sustainability and reliable service delivery at municipal level.

The plan to strengthen local government has been developed and approved and released in March this year called the Five Year Strategic Agenda for Local Government. Project Consolidate as we know it has been main-streamed into the Five Year Strategic Agenda and all municipalities will be part of this process as opposed to a few.

This strategic agenda defines three overarching Strategic Priorities and Five Key Performance Areas that will be implemented in the next five years to improve local governance.

The three strategic priorities are:

* mainstreaming hands on support to local government to improve municipal governance, performance and accountability (previous Project Consolidate focus)
* addressing the structure and governance arrangements of the State in order to better strengthen, support and monitor local government
* refining and strengthening the policy, regulatory and fiscal environment for local government and giving greater attention to the enforcement measures.

These strategic priorities culminate in the following five Key Performance Areas (KPA):

* municipal transformation and institutional development
* basic service delivery
* local economic development
* municipal financial viability and management
* good governance and public participation.

This strategic agenda introduces measures to address the differential capacities of municipalities. It also focuses on time-bound outcomes and emphasises the role of both national and provincial governments. Lastly it enforces monitoring and evaluation mechanisms.

In the province we have since April 2006, facilitated a process of Municipal IDP analyses including sector departments as part of the analysis. We also facilitated a provincial IDP engagement process, where we have engaged as provincial and national sector departments with municipalities to put in motion a process of feedback, support and concrete resources to facilitate more credible IDPs. This IDP engagement process will be an annual process. It provides a platform for national and provincial government to engage with municipalities in the planning, alignment and harmonisation processes in meeting the priority needs of communities and meeting the targets of government as espoused in the Government’s Programme of Action, the National Spatial Development Perspective (NSDP) and the Provincial Growth and Development Strategy (PGDS). Through this engagement we have seen strengthening in intergovernmental relations. The engagement and it demonstrates the interdependency of the spheres of government as espoused by the Constitution of the Republic of South Africa to implement Government’s Programme of Action.

This Five Year Strategic Agenda harnesses the Support of Stakeholders in the local government sector, as we are very clear “that government cannot do it alone.”

To this end Madam Speaker, support to the elected political leadership will be intensified through structured programmes of training and capacity building; bringing stability to the political and administrative components of municipalities and providing a process to unblock bottlenecks that adversely affects the delivery of services at municipal level, through our partnership with South African Local Government Association (SALGA) - Northern Cape.

In this financial year the Department will support municipalities who lack the core basic municipal systems to function as effective local government structures. This will include the implementation of a competency framework that will regulate the appointment, performance and evaluation of municipal managers and senior managers. Prioritise more effective Performance Management Systems (PMS), including the signing of performance agreements for section 57 managers, which relates to the IDPs. The Department will be supporting municipalities to fill vacant municipal and senior manager posts.

We need to in the process, look at retaining continuity and stability at an administrative level especially as many section 57 managers’ contracts will come to an end in this financial year.

There are a number of national targets as set out in the PGDS in terms of meeting basic service delivery and unless we have the resources both human and financial we will not meet these targets. With regard to meeting these national targets, we can however report that as a province the Northern Cape has made good strides and are on track to meet these targets. The province has an electricity backlog of 56 628 households. With regard to meeting the 2012 target of universal access, the Northern Cape is one of two provinces that can meet the target in four years by 2009/10. About 90 percent of households will have at least a basic water supply in respect of a distance of 200 m from their homes. A total of 25 899 households are without a basic water supply. Basic sanitation is supplied to 73 percent of all households in the province. A total of about 73 892 households are still without basic sanitation. In order to achieve these targets for access household water and basic sanitation an integrated approach is needs to include housing projects that should reach new needy households namely household growth. The Municipal Infrastructure Grant (MIG) needs to address the current backlog and district municipalities must supplement the funding.

Through the support of the organised engineering fraternity namely the South African Institute of Civil Engineers (SAICE) and the South African Association of Consulting Engineers (SAACE), engineering capacity has been provided at the Frances Baard District Municipality to support those category B municipalities in their jurisdiction who lack capacity in this field to be able to implement and oversee service delivery.

We are in the process of engaging this fraternity to provide this expertise to other district municipalities and in order for them to assist the local municipalities and to oversee their deployment.

The Municipal Infrastructure Grant (MIG) is progressing well although logistical problems are still being encountered to capacitate the district municipalities and municipalities to register and implement their projects.

This programme remains a key part of government's overall drive to alleviate poverty in the country and provide infrastructure in such a way that employment is maximised and opportunities are created for enterprises to flourish.

The main focus of the MIG programme is still to ensure that all basic municipal infrastructure backlogs have been addressed at the end of the 10-year period and that municipalities would have been capacitated to the extent to be in a position to operate, maintain and sustain the entire infrastructure services that have been provided.

A total of R130,922 million has been allocated to the Northern Cape for the 2006/07 financial year. The following amounts have been allocated to each district:

Kgalagadi District - R33,056 million
Namakwa district - R16,460 million
Pixley Ka Seme District - R34,042 million
Siyanda District - R16,027 million
Frances Baard district - R31,337 million

As it is government’s policy to eradicate all buckets, MIG has allocated funds direct to the municipalities to eradicate their buckets. In total 11 municipalities in the Northern Cape will be receiving funds this financial year (2006/2007) to the value of R31,061 million to eradicate buckets. An additional amount of R21,2 million has been allocated from the Provincial Infrastructure Grant (PIG) for the eradication of buckets which means a total of amount of R52,261 million for 2006/07. Although we are on track with the eradication of buckets programme with the current MTEF allocations, we will need additional funding to meet the 2007 target for the eradication of buckets.

Madam Speaker, the Department along with the Department of Water Affairs, SALGA NC, Frances Baard District Municipality and Swedish International Development Agency (SIDA), started the operation and maintenance project in August 2004 and has made considerable progress. This initiative was started after it became apparent that some of our municipalities are struggling to ensure optimum delivery of municipal services in a sustainable manner to its consumers. This project seeks to develop amongst other things the following five handbooks:

* Water Supply Services
* Sanitation Supply Services
* Roads, Streets and Storm Water
* Legal and Environment
* Management (addressing both strategic and operational aspects of management).

We are actively involving staff from our municipalities during the compilation and testing phase of these handbooks. This we believe will ensure ownership right from the outset. We have therefore included a number of municipal officials to participate in this process.

Madam Speaker, the Northern Cape has a great challenge when it comes to disaster management, a discipline that is not clearly understood by all yet the success of disaster management lies in integration, participation and communication by all local government stakeholders.

The Department of Housing and Local Government has placed special emphasis on ensuring that disaster management attains its rightful place within our province. This task is not without its share of challenge but we are confident that with the required resources, those within the disaster management fraternity will be more than able to rise to this challenge.

The current financial year will see significant progress being made starting with the establishment of the Provincial Disaster Management Centre. This will allow us to better fulfil the role and responsibilities of the province with regards to disaster management. An amount of R1 344 000, 00 has been dedicated for this purpose legal compliance to the Disaster Management Act, Act 57 of 2002 is one of our main objectives and we will continue to pursue the implementation of the Act to its fullest.

The conditional grants to support district municipalities with regards to the National Emergency Alarm Radio (NEAR) communication system will still continue this financial year. The total amount of this conditional grant is R2,968 million.

District municipalities will also again receive a conditional grant towards fire fighting equipment, the total amounting to R2,904 million.

We are in partnership with the Department of Economic Affairs to improve local economic development. The Department of Economic Affairs will be the lead Department in this Key Performance Area (KPA) and the Department of Housing and Local Government will provide a co-ordinating and support role. All districts will in this financial year have to convene District Growth and Development Summits and begin a process of drafting implementable LED strategies. All of these will have to be aligned to the National Spatial Development Perspective (NSDP), the PGDS and the AsgiSA.

The municipalities of Siyancuma, Kamiesberg and Moshaweng will benefit from the “Siyenza Manje” Programme of the Development Bank of Southern Africa (DBSA). They will be receiving support in strengthening financial management capacity and the experts will be deployed by 1 July this year.

We are in the process of engaging the DBSA to increase their support to other targeted municipalities in the province, when they deploy their next round of experts in December 2006.

The Department has entered into a Memorandum of Understanding (MoU) with Provincial Treasury to implement the Municipal Finance Management Act (MFMA). This MoU includes monitoring, support and interventions to improve the accountability for public resources.

The Department will monitor the compliance of all municipalities in terms of submitting credible Annual Financial Statements on time to the Auditor-General’s (AG) office and where necessary facilitate the required support. It will also be important that the Department should developing effective evaluation and monitoring system to serve as an early warning on municipalities with serious financial problems.

In terms of implementing good governance and public participation, the Department together with the Planning, Implementation Management Support and Services (PIMMS) centres of district municipalities will facilitate the re-election of Ward Committees (WC) and co-ordinate a training programme aimed at making ward committees more functional. It can be reported that ward committee manuals have been developed for this purpose. The people residing in the Renosterberg Municipality will also participate in the ward committee programme for the first time this year.

A total of 187 Community Development Workers (CDWs) have been appointed as from October 2005. Currently an additional 133 CDWs are being trained for deployment in this financial year. We will be looking at refining the accountability mechanisms for CDWs in this financial year to be able to maximise the important work of bringing government services closer to the people.

The public participation processes towards good governance will be closely monitored. We will support the offices of the speaker at municipal level to develop an implementation programme for community participation. Good governance depends on participation of the community and is a cornerstone of our democracy.

During October 2004, Cabinet officially approved the organisational structure of the Department. As a result of the approval the recruitment process ensued which saw the Department filling vacancies in most units thereby capacitating the respective programmes. The Department is proud to announce that we have appointed most of the learners and interns whose contracts were terminated with the local government and water related Sectoral Education and Training Authority (SETA). We pride ourselves in the fact that our employment equity status is improving at the senior management level. The Chief Director for Housing has been appointed 1 June 2006 and she is a woman. The Department received an unqualified report for the 2004/05 financial year and hope to achieve the same result for the 2005/06 financial year and at the same strive for the same result in the 2006/07 financial year.

In May 2006 the Department received a gold award from the Professional Management Review (PMR) Business Magazine in recognition of being the only Department in the province, which strives very hard to achieve its strategic objectives. The Department is also engaged in a number of crosscutting governance activities. These being the implementation of the Intergovernmental Relations Framework (IGR) Act, the African Peer Review Mechanism (APRM) process and the disestablishment of the cross boundary municipalities. These activities put additional pressure on the already limited human resources of the Department.

The disestablishment of cross-boundary municipalities, the employment of 187 CDWs, the implementation of the Five Year Strategic Agenda for Local Government and the Breaking New Ground in Housing Delivery pose new and additional responsibilities to our Department and especially corporate services as far as the extension of provision of administrative support is concerned. The Department is therefore currently busy to re-align our organisational structure to be able to meet the new challenges.

In conclusion Madam Speaker,

These strategic priorities and interventions that the Department are setting in place are designed to strengthen municipalities in order that they may fulfil their constitutional and developmental mandate. We trust that indeed the entire government, together with our strategic partners will lend support to the implementation of the Five Year Strategic Agenda of Local Government and our Breaking New Ground in Housing Delivery Strategy, in order that the people we serve may indeed experience a better life and that we will indeed proclaim the next five years as an ‘Age of Hope’.

In conclusion, allow us to thank and express our sincere gratitude to the Premier for her continued guidance and leadership and also members of the Executive, the Chairperson and members of the Portfolio Committee, all the councillors, municipal officials; our strategic partners in local government namely SALGA NC, the DBSA, Thubelisha Homes, NHBRC, the South African Institute of Civil Engineers and the South African Association of Consulting Engineers; the trade unions and our communities for striving so hard to make developmental local government work in this province. We also want to extend a word of gratitude to the Department of Housing, the Department of Provincial and Local Government and the Department of Water Affairs. Lastly let us thank the officials of the Ministry and the Department for the unwavering determination in improving the lives of our people.

I thank you!

Issued by: Department of Housing and Local Government, Northern Cape Provincial Government
21 June 2006