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MEDIA BRIEFING REMARKS BY HOUSING
MINISTER, LINDIWE SISULU ON THE
OCCASION OF THE 2006/2007 BUDGET
VOTE STATEMENT, MAY 24, 2006, IMBIZO
MEDIA BRIEFING ROOM, PARLIAMENT,
CAPE TOWN
Greetings to Members of the Media,
Let me start by thanking you for
joining us this morning. I will
briefly share with you highlights of
our Budget Vote Statement to be
delivered later today. I think it is
appropriate for me to formally
introduce our brand new
Director-General, I think his task
is very clear, he will have to
ensure that we eradicate informal
settlements by 2014.
I am more than convinced today as we
prepare to deliver this Budget Vote
Statement for the financial year
2006/2007 that our response to the
task of decently housing the poor
can only be adequately measured by
the amount of resources the
government has been appropriating
and spending on the vote in the
three years before 2005/06 and what
is estimated for spending in the
next three financial years.
Looking back, our expenditure has
doubled from R4.2billion from
2002/03 to R9.5billion in the
2008/09 financial year. This
reflects approximately 8% average
growth rate from 2002/03 to 2005/06
financial year and accelerating to
21.5% from 2005/06 to 2008/09.
The Housing and Human Settlement
Development Grant, representing
transfers to provinces has
consistently taken about 93% of the
total expenditure on the Vote.
Expenditure on the Housing and Human
Settlement Development Grant will
increase from R4.97 billion in the
2005/06 financial year to an amount
of R8.7 billion in the 2008/09
financial year.
While this increase is indeed
remarkable, the enormity of the
challenge, depicted by the backlog
and the annual house hold growth,
still remains large. The 2005/06
financial year, the year in which we
started implementing the
comprehensive plan for human
settlement, has seen for the first
time expenditure on the Housing and
Human Settlement Development Grant
reaching 95%, with actual delivery
standing at 115 175 sites completed
and 137 657 units completed. We
certainly want to grow this delivery
significantly if we are to meet our
international and national targets
on eradication of informal
settlements in our society.
In an effort to fast track housing
delivery to achieve both our
national and international
commitments we have begun an
all-important process to review the
housing delivery value-chain and
functions performed by various
role-players. This process has
enabled us to fully appreciate the
specific location and nature of
problems and bottlenecks that
persistently hamper housing
development.
Our biggest challenge is the
management of the concurrency of the
housing function, development
planning, project management, and
alignments of funding sources,
limitations of bulk infrastructure
and the overall capacity limitations
of the construction sector as it
relates to housing development.
The remodeling of the housing
delivery value chain is enabling us
to correctly locate and focus the
capacity required for delivery as
well as remove, more permanently,
the bottlenecks that hamper housing
delivery. As a consequence of this,
the housing sector departments
across the three spheres of
government will need to realign
their organizational structures to
maximize on the efficiencies
expected of the value chain.
Broadening access to housing for all
One of the issues that rightfully
dominated the media agenda in this
financial year is our Memorandum of
Understanding with the Banks in
which they committed to release R42
Billion by March 2008. I can
announce here today that our
negotiations with major banks as
represented by the Banking
Association have been concluded. The
Director-General of Housing,
representing Government and the
Managing Director of the Banking
Association of South Africa,
representing the banking sector will
monitor the implementation of this
agreement (R42 Billion) and begin
discussions on the release of more
resources for affordable housing
over the next few years.
We agreed that as part of the second
stage of discussions to release a
second batch into the market, we
will consider interventions that
will, together with the private
sector and in line with agreed
principles, support the creation of
mechanisms to raise funds in the
market and ways to share risk and
mitigate non-commercial risk.
We agreed that as part of this
second stage, We will also lead
engagement with other relevant
stakeholders to address constraints
on the supply-side of the housing
market, to ensure the availability
of housing stock to be financed. A
critical part of this engagement
will be with the construction and
development sectors and mechanisms
will be developed to engage these
sectors with a view to ensuring
their active participation in this
initiative.
In addition that both banks and
government will, within the next 8
weeks, embark on a vigorous joint
media education campaign on the
rights and obligations of borrowers
and banks.
IMPLEMENTING THE SOCIAL CONTRACT FOR
RAPID HOUSING DELIVERY
The first Plenary Assembly of the
Social Contract which was held on
15 March 2006 to look at issues such
as development planning, land and
legal matters, delivery, consumer
education, capacity building and
communication, development planning,
supply chain. All signatories
continue to be guided by the
principles of the Social Contract in
their contribution to the Government
Housing Programme.
We have noted with great
appreciation that a number of
developers in our major cities are
beginning to embrace the principle
of integration of different income
levels. The recent SAPOA conference
also recommitted itself to working
with the Government to address the
shortage of housing stock and
integration of communities.
Guided by the spirit of Breaking New
Ground, Individually banks have
initiated a number of projects to
increase affordable housing stock in
the market. ABSA is involved in the
development at Olievenhoutbosch in
Gauteng of 5 436 housing units. The
project was launched in February
this year. The development makes
provision for business sites,
commercial sites, churches, schools,
crθches as well as open spaces.
First National Bank has its own
project at Protea Glen in Soweto
where it will provide R300 million
in the form of bridging finance to
the developer for the development of
3 035 housing units. Standard Bank
has set aside R500 million is set
aside for end user finance.
Within the context of the Social
Contract Radio 702 has also
committed itself to build 702 houses
in Cosmo City for this year, again
in partnership with First National
Bank. I challenge all media houses
to build a minimum of five houses in
this financial year.
N2 GATEWAY PILOT PROJECT
All spheres of Government and
stakeholders in the construction
sector agree that the N2 Gateway
Project is the biggest housing
project ever undertaken by any
Government. We also agree that there
was no better place to pilot the
implementation of the Breaking New
Ground policy than the City of Cape
Town.
On the N2 Gateway we are piloting
the integration of communities,
integration of different income
groups, auditing and updating of the
database of housing needs to ensure
credibility of the list and choice
for beneficiaries, building human
settlements with basic economic and
social amenities and a new way of
inter government relations.
We are not surprised by the
challenges we are encountering on
the N2 Gateway Project, we knew
since day one that the task of
building 22 000 units is ambitious
and difficult, but we needed to
start somewhere and learn some
lessons. With Phase one of the
Project about to be completed and
Thubelisha preparing to launch Phase
Two one can say that it has been a
great success, it remains an
ambitious and difficult project but
a clear demonstration that the new
Government Housing Policy will build
a South Africa that truly belong to
all.
The first phase consisting of 705
units would be ready at the end of
the month. The construction phase
took longer than we expected. I also
want to reassure all citizens of the
City of Cape Town that no one will
change the allocation plan as
described and detailed in the
business plan of the project adopted
in January 2005. 30% of all units
will go to backyarders and 70% to
residents of informal settlements.
The Province guided by the
allocation model and the housing
database developed and audited by
Independent auditors will decide
when people will move in. I have
cautioned the MEC in the province
that the process of moving people
into phase one cannot be rushed,
care must be taken. We cannot
afford to make mistakes. No amount
of pressure must force us to move
people when we are not ready to do
so.
REPRIOTISING TO FAST TRACK HOUSING
DELIVERY
All of us in the housing sector
understand the extent of the
challenge facing us in our vision of
a South Africa free of slums by
2014. We also know that this
challenge cannot be addressed by
small intervention but by targeted
major projects with immediate impact
to our people. For that reason we
have redirected funding to projects
relating to the eradication of
informal settlements as we move
towards 2014.
Following N2 Gateway in our priority
list is also the Cosmo City Project
in Johannesburg, where 441 families
already took occupation of their
houses on 9 December 2005. Other
pilot projects in the provinces to
which funds have been redirected are
Soweto on Sea in Port Elizabeth
where 37 000 units will be built,
Duncan Village, Winnie Mandela in Tembisa
where 8 206 units will be built.
Legae la batho in Limpopo,
where 1000 houses are planned and
426 houses are already under
construction, and Phomolong where
400 housing units of which 132 have
been completed and 197 are under
construction. In the Free State
the project is Grassland where
7272 housing units will be built.
KwaZulu-Natal in
Mount Moriah Extension 1,2 & 3 where
2170 housing units will be built.
Mpumalanga projects are in
Nkanini, Thandukukhanya, Gondwana
where 3155 units will be built and
the Northern Cape has
Galeshewe and Ou Boks where 6 500
housing units are being planned.
Lastly, North-West has projects
to build 8200 units in Jouberton,
Stilfontein Ext 13 & 14, Kanana Ext
14 : 997 and Rustenburg. All the
projects are in various stages of
commencement but are due for
completion in 2006/7 financial year.
INNOVATION TO FAST TRACK HOUSING
DELIVERY
To ensure quality, innovation and
choice, the National Home Builders
Registration Council together with
ABSA ran a competition whereby all
registered home builders and
contractors in the building
industry, who are involved in the
use of alternative building
technologies were invited to
participate in the innovation hub
competition to show case their
technologies in Rosline, outside
Tshwane. A total of 17 show houses
were completed under the
competition. The winners of the
competition will be awarded prizes
this evening.
One of the lessons we have leant
from this Innovation Hub is that we
can build decent quality houses for
our people with the current subsidy
of R36 000. We are now more than
convinced that all houses build
under our Breaking New Ground (BNG)
programme would be between 40sqm
45sqm. This will cater for a
two-bedroom house with a bathroom, a
kitchen and a dinning room. This
will give dignity to our people.
MORATORIUM ON SALE OF MUNICIPAL
LAND
During 2005, an intergovernmental
agreement was reached with SALGA and
municipalities to adopt a moratorium
on the sale of municipal-owned land.
The agreement was entirely
voluntary. Regardless, across the
country a number of our
Municipalities passed Council
resolutions to effect the agreement.
We are more than happy that many of
our progressive municipality
understands that the poor have a
right to stay close to areas of both
economic and social amenities.
TOWARDS A NATIONAL DATABASE OF
HOUSING NEEDS
Concerns were raised about the
credibility of the housing national
database. We can confirm that the
task of auditing the database of the
City of Cape Town as a National
pilot has been concluded. Allow me
to also say that the auditors (Nkonki/PWHC)
have left us a model and a system
that will guide housing allocation
for years to come. We are proud of
the work they have done.
LEGISLATIVE REVIEW AND PROGRAMMES
The draft PIE Amendment Bill has now
been finalised and will shortly be
sent to the Minister of Land Affairs
for her input. Further to this, my
Department has finalized the
Housing Amendment Bill, Housing
Consumers Protection Measures
Amendment Bill, Rental Housing
Amendment Bill, Social Housing Bill
and the Less Formal
Township Establishment Amendment
Bill, 2006. All of which will be
ready to be introduced to Parliament
at its next sitting.
AFFORDABLE INSURANCE FOR SUBSIDISED
HOUSES
The National Home Builders
Registration Council provides a
warranty on government subsidized
houses for a period of 5 years.
This warranty, however, only applies
to structural defects of houses due
to, for instance, poor building
practice. Many, if not the majority
of our housing beneficiaries, are
however poor and are not able to
afford insurance on their houses.
This has been identified as a
critical shortcoming in our quest to
promote housing as an asset. As a
result, I have instructed that this
matter be investigated; including
whether private sector insurers are
able to develop to assist
particularly lower income earners in
the affordable housing market.
ENVIRONMENTALLY SOUND HOUSING
The Department is compiling a
framework for environmentally sound
housing that identifies policy gaps
and provides guidelines for
environmentally friendly homes. We
are also collaborating with the
Danida (Danish International Aid
Agency) on a pilot project to
mainstream energy efficiency in
subsidised housing. This project,
which will receive a contribution of
approximately R13 Million from
Danida, seeks to fully integrate the
aspect of energy efficiency within
the subsidised housing sector.
AFFORDABLE RENTAL HOUSING
PROGRAMME FOR THE POOR
The Department is in the process of
preparing a programme to deal with
different forms of public
residential accommodation which will
allow for an affordable rental
housing option and in this way
provide secure, stable rental tenure
for lower income persons in good
locations with public support.
This process will also investigate a
model which will fund a
stabilisation intervention,
re-development, refurbishment,
demolition & building new community
residential units.
ENHANCING THE HOUSING DELIVERY VALUE
CHAIN AND FULFILLING CAPACITY
REQUIREMENTS
Cabinet took a decision that all
major projects of National priority
must be managed by Special Purpose
Vehicles in order to ensure
streamlined project management and
allocation of resources. I have
mandated Thubelisha Homes, one of
our housing institutions to manage
housing projects and the physical
construction of houses and related
engineering services. This will
include the N2 Gateway Pilot Project
and the Unblocking of housing
projects affected by inflation and
other related factors.
And the Fast tracking housing
solution for people living in areas
of stress by using the emergency
housing circumstances programme. The
National Housing Finance Co-oporation
is now a housing Bank. For the
2006/7 financial year the NHFC will
be able to deliver at least 25,000
units.
I have requested Nurcha to extend
its commitment to emerging
contractors. In this regard, I will
be capitalising Nurcha to the total
value of R60 million over the MTEF
EMERGING CONTRACTORS, WOMEN IN
CONSTRUCTION AND YOUTH DEVELOPMENT
The Department of Housing has
undertaken a number of initiatives
to provide support to small
enterprises within housing. These
initiatives have been undertaken in
line with the government priorities
of promoting Black Economic
Empowerment and gender
mainstreaming.
A Framework for Emerging Contractor
Support has been developed based on
extensive consultative with
stakeholders in the construction
industry and housing.
Flowing from this framework a
support programme has been
developed, initially focusing on
training of emerging contractors. A
budget of R10 million has been set
aside through the National Home
Builders Registration Council to
develop a pool of housing
entrepreneurs who will enhance
delivery of low cost housing.
The initial funding for the
programme of R10 million has been
approved and tenders for the CETA
accredited service providers issued.
NHBRC has up-to date trained 1740
emerging homebuilders of which 610
(35% of the totals) were women
emerging contractors.
Furthermore, the NHBRC has committed
R7 million on training the youth on
the National Youth Service (NYS)
project. The project aims to support
nation building through involving
young people in the delivery of
crucial government services.
Currently, the NHBRC will train 100
youths in Limpopo.
NHBRC has been involved in the
construction of houses in the
Modimolle project referred to as one
of the Ministerial Special Projects.
Modimolle will comprise of 500 units
which are all 50sq meter houses when
completed. This project was
initiated to complement the emerging
homebuilder training. The training
is targeting 200 learners.
Currently, 65 learners have been
trained on the project.
To improve the access of women
contractors to housing projects, the
Department of Housing has
ring-fenced 10% of each provincial
housing departments allocations to
projects undertaken by female
developers/contractors. During 2005,
provincial government departments
allocated a total of 288 housing
development projects to the value of
R1,9 billion country wide to
emerging female contractors in the
sector.
Finally we have completed the
process of restructuring the
Department to respond to the demands
of the new policy. Our enhanced
structure will allow us to attract
scarce skills. It will also allow
for greater monitoring capacity,
greater capacity to assist provinces
and municipality.
I will give
details in our budget speech in the
coming few hours in the National
Assembly. You are all invited to the
Budget Vote presentation and the
Awards Ceremony for the best
Innovation at 18:00 on the Ground
Floor Sammy Marks building. Thank
you. |