T Mhlahlo: Housing performance 2008/09 financial year

17 March 2009

Purpose

To release to the media overall performance of the department in the ending
financial year 2008/09 financial year.

Provincial housing demand

The provision of housing in the province remains a huge challenge. The
overall provincial housing backlog (as per Census 2001 statistics) stands at
797 932,
* 26% of the housing backlog represents informal dwellings
* 6% of the housing backlog being backyard shacks
* 68% of the housing backlog entailing traditional dwellings, which in terms of
Statistics South Africa are regarded as inadequate.

Expenditure performance

R900 million has been spent as at Friday 13 March 2009. The remaining funds
will be spent on the acquisition of land, projects, emergency housing,
rectification and regularisation). With the acquisition of strategically
located land for housing development the R1, 2 billion should be spent.

If the land transactions are not finalised by the closure of books of the
financial year, the under expenditure is likely to be just under R200 million.
However this would be an amount that will be committed to the acquisition of
the land and would like to have it as a rollover in order to pay the land
owners in April 2009. The final picture will be clear at the end of the
financial year when the spending for the year is reconciled.

Overall housing delivery

13 883 houses have been delivered by end February 2008/09 compared 7209 at
the end of 2007/08. This number will increase once the data from all the
districts has been collected and verified. This is a reflection from April 2008
to February 2009. The total number expected once the information has been
verified is 21 000 houses completed during this financial year.

Emergency housing

Responding to natural disasters, the department has delivered temporary
houses in Peddie 71, Humansdorp 70, Alicedale 6, Alexendria 56, Grahamstown 57.
Burgersdorp 50 Bloemmendal 9, Tsolwana 44, Lukhanji 50, Alfred Nzo 90 shelters.
This is consistent with our commitment to provide shelters for disaster victims
in the province.

Land acquisition

The department has concluded eight deeds of Sale agreements with various
land owners to acquire land. The land parcels are located within the urban edge
and are also within established low and middle income townships. They are close
to economic, business, social, education, health, safety and transport
facilities. This promotes our objective of creating sustainable and integrated
human settlements. The properties are situated within the Buffalo City
municipality and Nelson Mandela Metro. The approximate size and the value of
land acquired is five hundred hectares (500ha) worth two hundred and fifty
million rand (R250m)

Non contractors

The department has started evoking contracts of non-performing contractors.
New contractors are now appointed to replace non-performing contractors.

Social housing

Work has already begun at the Emerald sky project with about 480 units being
constructed. The social housing project is intended to provide affordable
accommodation to low and middle income earners in the Buffalo City area. It
should assist workers who will be greatly affected by the world economic crisis
in the Buffalo City Area. This project focuses on beneficiaries earning between
R1 500 and R7 500. This is a pure rental project.

Eradication of informal settlements

* to eradicate the informal settlements the province need to build 201 702
units at a rand value of approximately R13, 5 billion
* there are currently six Breaking New Ground (BNG) projects that will yield
approximately 69 2000 housing units will completion

Rural housing

The department has undertaken a verification study on the nature and extent
of demand and supply in the farm and rural areas of the Eastern Cape (Rural
Housing Demand Study, 2009).

This study has just been finalised and will inform the more responsive
provincial approach to rural housing. The provision of rural housing will be
aligned to the provincial response to rural development by the provincial
government.

Acceleration steps

Some of the steps taken to accelerate delivery are:
* setting up a new department of housing
* contractors encouraged to increase production rate
* putting non performing contractors on terms
* entered into Memorandum of Understanding with Public Works, Eastern Cape
Development Corporation (ECDC) to capacitate emerging contractors working on
all our projects throughout the province
* have a training programme with the Nelson Mandela University to train
emerging contractors to improve their overall capacity to respond to housing
demand in the province.
* appointed unemployed graduates trained in the various fields in the built
environment as site inspectors and supervisors on housing projects
* increased the number of project managers and control work inspectors at a
district level.

Thank you

Issued by: Department of Housing and Safety, Liaison, Eastern Cape
Provincial Government
17 March 2009