N Mokonyane: Gauteng Housing Prov Budget Vote 2006/07

9 June 2006

Comrades Speaker and Deputy Speaker,
Honourable Premier,
Members of the Executive Council present,
Respected members,
Your excellences,
Revered guests,
Ladies and gentlemen;

This year in January we commemorated the 94th anniversary of the formation
of the African National Congress (ANC) as the vanguard of our national
democratic movement. As the oldest liberation movement in the continent and the
last to attain freedom for its people, the ANC has proven to the global
community that it is a force to be revered world over that it is the true
champion and protector of fundamental tenets of democracy and rule of law. Its
political stance on numerous matters of the continent and the world has become
the benchmark for many nations.

Beside this commemoration we are in a year which is going to be marked by
many important anniversaries. When we celebrate these milestones in our history
it is not that we are motivated by any sense of nostalgia or fanatical
affection for anniversaries. In fact we celebrate these milestones in order to
remind ourselves of what we stand for, to reinforce our revolutionary struggle
and the principles that underpin it as well as shaping the strategies and
tactics of the national democratic revolution. This point is also emphasised by
the National Executive Committee of the ANC in its 8 January statement.

One of the historic centenary anniversaries that the country will be
observing on Sunday, 11 June 2006, is the Bhambatha Rebellion in which Inkosi
Bhambatha of the Zondi clan will be posthumously enthroned by the President of
this country at Mpanza. This revolt by the peasants in what is now known as
KwaZulu-Natal was one of the critical military onslaughts waged by indigenous
communities in a fight against colonialism. This revolt as important as it was
in our history and happening just before the formation of the ANC was led by
the courageous revolutionary Inkosi Bhambatha kaManciza, kaMangenge,
kaNomashumi, kaTetane, kaGasa:

‘Usibamba Nkunzana, Ekade beyesaba, Ngoba ebambe abamhlophe, Umhlane
ubelethe amagwala.’

It is our responsibility, honourable Speaker, to preserve and honour our
heroes and heroines lest we risk judged and despised by posterity.

In the same vein on 16 June, the Youth Day, the nation will be commemorating
the 30th anniversary of the Soweto Uprisings, which placed the youth at the
forefront of our national democratic revolution and changed the face of our
struggle. It is incumbent upon us today to honour the young people by ensuring
that their empowerment and development is prioritised. Clearly this can be
achieved through the implementation of pragmatic programmes and projects aimed
at this market. Perhaps it is about time that in all our projects we increase a
quota of allocation for youth so that we can speed up the government’s
investment in young people. Honourable Speaker, let me take the liberty of
welcoming and congratulating the newly appointed members of the Gauteng Youth
Commission. I look forward to working closely with them on accelerating the
empowerment of youth in housing.

We are also preparing for the 50th anniversary of that epic march on Union
Buildings in Pretoria, 1956. That heroic act progressively catapulted the
women’s agenda for equality and liberation to the centre of our national
politics. Since then the critical role of women in our national democratic
revolution and society in general was amplified. The struggle for the total
emancipation of women will not cease till every woman from Qumbu to
Puthaditshaba is free. The centrality of this struggle was also eloquently
expressed by the late revolutionary leader of the Frelimo and former President
of Republic of Mozambique, Comrade Samora Machel, in his statement which
reads:

“The emancipation of women is not the act of charity, the result of
humanitarian or compassionate attitude. The liberation of women is fundamental
necessity for the revolution, the guarantee of its continuity and precondition
for its victory. The main objective of the revolution is to destroy the system
of exploitation and build a new society which releases the potentialities of
human beings. This is the context within which the women’s emancipation
arises.”

There is no doubt that the ANC led government has taken upon itself to work
towards improving the conditions of women. This is evident in a number of
institutions established and policies as well as pieces of legislation
promulgated. But we still need to intensify the fight for women’s rights.

Honourable members, it is my belief that for the first time in the horrible
history of our country we have a government that earnestly and tirelessly work
for the better life for all. Multitudes of our people since the advent of
democratic order have benefited from the transformation programme of this
government. This includes even those who are on the opposite trenches of our
democratic government.

Comrade Speaker, it is indeed the “Age of Hope” that the country is entering
which the State President alluded to in his State of the Nation address. We are
witnessing unprecedented growth and expansion in the economy.

In fact the fundamentals of our economy are so sound such that foreign
investment is surging.

The social conditions of our people in Gauteng are improving such that:

* 96 percent of households have access to free basic water
* 76 percent of households have free basic electricity
* 80 percent have to access to basic sanitation and weekly refuse removal
* between 1994 and 2005 ownership of 277 367 houses was transferred to Gauteng
residents, 381 585 stands were serviced and 225 254 houses were built thereby
providing shelter to millions of families.

Clearly we have given our people “hope” in spite of what the cynics and
prophets of doom have been predicting. It is therefore necessary that as we
continue to provide better life for all we triple our efforts in eradicating
the terrible legacy of colonialism and apartheid that has condemned our black
brothers and sisters to the material life of misery.

This cannot be allowed to continue to blot the slate of our outstanding
achievements. Even the Premier in his address during the opening of the
legislature on 13 February 2006, stressed the urgency with which we should
approach our work and he further underlined matters that were demanding our
undivided attention. On that point the Premier declared that:

“One of the key issues that the 2006 programme of action should respond to
is the expectations of our people for more economic growth, job creation,
poverty reduction and accelerated delivery of services.”

Honourable Premier, I want to assure you that in my line of function which
happens to be housing we are going to rise to the challenge and already we have
moved with speed to implement commitments made to the people of this province.
We believe we have proved beyond reasonable doubt that a promise made is a
promise kept. Our machinery is well oiled and the systems are geared towards
the attainment of the provincial government strategic goals. This will be shown
as I proceed with my presentation here.

1. 2005/06 Review of performance

Firstly, Honourable members, kindly grant me your indulgence as I take stock
of what we did last year. In 2005/06 budget vote I stood in this house and
outlined the Department of Housing plans. I stated quite categorically in my
address that our plans and programmes were derived from the National
Comprehensive Human Settlement Plan (NCHSP) commonly called Breaking New Ground
(BNG). They were also based on the basic principles of the Freedom Charter
since it was also “the year of popular mobilisation to advance the vision of
the Freedom Charter”.

Premier, this progressive founding document of our democracy as well as the
BNG framework will continue to be our radar in all our activities even this
year and throughout the term of this government. In essence, in my account I
alluded to the fact that there was going to be a paradigm shift in the manner
in which housing business was conducted in Gauteng.

Following my account, I committed the Department to:
(a) the acceleration of housing delivery in all municipalities
(b) the fast tracking of formalisation and eradication of informal settlement,
our goal being the eradication of such settlements by 2014
(c) the promotion of mixed income and mixed tenure human settlements to achieve
racial and class integration
(d) the diversification of housing products
(f) the improvement of and formalisation of backyard accommodation
(g) decisive intervention in the secondary housing market
(h) increasing the involvement of private capital in affordable housing
developments through the promotion of Private Public Partnership (PPP)
(i) promotion of homeownership and
(j) the refocusing of Urban Renewal Programme.

Speaker, as I promised in this House all the initiatives I have just
mentioned were accomplished. The table below reflects the record of our
performance in the last financial year as follows:

Programme 2005/06:

Formalisation of informal settlements:

Serviced stands
Target - 29 750
Delivery - 28 729

Peoples housing process
Target - 1 440
Delivery - 1 865

Formal housing
Target - 9 882
Delivery - 13 908

Community Builder Programme
Target – 7200
Delivery - 4 781

Relocation assistance
Target – 650
Delivery - 273

Transfer of Rental Properties (TORPS)
Target - 7 200
Delivery - 17 137

Emergency intervention in hostels
Target – 20
Delivery - 48

Hostels – units
Target – 1 800
Delivery - 732

Social housing units
Target – 1 440
Delivery - 375

All these achievements were attained within the allocated budget of R1 764
295 and we expended a total of R1 673 206 and our under expenditure was R91 089
and this mainly came from our urban renewal projects but we have made
applications for roll-overs because the budget was for capital projects and was
already contracted for various projects. As a result of our improved planning
and execution of our strategy, the Department has ensured that delivery within
the 2005/06 year be improved resulting in an under spending of the housing
grant of only R350 000. This might sound negative and can be attributed to a
failure but we are confident that with processes and systems being implemented
we can do better that this and that is our commitment.

Premier, our performance speaks for itself. Clearly it shows that we have
steered the ship in the right direction. In fact the Department is in a healthy
state and geared to achieve the set goals. However, the ride last year was not
as smooth as it appears on paper. We had to contend with numerous challenges to
be where we are today.

These challenges are spelt out below.

Prior to spelling out the Department’s plans and programmes for the 2006/07
current financial year, comrade Speaker, allow me to touch on the context
within which we operate.

2. Service delivery context and its challenges in Gauteng

Gauteng continues to experience sound economic growth and expansion. Over
the past 10 years, the province has had sustained growth which reached the rate
of 5,6 percent in the fourth quarter of 2004. Its position as the country’s and
continent’s economic engine remains intact.

The impact of the economic upswing is reflected in the reduction of
unemployment and an increase in a number of people with disposable income.

This healthy state of affairs in Gauteng is attributable to strong
leadership and prudent implementation of the ANCs manifestos in all three
spheres of government coupled with disciplined adherence to the province’s
five-year programme of action as stipulated in our Growth and Development
Strategy (GDS).

While the country and Gauteng in particular continues to enjoy economic
prosperity, there are a number of challenges that the country and our province
have to contend with. A great number of our people are by and large dependent
on the services and products of the government to make ends meet.

Being the smallest province geographically in South Africa, Gauteng remains
the beacon of hope for many impoverish people in this country if not across the
continent. The population numbers in Gauteng have astronomically increased from
7,3 million in 1996 to 8,8 million in 2001. It is estimated that 62 percent of
this population number earns a meagre less than R3 500 per month. This
situation breeds a number of challenges and/or anomalies for the provincial
government.

From the housing front, we are faced with the challenge of an increase in
informal households which is currently estimated at 870,246 households.
Basically it means that the province has seen an increase in informal
households from 24,98 percent in 1996 to 27,68 percent in 2001 and I am certain
that once another census count is conducted the situation would be far more
challenging. There is no doubt that such an increase has adverse ramification
for the infrastructural development and provision of basic services for the
people of this province.

The housing demand, as a result, has increased from 32,6 percent in 1996 to
35,3 percent in 2001. Compounding the situation further is the fact that the
migration of households to Gauteng is estimated at 25 500 households per annum.
This has an impact on Housing Demand Data Base (waiting list) backlog which is
estimated at 52 500 households per annum.

Speaker, we accede that there has been some hiccups and challenges in our
operations caused in the main by the human elements and because we are a
Department at work and therefore we are bound to commit certain mistakes along
the way.

In our midst we still have less committed paper pushers who have no
understanding that public service is not just a job but a calling and therefore
requires total commitment and understanding of what this government wants to
achieve. As a result we have had complaints of shoddy workmanship in some of
our projects.

People who are supposed to monitor and inspect were either shirking their
responsibility or colluding with unscrupulous developers and other service
providers that were trusted to deliver certain services on our behalf. In our
midst there is a pack of heartless wolves that at the slightest chance pounce
and help themselves in the public purse. These are officials who have turned
corruption into a career with no regard for public good.

However, in spite of these challenges we are never distracted from our
mission to provide a better life for all. We are spurred by a sense of unity in
action and the knowledge that there is “hope” in the horizon which has also
been shown by the masses faith in this government during the past elections and
also during our outreach programme we have received feedback about how
communities receive our services and what kind of challenges prevail in each
community and what corrective mechanisms are needed.

Owing to these prevailing conditions, we resolved in the current financial
year (2006/07) to refocus and align our programmes and strategies so that we
can achieve optimal results and be able to respond to various needs and
challenges as presented by communities and prospective beneficiaries of our
programmes.

3. 2006/07 Housing budget

Having outlined the challenges and given the account of our previous year’s
performance, comrade Speaker, I think at this point it is appropriate that I
delve into the issues that are covered in the 2006/07 budget.

This year’s allocation of budget has increased from R1 764 295 to R2 081
462. Although we would have like to have more we are happy that this allocation
will enable us to perform better and deliver on our mandate.

The breakdown for this year’s budget is as follows:

Programme medium term estimates R/thousands:

1. Administration
2006/07 - 74,918
2007/08 - 84,425
2008/09 - 91,600

2. Housing and Research

2006/07 - 10,284
2007/08 - 12,432
2008/09 - 12,152

3. Housing Performance/Subsidy Programmes
2006/07 – 1,550,152
2007/08 - 1,966,668
2008/09 - 2,182,244

4. Urban Renewal and Human Settlements Redevelopment
2006/07 - 380,630
2007/08 - 389,846
2008/09 - 374,566

5. Housing Asset Management
2006/07 - 65,478
2007/08 - 67,161
2008/09 - 67,881

Total Estimates: Vote 7
2006/07 - 2,081,462
2007/08 - 2,520,532
2008/09 - 2,728,445

4. Housing delivery programmes

In terms of our plans this year we want to speed up delivery by focusing on
those projects and programmes that will give us high and visible impact in the
shortest period. These programmes are formulated, aligned and co-ordinated in
such a manner that they should make a visible dent on housing backlog and in
our fight against poverty.

First and foremost our programmes are underpinned by a clear strategy. This
strategy attempts to redress the apartheid spatial development patterns that
perpetuated a false sense of racial supremacy on one hand and inferiority on
the other.

The strategy aims to cure this anomaly by:

* developing viable human settlements in well-located land close to economic
nodes and hubs of our towns and cities
* promoting quality mixed-housing products for mixed income groups as a means
of fostering integrated racial human settlements
* eradicating informal settlements
* promoting innovation through alternative technology for use in the
construction of houses
* enhancing private sector involvement in the funding and construction of
houses
* extending housing benefit to cover R3 500-R7 500 income bracket
* building Gauteng so that it becomes globally competitive (as a Global City
Region).

Owing to these noble intentions, we have developed ongoing programmes which
commit ourselves to:

* the formalisation and eradication of all informal settlements by
2014
* twenty priority township regeneration programme for completion by 2009
* social housing and mixed development
* affordable rental accommodation
* urban renewal programme for completion by 2009.

It is through these programmes that we plan to improve the living conditions
of our people.

In terms of the eradication of informal settlements the Premier set the tone
for this programme in his address by saying “a key aspect of our programme to
build sustainable communities is to rid Gauteng of informal settlements by
2014.” In line with the Premier’s view, we have been able to formulate a
spatial development framework and identified the informal settlements that
require relocation in Gauteng.

In 2006/07 the Department will be able to eradicate informal settlements
through delivery of 38 125 units and 133 of 405 informal settlements can be
constructed institution and this will be achieved through the programmes such
as essential services, formal housing, community builder programme and peoples
housing hrocess.

This number can be broken down per metropolitan and/or municipality as
follows:

* Johannesburg - 63 out of 124 settlements,
* Tshwane - 33 out of 54 settlements,
* Ekurhuleni - 29 out of 103 settlements,
* Westrand - four out of 28 settlements,
* Sedibeng - seven out of 23 settlements,
* Metsweding - two out of 14 settlements.

For the remainder of informal settlements relocation will be necessary and
detailed logistics and planning has been done to determine and identify
habitable areas where people will be taken to and a process to inform
communities in these areas is already underway.

In brief the delivery targets for 2006/07 under this programme can be summed
up as follows:
* Johannesburg - 19 265 stands and 17 714 houses,
* Ekurhuleni - 13 004 stands and 12 245 houses,
* Tshwane - 15 000 stands and 10 678 houses,
* Westrand – 1 966 stands and 1 042 houses,
* Sedibeng - 4 204 stands and 6 897 houses,
* Metsweding - 3 285 stands and 1 203 houses.

Speaker, based on our past experiences we have taken a decision that as part
of eradicating informal settlements we are going to provide serviced stands and
immediately follow with top structure. This is aimed at ensuring that we really
provide housing through turnkey projects so as to maximise impact and be able
to change the environment and livelihoods in such areas. I have discussed the
matter of land invasion with all municipalities and our agreement is that all
should implement stringent measures in order to avoid the sprawl of such
settlements.

Coming to 20 Old Established Townships Regeneration Programme announced by
the Premier in this house and aimed at the rehabilitation of infrastructure of
the 20 old established townships, the Department has set up institutional
mechanisms. Political Steering Committee and the cluster responsible for the
outcomes of the programme have been established.

The key positions of the programme and project managers have been advertised
and filled; a total of R20 million have been allocated for the development of
business plan and will be submitted to Executive Council (ExCo) by 31 July
2006. The business plans will be implemented over a three-year period at a tune
of R3 billion provided for by the provincial government.

Taking a quick glance at the housing market in Gauteng, it transpires that
there is sizeable market for rental accommodation. Our response to this reality
was the establishment of affordable rental accommodation. According to a survey
funded jointly by FinMark Trust, Nedbank and Social Housing Foundation “in
2005, 25 percent of all residential property purchases were made by buy to let
investors seeking to realise high rental returns.” Furthermore the study found
that small-scale landlords are contributing significantly to the supply and
management of affordable rental housing for low income people. In supporting
what we have always known, the study shows that about 3,5 million households
live in rental accommodation in South Africa and 1,85 million rent their
accommodation from small scale landlords.

In addressing the needs of this significant market, the Department launched
a programme called backyard upgrade which is currently piloted at Orlando East
in Soweto and Boipatong in Sedibeng. The intention is to regularise the
erection of backyard accommodation for rental and normalise the landlord tenant
relationship.

I have no doubt in my mind this will enhance the local economy of our
communities. For the current year in pilot areas of Orlando and Boipatong we
aim to deliver a total of 750 units with two bedrooms each. Once this project
is finalised it will be replicated into other areas taking into account lessons
and challenges leant during the implementation process.

On hostels, the Department has segmented them into seven geographic clusters
for conversion into Affordable Rental Accommodation (ARA). This programme
offers the tenants with tenure options of rental or ownership and also various
typologies which include single, communal or family units. To date we have
fully converted 12 hostels into family units. Out of 54 hostels we have
completed emergency work in 48 hostels. The remaining six will be attended to
during the current financial year. Our target for this financial year is to
target eight hostels for demolishing and or reconstruction in areas such as
Diepkloof, Mohlakeng, Helen Joseph and M2 Nobuhle (Alexandra), Kagiso, Madala,
MBA and Saulsville.

In terms of the Community Rental Programme for 2006/07 the Social Housing
Programme funded by subsidies will be implemented through the Gauteng
Partnership Fund. The following projects have been approved:

Tsakane – 1 273; Clayville – 1 077; Orange Farm – 1 000; Soshanguve - 502;
Roodepoort - 324; Alexandra - 240; Marlboro South - 240; City of Johannesburg
Inner City – 2141

Coming to housing and mixed income development programme, the Department has
taken an initiative in promoting the racial and class integrated settlements in
Gauteng. We are in a process of formulating a policy on inclusionary housing to
cater for the lower middle-income market which has not been benefiting from
both the government schemes and the banks financial schemes. This market
comprises of those people who earn between R3 500 and R7 500. This policy will
be presented to the ExCo no later than August 2006 for consideration.

In terms of the inclusionary housing policy the commercially driven
developments will be required to allocate a certain percentage value of the
total price range of the project for affordable housing for the lower
middle-income group.

The MEC flagship projects are to be developed in each local authority and
these will be completed by 2008/09 and all are turnkey projects that would be
implemented through established developers. They include the following
projects:

Cosmo City, Dooronkop (COJ), Limbro Park, Austin View and K206 (Alexandra),
Leeupoort (Ekurhuleni), Nellmapius, Thorntree View and Olievenhoutbosch
(Tshwane) Azzadville/Kagiso, Middlevlei and Droogehuivel (West Rand).

Two of these projects are already underway in Cosmo City and
Olivenhoutbosch. The Olivenhoutbosch project is divided into subsidy, bonded
and rental housing. Subsidies 3 216 stands and houses bonded 1 181 houses and
rental is 1 ,292 units. The anticipated completion date of the project is March
2008.

Cosmo city is well on track with almost 1 245 houses being finalised. So far
a total of 713 low cost houses have been handed over to their rightful owners.
Currently there are 400 bonded units under construction and occupation started
in December 2005. Regarding low cost housing, we aim to build and complete
about 5000 units by November 2007.

In association with the Department of Housing, Radio 702 and First National
Bank (FNB) we have established joint partnership to implement new housing
product as part of the 3 000 finance linked housing structures at Cosmo city.
702 houses are to be made available to successful applicants who have qualified
for a mortgage bond from FNB and a housing subsidy which is granted by the
Department of Housing and these will be ready for occupation by December
2006.

This is part of a joint effort between government and the private sector to
make houses more affordable especially to first time homebuyers. On the basis
of this new improved housing initiative people earning between R3 501 and R7
000 per month will now be able to afford a range of housing options through the
newly built or the secondary markets. The programme will be disbursed as a once
off subsidy to qualifying beneficiaries who will not qualify again for another
state assisted subsidy. The Department has ring fenced an amount of R100
million for this initiative.

In brief, we are on track with the strengthening of relationships with
private sector in terms of Public Private Partnership (PPP) as it can be
testified by the above projects.

In our quest, comrade Speaker, to promote homeownership and the restoration
of dignity of our people we are on course. Through the transfer of housing sub
programmes (Regulation and Transfer of Ownership - RETRO and TORPS), we are
targeting to transfer 7 044 properties in 2006. Phase two of Retro will focus
on both the commercial and vacant land properties.

With regard to our existing Urban Regeneration Programme, we are on track
with our plans in all three focused areas of development, Alexandra, Evaton and
Bekkersdal. In Alexandra the greatest need is the availability of low cost
income houses and rental housing. Four key short-term housing projects have
been identified and packaged since January 2005. All these projects are on land
identified within Alexandra and are currently being implemented in different
phases. The following are the key infrastructure projects:

* Housing development in Extension seven - installation of bulk
infrastructure completed. All services completed. 85 percent top structures
completed with connections made as allocation takes place.

* K206 - rezoning for housing completed. Detail design and layout completed
and process to appoint service provider is underway and will be on site by July
2006. Affordable rental accommodation detail design and layout completed and
ready for procurement processes.

* M2 Hostel - refurbishment of 286 units done and completed. Ekukhanyisweni
Primary School, construction is underway and progressing well and project is 90
percent complete. Development of RCA Local Economic Development Node detail
design and layout completed.

* Site development plans approved. Upgrading of cemeteries phase two has
been completed. Currently there are 23 constructive sites in Alexandra focusing
on various high visible infrastructure projects.

In Bekkersdal progress is well ahead and our focus is on upgrading major
infrastructure around central business district (CBD) and Taxi Rank area. The
East and West Clinic upgrade is almost complete, process of relocating affected
households because of dolomite land is in progress, installation of high mast
lights, waste management programme is underway and it will be completed by July
2006.

In Evaton, the resealing of streets in areas such as Lakeside, Easton, Adams
Union and Sterling Roads has begun and expected to be finalised by 31 March
2006. The construction of Surfaced Roads in Union Road, Falcon and Lake Circle
has also begun with almost 70 percent of the work completed. Installation of
road traffic signs, road markings and street names signs is under way and 95
percent of the work completed. Infrastructure projects focusing on sewer
network, sanitation has been done in three primary schools.

Institutional arrangements with various local authorities in where these
projects are taking have been made and we now have one project team that is
responsible for the implementation of projects.

The Kliptown Housing Development is also progressing well with a total of
602 low cost houses completed and occupied. The social housing project is also
and the housing project at Walter Sisulu (Freedom) Square which consists of 478
complete rental units and the first occupants moved from end May 2006 and it is
anticipated that the whole complex will be fully occupied July 2006.

The second part of the programme in the Golf Course is projected to yield
about 932 instalment sale units and to date 378 units has been built. It is
expected that the project will be completed by end of September 2006 and it is
anticipated that, beneficiaries will start occupying units from 1 October
2006.

The Department of Housing (Gauteng) through its Gauteng Partnership Fund
(GPF) has made great strides with the individual banks in setting up risk
sharing structures that would allow the banks to provide development finance to
institutional housing projects (for people earning between R1,500 and R7,500)
at prime rate. As an integral player in social housing and urban rejuvenating
market, the GPF has been one of the key mechanisms to entice capital market
investment into this market. By taking a first layer of risk in housing
projects, the GPF provides investors with higher level of certainty that their
investment will be safe and that project risks will be appropriately mitigated.
The GPF gears private sector finance by ensuring that the financial leverage is
higher.

It is GPF’s intention to facilitate funding that would permit the private
sector to escalate funding into the sector. This enables the GPF to leverage
additional funding from private sector participants from a deceasing equity or
loan base when financing projects. This eases the burden on government, as
there should be a gradual shift in the role of the government from provider of
finance to facilitator of development. The Gauteng Partnership Fund ensures
that housing financiers enter the lower income housing market on a sustainable
basis.

GPF’s objective for 2005 to 2008 is to develop and maintain mechanisms to
make housing finance accessible for housing projects for people earning R1 600
to R8 200 (2006 figure) by facilitating the sustainable entry of private sector
funding.

The GPF has negotiated this structure with all four major retail banks. In
this structure there is no requirement for additional institutional housing
subsidies from government which therefore imply that this funding can be
utilised elsewhere to support lower rentals in inner city project. This is a
programme that is being developed by the social housing division within the
Department.

In regard to specific refurbished rental projects in the inner cities for
people earning R1 500 to R7 500, the GPF concluded a deal with Standard Bank in
September 2005 with a value of R90 million rand for upgrading of inner city
buildings. This facility has to date delivered nine projects in the inner city
providing 2141 units to people earning between R2 500 and R7 500 as a monthly
income.

The GPF has also been active in developing small-scale landlords in the
inner city in partnership with the Trust for Urban Housing Finance (TUHF). This
is done through the Intuthuko Equity Fund. This fund is a venture capital fund
for small, emerging entrepreneurs (landlords) who want to enter into
small-scale housing projects in the inner cities. This product allows GPF and
TUHF to assist small landlords who do not have equity to buy or refurbish
buildings. This project has over the past year assisted six entrepreneurs who
have never owned or managed a building to acquire buildings to the value of
approximately R8 million. These buildings have delivered 175 units to the inner
city.

The Department through the GPF did exceptionally well in gearing private
sector funding in 2005/06. During this period GPF invested R28 million in
projects which geared R116 million worth of funding from private banks for 12
projects in Gauteng.

Given the success of GPF, we have in consultation with the board of trustees
extended its mandate to include the management of the social housing
Programme.

We are currently exploring the use of alternative building technology in
housing delivery. Together with the national Department of Housing, National
Home Builders’ Registration Council (NHBRC) and Absa bank we are piloting these
methods and technology using 200 stands in thorn tree view. We are looking at
committing 10 percent of units for the use of alternative building technology
for each project so as to increase diversity of our products.

Furthermore, we have decided to decentralise the operations of the
Department into four regional offices that are located within the different
metropolitan councils and municipalities.

In an effort to strengthen our capacity to monitor implementation of our
programmes, a monitoring and evaluation has been established to evaluate
progress in the implementation of the strategy against the targets set. It will
further recommend intervention mechanisms in areas where there is little or no
progress. This unit is still in its infant stage and will be fully capacitated
by the end of financial year 2006/07.

Speaker, during September 2004 we established internal anti-corruption unit
and since then we have dealt with a number of cases that revolve around
allegations of corruption, maladministration, illegal occupation of houses,
land invasions etc. Despite challenges faced by this unit great strides have
been made during 2005/06.

In the course of their activities, they received 397 cases and 137 of these
have been finalised whilst 260 cases remain under investigation.

The unit has also taken over all the outstanding work from the Fivaz
Ramaithe Committee of Enquiry and there is progress with some cases referred to
various law enforcement agencies for further action. The report from the
committee of enquiry has been received and once we have analysed it will be
referred to the ExCo and then portfolio committee on housing. We will make the
outcomes of the investigations and corrective measures to be taken public. We
remain committed in dealing head on with any act of corruption irrespective of
the person’s status.

The Department’s programmes do contribute towards job creation and to
curbing the marginalisation and exclusion of black people in particular from
participating in the economy of the country.

All housing infrastructure projects are aimed at empowering women, disabled
and the youth. The set targets are as follows: 70 percent black small, medium
and micro enterprises (SMME), 30 percent for women, five percent youth and
disabled respectively. Job creation will be achieved through the people’s
housing process and community builder programme, which are labour intensive and
rely solely on local labour. One hundred interns have been registered for
2006/07 financial year. In an effort to speed up the delivery of houses, the
Department has improved its procurement system and called on established
developers, established constructors and women owned construction companies to
register in our database in order to easily facilitate process of appointing
service providers for various projects.

The Department has taken an initiative of involving young people in the
development of its project and in this regard we are finalising housing
programme to be implemented through the 16 June Foundation. Our objective is to
empower the youth through various skills and ensure that youth are
participating in job creation opportunities such as minor daily maintenance in
20 Old Established Township Programme. The details and scope of the plan will
be in place by end of September 2006.

Speaker, the Department of Housing as part of empowering women within the
sector we have identified 10 women construction companies, at least one per
district, for development such that at the end of the next three years these
should be able to compete in their own right with established developers.

These companies will be given work to the value of R200 million per annum
and support systems will be provided for mentoring and coaching through our
professional teams. The work to be done will vary from project to project but
our principle is to ensure that women are given the latitude to perform in this
sector. This is our contribution towards commemorating the 50th anniversary of
the Women’s Day. Malibongwe igama lamakhosikazi.

Comrade Speaker, honourable members, ladies and gentlemen, as I am about to
conclude my presentation I would like to express my heartfelt gratitude for the
support I have enjoyed from the Premier, members of the ExCo, Portfolio
Committee and the house in general. I would also like to thank all our
stakeholders, institutions, professional teams, service providers and members
of the public for supporting, co-operating and working with us in realising our
vision and hope that our partnership with continue and grow from strength to
strength.

I would also like to thank the staff of the Department of Housing for the
sterling work and unflinching dedication towards the improvement of living
conditions for our people. In particular, I want to say to the Head of
Department, Ms Manching Benedicta Monama and her senior management team
“Ningadinwa nangomso, isizwe siyathokoza.”

I thank you!

Issued by: Department of Housing, Gauteng Provincial Government
9 June 2006