Address by MEC Makoma Makhurupeptje on the occasion of the Budget Vote 11 of the Department of Cooperative Governance, Human Settlements and Traditional Affairs to the Limpopo Provincial Legislature, 12 August 2014, Lebowakgomo Legislative Chambers.

Madam Honourable Speaker and the Deputy Speaker
Honourable Premier Stanley Chupu Mathabatha
Colleagues in the Executive Council
Honourable Members of the Provincial Legislature
Honourable Members of Parliament
Your Worship, Executive Mayors and Mayors of our municipalities as well as the newly appointed mayors
Chairperson and Members of Contralesa
Chairperson and Members of the House of Traditional Leaders
Our esteemed Majesties and Your Royal Highnesses present
Leadership of Chapter Nine and Ten Institutions
The leadership of the ruling party, the African National Congress and Alliance Partners
Leaders of opposition parties Stalwarts and veterans of our struggle
Leadership of various religious denominations
Representatives of ESKOM, NHBRC, HDA and the SABC
Coghsta Staff led by the Acting Head of Department
Invited Guests and Stakeholders of the Departments
Comrades, ladies and gentlemen

Good morning, Thobela, Avuxeni, Ndi matsheloni, Goeie more

Madam Speaker,

I consider it a great privilege to be delivering my first Budget Vote Speech in the fifth democratic legislature of our province, just 3 days after the celebration of Women’s Day across the country under the theme “celebrating 60th Anniversary of the women’s charter and 20 years of freedom: Moving women’s Agenda forward”. As a woman myself, leading a multi award winning department and a department that last week received a clean audit report for 2013/14, the feeling is quite overwhelming.

Madam Speaker, before I proceed, allow me to take this opportunity to thank my Predecessor MEC for Health Mr. Ishmael Kgetjepe for the solid foundation laid in the department as well as TEAM COGHSTA for warm welcome I have received in the department.

Thank you.

Madam Speaker,

We are proud that many of our South African women have made a mark for themselves and continue to do so by proving that given the opportunity, nothing can stop those who have determination, passion and are themselves hardworking.

We have travelled a long way since August 1956 and we will never forget the inspiring examples set by countless heroines of our struggle such as Charllotte Maxeke, Lillian Ngoyi, Sophy Debruin, Ruth Mompati, Albertina Sisulu, Helen Joseph, Berta Mkhize, Ruth First, Florence Mophosho, Adelaide Tambo, Amina Cachalia, Tiny

Nokwe, Regina Nzo, Dorothy Nyembe,MaristellaSegwaleMabitje, Sophy Mogotlane and many others.

These gallant women have undoubtedly started the important work and we must continue to pursue our goal of a united, non-sexist, democratic and prosperous South Africa which prides itself on the values as enshrined in our Constitution.

Kgonthe ke gore mala a basadi a rwala dikgolo, bagale le bagaleadi. Mmago ngwana o swara thipa ka bogaleng.

We are happy with the progress that is being made in terms of women’s representation; we however still have to do more, so that sooner than later we become a leading province with regard to this important aspect of empowering our women.

At the local government level, Waterberg, Mopani and Polokwane municipalities are led by Woman Executive Mayors which is 50% representation of executive mayors in the province. We see this improving gender representation not just as making up numbers, but as a deliberate act of gender empowerment informed by the historical imperative of creating a truly representative, democratic and equal society.

Madam Speaker, this coming Thursday of 14 August, our best woman contractor in the province Mme Merriam Moetlo as recently awarded in our Provincial Govan Mbeki Awards will be competing with the rest of the country’s women  contractors at the National

Govan Mbeki Awards in Gauteng province. We say to you good luck to you mam, go and represent Limpopo well. We wish goodluck.

Madam Speaker

The Premier of our province reminded us, in this very House, when he delivered the State of the Province Address on 26 June 2014 of the real meaning of the mandate we received from the people of Limpopo. The Premier said: “The overwhelming mandate that we received on 7 May is humbling. It has re-affirmed the trust and confidence of the people of Limpopo in the ruling party to continue to govern. As public representatives in this legislature, we therefore have a mammoth task to ensure that we do not disappoint our people”.

He went further to say: “They want us to re-double our efforts in addressing the challenges of poverty, unemployment and inequality as identified in the National Development Plan. We should know that poverty, unemployment and inequality have the potential to risk the democracy and stability we are enjoying today”

Madam Speaker,

As I present this budget for the Department of Coghsta, I want to remind this House that, South Africans of all colours, in 1955 gathered at Kliptown, Johannesburg and agreed in no uncertain terms that “there shall be Housing, Security and Comfort”. Fifty Nine years this year, South Africans having made this commitment, I am pleased to present a budget in vigorous pursuit of this Freedom Charter stipulation.

Human Settlement Development is at the centre of the work of this Department.Central to this work, is the realisation of integrated and sustainable human settlements. This is, as we always say, where you live, is where you must work, recreate, go to church, do shopping, get entertained and so on.

In this regard, we are moving from disintegrated ways of settlements to comprehensive ways of settling our people. The Manifesto of the ruling party, the African National Congress, summarises this as “to ensure decent living conditions and sustainable human settlements”. In giving effect to this manifesto provision, the Department of Human Settlements prioritizes the building of cohesive, caring and sustainable communities.

Madam Speaker,

Since 1994, the department built and handed over 250 000 housing units to our people. These houses benefited no less than 1 million households in our province.

We have already finalised our MTSF for the delivery of housing opportunities in the next five years. In terms of this plan, the housing backlog is expected to be reduced by not less than 80,000 housing opportunities through implementation of different housing

programmes by 2019 in this province. In this financial year, we will build 10 500 of these houses.

It is a well-known fact that the housing procurement process for 2013/14 was halted in March 2013 due to allegations of supply chain irregularities. Flowing from this situation, the Human Settlement Grant for the Province was withheld for the whole of the 2013/14 financial year, a forensic investigation took place to verify the allegations, and disciplinary processes ensued against certain implicated officials. To this end 4 senior officials were found guilty and dismissed from the public service.

One major condition of the release of the Human Settlement Grant was that the NHBRC, the Provincial Treasury, the Section 100(1) (b) Administrator, the National Department of Human Settlements, as well as the National Treasury (Office of the Chief Procurement Officer) should be part of the “new” procurement processes.

The condition stated above inadvertently resulted in undue delays in the procurement process for 2014/15, to an extent that only 1,500 units have since been awarded by August 2014, with the procurement process and the award for the balance of 9,000 units due to be completed by the beginning of October 2014.

Despite these delays, we do have the capacity and commitment to complete the construction of all the 10,500 housing units during the current financial year.We are quite confident that we will be able to deliver on this commitment as we have beenable to address all the

challenges brought by the awarding of the human settlements tender for the construction of low cost houses (RDP) for the financial year 2013/14 as recommended by the forensic audit commissioned by the Treasury Department.

In the same breadth, we are finalizing the processes of the appointment of other service providers for the current financial year and contractors for the 2015/16 financial year. This,  Madam Speaker, is done to ensure forward planning to unravel all challenges relating to under-expenditure of the human settlements development grant.

Whilst we are increasing delivery of houses as alluded to earlier in this speech, let me hasten to indicate that we are mindful and take full cognisance of the fact that, there are some of the housing projects that remain incomplete from the previous years. We have finalised the audit of all these projects and have the structural integrity assessment status report of each of all the affected housing units. In this regard, 1 822 housing units are expected to be rectified by the end of March 2017. In this financial year, 700 of these housing units will be rectified at an estimated amount of R58 million.

Madam Speaker,

In this financial year, we have planned installation of services on three thousand one hundred and thirty one (3 151)sites at an amount of R96 million for Upgrading of Informal Settlements. According to the Stats  SA: 2011, a total of  56 945  households in Limpopo live  in informal settlements. Of this figure, the Department has identified and verified (audited) a total of seventy four (74) informal settlements.

This figure represents 23% of audited informal settlements and are at various stages of township establishment.To date, these informal settlements house an estimated number of 186 386 people. Indeed Madam Speaker; we would have failed in our responsibility if we do not address this challenge. In terms of our plan, a total of 21 informal settlements will be upgraded and formalised by March 2016. A total of 41 826 families is set to benefit from these developments.

Focus in respect of this upgrading and formalisation, will be done through the installation of basic infrastructure such as water, sanitation and other housing opportunities. In terms of the informal settlements upgrading programme, 9 739 informal settlements will be provided with basic services by March 2017. Of this figure, work on 2 500 informal settlements will be done in the current financial year. Four (4) catalytic projects were identified (Altoostyd, Polokwane Ext 86 &121, Marapong CRU and Bela-Bela Ext.25). These projects are aimed at correcting the effect of apartheid spatial planning.

Madam Speaker,

We have planned 514 sites for affordable rental at R47 341 000. This is for both site preparations and top structure development. 23 projects at an estimated delivery of 10 025 rental units have been identified in 8 municipalities at an investment requirement of R1,1 billion.

The Department will build 2121 rental units (Community Residential Units and Social Housing Projects) by March 2017. One hundred and twenty (120) of these rental units will be built this financial year, 2014/15. Market surveys are concluded and confirm demand across all income groups.

We have put aside an amount of R6 million for the demarcation of 5 000 sites for residential purposes in both rural and urban areas.

The funding requirements for top structure cost (excluding bulk services) are estimated at R2 billion for the afore-mentioned projects. Structural assessments have been completed in three hostels,and these projects are ready for development. One hundred and eighty nine (189) Community Residential Units have been completed in Seshego and will be handed over to beneficiaries before the end of this financial year. Funds have been allocated for top structure construction of Marapong Community Residential Units in Lephalale.

Madam Speaker,

In the last five (5) years, we were able to purchase strategically located land for human settlements development of about 663 hectares at R1,1 billion. The Province has a target of acquiring 10 000 hectares of well-located land that has to be rezoned and released for new developments, targeting poor and lower middle income households.

The department will be acquiring 132.5 Ha of land for the building of houses in the coming three years. An estimated Medium Term Expenditure Framework funding allocation of R225.3 million will be required based on the previous valuations and acquisitions. This represents an annual average requirement of R75.1 million.

In this financial year, R14 459 000 has been put aside for the acquisition of 50 hectares of land. This land is expected to be acquired in strategic economic areas of mining towns. Madam Speaker, we do this as a way of heeding to a call made by the President, in his State of the Nation Address about this issue, when he said: “we will implement the undertaking to build housing and other services to revitalize mining towns, as part of the October 2012 agreement between business, government and  labour”. The mining areas in our case that the President mentioned are in Sekhukhune and Lephalale. They include towns like Burgersfort, Musina, Lephalale, Fetakgomo and Groblersdal.

Madam Speaker,

Over 12 000 houses were given to our people through the Enhanced Extended Discount Benefit Scheme programme. The purpose of this programme is to reverse the system by which our people were subjected to a 99 year lease during apartheid. We are pleased to have successfully registered these houses at the deeds offices in the names of these people, handed over title deeds and thereby giving them full ownership of these housing properties free of charge. In the next five years 17 500 housing units will be transferred to qualifying beneficiaries in this regard.

Madam Speaker,

The Department will transfer 350 housing units through the Enhanced Extended Discount Benefit Schemein the next year three years. 150 of these units will be completed in this financial year, 100 during the 2015/16 financial year and 100 in 2016/17. In addition to this, we will register and endorse 10 500 title deeds in the next three years. 3 000 of these will be done in the year under review, 3 500 in 2015/16 and 4000 in 2016/17.

Madam Speaker,

As we were implementing all these programs, we managed to create 14 074 job opportunities in the past five years through the Extended Public Works Programme. In the same breadth, we are planning to grow this figure to 16 500 by March 2017. In the province, Seventeen (17) municipalities are participating in the Community Works Program with 19 000 participants. The program is funded by National Department of Cooperative Governance and Traditional Affairs.

Madam Speaker,

Local Government is the most important sphere of government in the realisation of our quest for a developmental state which is aimed at achieving   a responsive, accountable, effective and efficient government. It is a strategic sphere of government focused on growing local economies, providing infrastructure and delivery of basic services. It is indeed one area that has to be pursued with vigour and purpose with special emphasis to service delivery, governance, financial management, infrastructure development and most importantly fighting corruption.

Madam Speaker,

As we present this budget, 86% of households have access to portable water in the province, 87% have access to electricity, 38% of households have access to sanitation and 22% have access to refuse removal. Much still has to be done Madam Speaker. Close monitoring of Water and Sanitation provision at Ward level for sustainable provision remains critical and a key area of focus.

As government, in 2009 we signed a pledge committing the three spheres of government to achieving clean audit outcomes 2014. This commitment has been hard to achieve. With the recent audit outcome report by the AG, Our municipalities have regressed and this is a matter of great concern. We have identified the challenges that gave rise to this poor performance by our municipalities.

These challenges include among others, non-compliance with Supply Chain Management processes, unauthorised, irregular, fruitless and wasteful expenditures, accounting for assets in terms of the new accounting standards which requires municipalities to account for all movable and immovable assets in their asset registers, lack of supporting documents, ineffectiveness of governance structures, and In addition, there are two (2) key transversal issues which affected all municipalities in the province, i.e., roads classification (powers and functions) and the wage curve.

Madam Speaker,

As if is not enough, Our municipalities have the highest backlogs in basic services, are financially distressed and some have the highest number of informal settlements and are under-spending on their infrastructure grant.

As at the end of May 2014 an amount of R952 million (out of R2.6 billion) remained unspent in the province where by:

• 3 municipalities have spent above 80%
• 6 municipalities have spent between 70% - 80%
• 10 have spent between 60% - 70%
• 6 have spent between 50% - 60%
• 4 have spent below 50%

Madam Speaker,

The Minister of Cooperative Governance and Traditional Affairs, Pravin Gordhan committed all of us to the implementation of what he calls the “non negotiable”, when he said “ We must all agree on a set of “non-negotiables” and commit ourselves to perform our basic responsibilities diligently’ These “non negotiables” as outlined by the Minister are :

• Put people and their concerns first;
• Cut wastage, spend public funds prudently;
• Good governance;
• Constant contact with communities;
• No failures in services – or restore with urgency;
• Hire competent staff; and
• Use Community Works Program – create job opportunities and use the programme to improve the area.

As a department responsible for providing support and oversight to municipalities in this province, we indeed have to gather and engage both the political and the administrative leadership of our municipalities on these aspects. We have to reflect on facts relating to the state of affairs in our municipalities.

Madam Speaker

I would like to take this opportunity to call upon all colleagues in our municipalities, Executive Mayors, Mayors and Councillors to join hands with us, to be relentless and work towards the implementation of all these issues as raised the Auditor-General. This is long overdue and we really can’t wait to get these implemented.

In this financial year, we will do an assessment of Municipal Performance in order to have targeted intervention in respect of capacity building, support to municipalities and monitoring and evaluation. An amount of R1.2 Million has been budgeted for this purpose.

This Madam Speaker will be done through:

• Profiling of all 30 municipalities in the province by team of experts who will give the report on the state quo, success and challenges per municipality which will help to develop a short term, medium term and long intervention mechanisms required for municipalities to stabilize and focus on their mandate to deliver basic services
• Establish provincial Response Team with necessary capacity jointly with Cooperative Governance and Traditional Affairs that will be readily available for the intervention in municipalities.
• Support the team established by president led by the Minister and the Provincial task team established by the premier on water interventions.

We have already established the Provincial Audit Outcomes Oversight IGR Forum co-chaired with the MEC for Provincial Treasury. This structure includes all five District Mayors and the twenty five Local Mayors. The primary mandate of this structure is to provide political leadership and guidance towards achieving clean audits in all municipalities. The forum compliments the Auditor General’s work on governance and financial management areas. We have a firm believe that, with all the efforts put on achieving clean audit, we will be able to overcome all these challenges.

We will be putting more efforts to ensure improved response to community complaints. This will amongst others include:

• Strengthening the client service unit in the Department,
• Effective coordination of the work of Community Development Workers in the Province and
• Maximizing the use of the Departmental toll-free number by the public.

As we do this, we will be preparing our municipalities towards planning for the next term of municipal councils, post 2016.

Madam Speaker,

The Department hosted a Traditional Leadership Indaba during the 2013/14 financial year. At this Indaba, Traditional Leaders raised and discussed common challenges affecting the Institution of Traditional Leadership and proposed to government some possible solutions. The challenges to be confronted by the department regarding the institution are amongst others the following:

• Recognition of 631 Headmen/Headwomen who could not be processed due to financial constraints
• Lack of proper offices for some Traditional Councils also due to financial constraints
• Reconstitution of Traditional Councils in terms of current legislation
• Replacement of vehicles for Traditional Leaders
• High number of disputes on traditional leadership
• Protracted legal battles on traditional leadership disputes and claims
• Full implementation of the Tools of trade

Madam Speaker,

With regard to Chieftaincy Succession Disputes, the department has since appointed a commission of enquiry (led by Commissioner Kgatla) to investigate these matters. The said commission started its work in May 2012 and is expected to complete the exercise by December 2015.The commission is currently dealing with 522 cases whose claims were lodged on or before 31 August 2010. The commission is registering progress in resolving the chieftaincy disputes and claims and we are happy to report to this august house that already 104 cases has been concluded.

In an endeavor to translate the practical steps in implementing Tools of trade for traditional leaders, the department has processed all the salary arrears for the last financial year for all traditional leaders.

We will be embarking on an aggressive programme of refurbishment and construction of offices to create a conducive working environment.An amount of R20 million has been set aside for this assignment by the Provincial Department of Public Works, Roads and Infrastructure and an additional R22.8 million which is augmented by the National Department of Cooperative Governance and Traditional Affairs as an intervention measure.

Madam Speaker,

During the 2013 Initiation School season, the department successfully coordinated a total number of 142 initiation schools in the province with an enrolment of 24 326 initiates without any death case. In the year under review, Initiation Schools commenced on the 20th of June and ended on the 18th July 2014. The scheduled dates were aimed at ensuring that the custom does not interfere with the Schools’ Learning Calendar. We received three hundred and eleven (311) applications to conduct Initiation Schools across the Province.

Of this figure, two hundred and seventy five (276) applications were approved and thirty six (36) applications were declined. We lost two initiates this year (Tshepo Makofane in the Sekhukhune District and Amos Ndlovu in Mopani District). I would like to take this opportunity to express our heartfelt condolences to the two families for the loss of their loved ones. May their souls rest in peace.

Madam Speaker,

The challenge of Illegal Initiation Schools remains with us. Together with the House of Traditional Leaders, we are confronting this challenge head-on. We hope the Limpopo Initiation Schools Bill will as well, on enactment, go a long way in addressing this challenge and in giving effect to customary and cultural practices and rituals of traditional communities as enshrined in section 31 of the Constitution of the Republic.

Madam Speaker,

The Executive Council of the province resolved in 2008 and 2010 to relocate the Community Development Workers and Traditional Affairs programme back to CoGHSTA, respectively. This decision led to the department doubling of our staff compliment from about 800 employees to over 2 000 thus tremendously increasing the Departmental wage bill. However, the two programmes continue to play a critical role in forging relations especially in public participation and Integrated Development Plans.

Madam Speaker,

The total appropriated funds for the department increased from R1, 5 billion in 2009/10 to R2, 5 billion in 2012/13. On average, the Human Settlement Development Grant constitute 60% of the total allocated funds, the remainder is distributed among compensation of employees and goods and services, in the main. Budgetary constraints negatively affect the speed with which we can deliver services to our communities. We are continuously engaging our colleagues in Treasury on this aspect and hope to find a lasting solution to this challenge.

Madam Speaker,

The Department is committed to ensure that the goal of having a developmental state is realized by addressing the capacity gaps that have negative effect on delivering quality services to our people. The department has advertised vacant posts at both Senior Management and operational levels in order to improve effectiveness and efficiency. This will go a long way in ensuring that the core mandates of the Department are realised.

Department has appointed 110 youth as interns during 2014/15 financial year as compared to 90 youth who were appointed during the previous financial year of 2013/14. This will address the challenge of youth unemployment whilst also enhancing their skills so that they could be employable.

Madam speaker,

As I move towards concluding, I would like to assure this august house that, as CoGHSTA, we will continue to work with our strategic stakeholders, partners and all of you as we build our integrated sustainable human settlements. This should be our collective responsibility. We will again shift to a higher gear in our drive to support and enable our municipalities to restore trust in local government’s capacity to deliver services to citizens.

Let me take this opportunity to thank the Portfolio Committee, my colleagues in the Executive Council led by the Premier, Members of the Legislature, Municipal Mayors and all Councillors, as well as Traditional leaders for their continued unwavering support to the department. Together we surely can move this province forward.

My gratitude goes to the Acting Head of Department, the Executive Management and the entire staff for the sterling work and hard work put in everyday they report for work. We are in the right direction and we must not lose the momentum.

Madam Speaker,

I therefore table the 2014/15 budget for the Department of Cooperative Governance, Human Settlements and Traditional Affairs.

I thank you.

Budget for 2014/15 and the MTEF

Summary of payments and estimates: Co-operative Governance, Human Settlements and Traditional Affairs.

R thousand	2010/11	OUTCOME 2011/12	2012/13	Main appropriation	Adjusted appropriation	Revised estimate	Medium-term    estimates
				2013/14			2014/15	2015/16	2016/17
Programme 1: Administration*	221,521	242,382	249,609	284,652	264,084	264,084	270,343	282,911	298,253
Programme 2: Human Settlements	1,341,461	1,254,235	1,278,275	1,421,863	1,421,955	1,421,955	1,322,528	1,311,957	1,446,348
Programme 3: Co-operative Governance	324,792	220,085	224,543	215,064	234,264	234,264	239,396	262,045	281,208
Programme 4: Traditional Institutional Development	182,957	200,408	372,101	310,046	312,690	312,690	325,766	338,304	351,941
Total payments and estimates	2,070,731	1,917,110	2,124,528	2,231,625	2,232,993	2,232,993	2,158,033	2,195,217	2,377,750
Less:   Unauthorised expenditure Baseline available for spending	4,575	3,075	2,294	-	-	-	-	-	-
	2,066,156	1,914,035	2,122,234	2,231,625	2,232,993	2,232,993	2,158,033	2,195,217	2,377,750

 

Summary of payments and estimates by econ class: Co-operative Governance, Human Settlements and Traditional Affairs

 

OUTCOME				Main appropriation	Adjusted appropriation	Revised estimate	Medium-term    estimates
R thousand	2010/11	2011/12	2012/13	2013/14			2014/15	2015/16	2016/17
Current   payments Compensation of employees Goods and services Interest and rent on land Transfers and subsidies to: Provinces and municipalities Departmental agencies and accounts Non-profit institutions Households Payments for capital assets Machinery and equipment Payments for financial assets	677,609	726,685	917,662	887,734	884,081	884,081	924,764	982,613	1,037,430
	512,726	565,859	753,498	733,258	713,258	713,258	763,429	809,026	859,995
	164,878	160,826	164,164	154,476	170,823	170,823	161,335	173,587	177,435
	5	-	-	-	-	-	-	-	-
	1,370,119	1,179,257	1,198,558	1,335,848	1,340,630	1,340,630	1,230,802	1,211,749	1,339,662
	93,642	3,944	1,529	1,806	1,936	1,936	2,239	1,228	2,462
	-	-	6	-	1,842	1,842	-	1,120	-
	-	-	3,512	3,850	3,350	3,850	4,096	4,301	4,516
	1,276,477	1,175,313	1,193,511	1,330,192	1,333,502	1,333,002	1,224,467	1,205,100	1,332,684
	22,722	11,168	6,931	8,043	8,282	8,282	2,467	855	658
	22,722	11,168	6,931	8,043	8,282	8,282	2,467	855	658
	281	-	1,377	-	-	-	-	-	-
Total economic classification	2,070,731	1,917,110	2,124,528	2,231,625	2,232,993	2,232,993	2,158,033	2,195,217	2,377,750
Less:   Unauthorised expenditure Baseline available for spending	4,575	3,075	2,294				-		-
	2,066,156	1,914,035	2,122,234	2,231,625	2,232,993	2,232,993	2,158,033	2,195,217	2,377,75