Houses of horror - RDP housing projects corruption disappearance of millions intended for housing for the poor.
HIGH-RANKING Sundays River Municipality officials have been implicated in an extensive web of alleged corruption involving the disappearance of millions of rands intended for housing for the poor.
Allegations of gross mismanagement and fraud relating to four key RDP housing projects – for which more than R100-million was set aside in the once-thriving municipality – have been laid bare after a Herald investigation that was triggered by a government-initiated forensic audit in the newspaper’s possession.
So crippling has the alleged corruption been that the municipality’s accounts have been frozen.
The provincial administration has revoked its responsibility for any projects involving large sums of money, such as housing delivery, while it is placed under administration until it becomes functional again.
Government sources say arrests are imminent.
Tens of millions of rands have been paid to builders who were never authorised to become contractors on the RDP developments and who failed to complete the projects, while key officials have been accused of entering into “corrupt relationships” with councillors and their relatives by awarding them lucrative RDP home building contracts.
Top officials and councillors have also been accused of contravening the Municipal Finance Management Act by allegedly profiting from municipal building tenders – which they are accused of influencing for their own benefit – by awarding them to their families or companies they have shares in.
They, in turn, upped and left after completing only half the work.
Authorities are also trying to recoup up to R8-million which “vanished” from municipal coffers. The Herald has learnt the money was paid to contractors – who were never given the official municipal approval to work on the various developments – from a municipal account accessed by someone using the password of a former chief financial officer.
The projects at the centre of the cash scandal include those in Enon and Bersheba and Moses Mabhida in Kirkwood to which the Housing Department respectively granted R26.5-million to build 450 homes, and R45.7- million for 750 houses.
In Addo, a project in Nomathamsanqa township was granted R18-million for 300 RDP houses, while a stone’s throw away in Noluthando, R28-million was released for the building of 801 homes.
The projects, began between 2006 and mid-2008, should have been completed by now, but have ground to a halt. The Herald found hundreds of half-built homes throughout all four projects.
The figures are contained in a continuing forensic audit by the Housing Department, a report on which is in The Herald’s possession.
An inspection by the newspaper of the four housing projects revealed none were complete, with several hundred homes either half-built or mere shells with no piping or internal finishes such as ceilings. In many cases, houses lucky enough to have roofs did not have water or electricity or connection to sewerage pipes, effectively forcing the occupants to be reliant on a bucket system.
At least four councillors, two top municipal officials and several private contractors – some of whom are family of the councillors – are being probed in forensic investigations by the Special Investigations Unit (SIU), known as the Cobras, as well as the Housing and provincial Local Government and Traditional Affairs departments.
The Herald has learnt that the East London-based SIU – which two weeks ago seized and copied the hard drives of the municipality’s computers as part of its probe – has passed on its findings to the Directorate for Priority Crime Investigation, known as the Hawks.
Hawks spokesman Musa Zondi confirmed yesterday that the police unit was looking into three investigations regarding the municipality.
Former acting municipal manager Lungiswa Roji has also been suspended and is understood this week to be facing a disciplinary hearing for allegedly turning a blind eye to major irregularities by councillors and officials implicated in the scandal.
In March, Local Government MEC Sicelo Gqobana placed the Sundays River Municipality under administration and sent in Vuyo Zitumani as acting municipal manager to solve all the problems which had crippled delivery in the area.
Zitumani acted in a similar capacity in 2007 when she was made acting municipal manager of Mthatha for nine months.
Sources close to the businesswoman said she was shocked at the level of corruption within the municipality when she arrived four months ago.
“When it comes to officials (found to be corrupt), we will be hard on them,” said Zitumani, who yesterday refused to disclose the names of those implicated in the various probes.
“There are serious allegations which the SIU has reported to the MEC,” she said.
“We want to wrap up the investigations as soon as possible. The communities want to see action and are very eager to see an outcome.”
Zitumani said the area’s housing development status – allowing the municipality to oversee developments – had been revoked and was now in the hands of the provincial department.
She has also cancelled five housing tenders which were awarded irregularly.
Keywords - RDP, housing, housing for the poor, housing tenders, Municipality officials, corruption, millions, corrupt, builders, contractors, RDP developments, Top officials, councillors, human settlements, Housing Department, Local Government, MEC Sicelo Gqobana
Showing posts with label contractors. Show all posts
Showing posts with label contractors. Show all posts
NHBRC has ordered the rebuilding of more than 700 RDP houses
RDP housing hiccups - NHBRC has ordered the rebuilding of more than 700 RDP houses
THE National Home Builders’ Registration Council (NHBRC) has ordered the rebuilding of more than 700 RDP houses in Ilinge after an assessment conducted by the council identified defects allegedly due to shoddy work by the building contractors.The council, which is responsible for protecting the interests of housing consumers and regulating the home building industry, was appointed by the provincial Housing Department to look into Ilinge’s RDP houses.A rectification programme was initiated after the council found defects, ranging from loose and/or leaking roofs, doors and windows not properly fitted, visible cracks and poor sanitation, in most of the homes.A new contractor has been entrusted with the rebuilding of the houses as part of the programme. During a recent visit by The Rep to the area, some residents criticized the move as a waste of government funds. Resident and member of the Ilinge housing joint management committee Mangele Mali said over 1 215 RDP houses worth R23 million had initially been constructed as part of a housing project approved in 2001.“Around 399 houses were initially put on the rectification programme by the NHBRC, but it was later discovered that there were more houses which had serious defects, bringing the number to 700. We believe that the problem was the theft of building supplies resulting in contractors resorting to using whatever was left to complete houses.” Fellow committee member Michael Khalipha blamed the situation on Lukhanji municipality and the Housing Department’s failure to provide inspectors to check up on the work.Khalipha claimed this week that the contractor appointed to carry out the rectification programme had allegedly absconded without finishing the project.The Rep was also told by a source that one of the project’s initial contractors was amongst contractors honoured by the department during the Govan Mbeki provincial Housing Awards in Queenstown last year. Lukhanji municipality spokesman Mkhululi Titi confirmed that 700 houses in Ilinge had been found with defects following an investigation on complaints of shoddy work done on RDP housing projects in the Eastern Cape.He said the municipality and the department could not conduct inspections as the contractor had to close for the December holidays.“There were challenges involving the NHBRC and the contractor doing the repairs. We are expecting the company to invite us and the department for inspection of the completed work. We are not able to comment on other issues at this stage,” Titi said.NHBRC rectification programme manager Mohau Tsiki this week described Ilinge as a “unique” situation as most of the houses needed to be demolished and rebuilt while others needed repairs. He said an assessment carried out by the council’s inspectorate had identified that most of the RDP houses were sub-standard. A total of R3,4 million had been set aside for the programme in Ilinge. Provincial Housing spokesman Lwandile Sicwetsha said 96 houses were under construction while 35 were nearing completion. No completed house had passed inspection yet. He said 301 houses were not part of the current rectification process and would be dealt with in the 2009/10 financial year. The final inspection would be conducted by the beneficiaries, department, NHBRC, Lukhanji municipality and the consultants.
THE National Home Builders’ Registration Council (NHBRC) has ordered the rebuilding of more than 700 RDP houses in Ilinge after an assessment conducted by the council identified defects allegedly due to shoddy work by the building contractors.The council, which is responsible for protecting the interests of housing consumers and regulating the home building industry, was appointed by the provincial Housing Department to look into Ilinge’s RDP houses.A rectification programme was initiated after the council found defects, ranging from loose and/or leaking roofs, doors and windows not properly fitted, visible cracks and poor sanitation, in most of the homes.A new contractor has been entrusted with the rebuilding of the houses as part of the programme. During a recent visit by The Rep to the area, some residents criticized the move as a waste of government funds. Resident and member of the Ilinge housing joint management committee Mangele Mali said over 1 215 RDP houses worth R23 million had initially been constructed as part of a housing project approved in 2001.“Around 399 houses were initially put on the rectification programme by the NHBRC, but it was later discovered that there were more houses which had serious defects, bringing the number to 700. We believe that the problem was the theft of building supplies resulting in contractors resorting to using whatever was left to complete houses.” Fellow committee member Michael Khalipha blamed the situation on Lukhanji municipality and the Housing Department’s failure to provide inspectors to check up on the work.Khalipha claimed this week that the contractor appointed to carry out the rectification programme had allegedly absconded without finishing the project.The Rep was also told by a source that one of the project’s initial contractors was amongst contractors honoured by the department during the Govan Mbeki provincial Housing Awards in Queenstown last year. Lukhanji municipality spokesman Mkhululi Titi confirmed that 700 houses in Ilinge had been found with defects following an investigation on complaints of shoddy work done on RDP housing projects in the Eastern Cape.He said the municipality and the department could not conduct inspections as the contractor had to close for the December holidays.“There were challenges involving the NHBRC and the contractor doing the repairs. We are expecting the company to invite us and the department for inspection of the completed work. We are not able to comment on other issues at this stage,” Titi said.NHBRC rectification programme manager Mohau Tsiki this week described Ilinge as a “unique” situation as most of the houses needed to be demolished and rebuilt while others needed repairs. He said an assessment carried out by the council’s inspectorate had identified that most of the RDP houses were sub-standard. A total of R3,4 million had been set aside for the programme in Ilinge. Provincial Housing spokesman Lwandile Sicwetsha said 96 houses were under construction while 35 were nearing completion. No completed house had passed inspection yet. He said 301 houses were not part of the current rectification process and would be dealt with in the 2009/10 financial year. The final inspection would be conducted by the beneficiaries, department, NHBRC, Lukhanji municipality and the consultants.
Sexwale maps out a 'beyond housing' vision
Housing is not just about building houses. It is also about transforming our residential areas and building communities with closer access to work and social amenities, including sports and recreation facilities,” proclaimed President Jacob Zuma during his state-of-the-nation address.The concept of human settle- ments may be a new one for many South Africans, yet it has been part of the global developmental lexicon for many years, having been adopted at the United Nations Global Habitat Summit, in Vancouver, Canada, in 1976. It gained ground at another United Nations conference – the World Summit on Sustainable Development, held in Johannesburg, in 2002.The concept was taken up at the landmark fifty-second national conference of the African National Congress, in Polokwane, in 2007, where several resolutions committed the new government to the promotion of human settlements and the building of cohesive, sustainable and caring communities.Proponents argue that it harks back to the Freedom Charter appeal for “ houses, security and comfort for all” – the historical document adopted 54 years ago, at the Congress of the People, is now very much back in vogue within the governing party, with a number of its other tenets, including nationalisation, being redebated.Human Settlements Minister Tokyo Sexwale, who has returned to politics from years in business, has also seemingly embraced the Charter’s spirit, but has added some flesh to its bones. He told Parliament during his Budget Vote speech, last month, that slums must be demolished and new suburbs built where “all shall have transport, roads, lighting, playing fields, crèches and social centres”.“Our task in terms of government’s Medium-Term Strategic Framework is clear: to restore humanity and dignity, to address spatial inequalities and to provide comfort and security for all,” he added.This would be achieved through the planning and building of human settlements in an integrated, coordinated and holistic way. “These must be places where people can play, stay and pray. They should be green, landscaped communities and pleasant places where people live, learn and have leisure.”However, this, observers believe, requires a new approach, a shift “beyond housing”. And the change of name from ‘Housing’ to ‘Human Settlements’ is, therefore, meant to reflect this change of mindset.But, arguably, it is also going to require a change in resource allocation and an upscaling of the budget. Expenditure on housing service delivery has increased from R4,8-billion in the 2004/5 financial year to R10,9-billion in the last financial year, increasing at an average annual rate of 23%.Nationally, over 570 housing projects have been approved and a housing grant of R12,4-billion has been allocated for this financial year for expenditure on the construction of 226 000 housing units across all nine provinces.Although the housing grant allocation has been increased over the 2009 Medium-Term Expenditure Framework period, previous studies by the department concluded that continuing with the current trend in the housing budget would lead to a funding shortfall of R102-billion by 2012, which could increase to R253-billion by 2016, which is of great concern.“We remain concerned about houses that are reportedly standing empty, especially in the light of the huge demand for housing of almost 2,2- million units. We have taken cognisance of the need for housing in urban pressure points around the country and are in the process of responding to this with alter-native tenure options, including affordable rental housing stock,” Sexwale said.SOCIAL AND ECONOMIC AMENITIESBut how are these changes being perceived outside the department? In a telephone interview with Engineering News, Human Settlements Portfolio Committee chairperson Beauty Dambuza says that government is moving away from building houses to “building communities”.“Government is trying to inculcate the culture where the structure of the house built must include social and economic amenities,” assures Dambuza.She reiterates that, in reversing the spatial developmental plans created by the apartheid system, government has provided more than two-million houses. However, unintended consequences have arisen, as most of the settlements are far away from socioeconomic activity areas, owing to a number of challenges. This has contributed to placing people at the periphery because suitable and well-located land for human settlements is in the hands of the private sector.Dambuza says it is worth noting that, in 2004, government made a shift from the Reconstruction and Development Programme (RDP) because it focused too much on quantity rather than quality, owing to the housing demand. Indeed, many of the houses built from 1994 to 2004 have defects, with some estimating that the cost of fixing these will run into billions of rands.In response, a comprehensive plan for the provision of human settlements in an inte- grated, sustainable and qualitative manner was adopted. But, owing to insufficient resources and a lack of coordination between national and provincial priorities, government has fallen well short of its aims.“This term, the President has introduced the Planning Ministry and the National Planning Commission, which, we hope, will ensure that planning is done in a well-coordinated manner,” Dambuza says.But there is also no question that more resources will be required to achieve the department’s goals, given that the current top-structure subsidy does not cover the much-needed bulk infrastructure and that the Municipal Infrastructure Grant (MIG) is limited to specific programmes.“We agree that there has been a significant increase in our budget for the past five financial years; [however], because of increased demand, as a result of, besides others, population growth causing strain on the budget . . . we sit with a backlog of 2,2-million houses.”The portfolio committee has also consulted with the department to ensure that, this financial year, it deals with the issue of repairing the defects in some houses and the issue of blocked projects.Also envisaged is an economies-of-scale approach to improving the affordability of materials, while increasing the use of labour and crowding in skills development.POOR QUALITYReacting to reports that small contractors build substandard structures, Dambuza says that the committee’s view is that not all emerging contractors build poor-quality houses.“There are some who do that and that is totally unacceptable; however, we will give ourselves time to organise a summit and invite them to try to understand their challenges.“We are aware that some of the problems involve the bidding process, a lack of funding and the fact that there is no profit in affordable housing and that big developers [are not] interested in government-subsidised schemes. But we also need to recognise and encourage entrepreneurship, as we strongly believe that it is the primary driver of economic growth and development in any developing country, while a competitive developmental and transformed construction industry and related services that deliver value to society and complements programmes are initiated.”Dambuza concedes that government cannot act alone to solve all the human settlements challenges, but that it needs the private sector, nongovernmental organisations and financial institutions to assist in building houses.“We know that the private sector can provide credit for our people, but we have to ensure that we engage with financial institutions, particularly with respect to their high interest rates, which have ended up putting our people in huge debt.”She adds that a dynamic and enabling environment for investment is the basis for sustainable development and poverty alleviation.The human settlements programme promotes the development of communities with increased access to productive resources, public services and institutions, affordable transport, land and employment opportunities.“A human settlement is a labour-based infrastructure development that can make an important contribution to measures to [deal with] unemployment. The integrated infrastructure provision also assists in driving rural, urban and human settlement development, facilitated by an enhanced strategy for land acquisition, including the acquisition of strategically located and developed sites in urban households, as well as in rural areas, through the disposal of State-owned land . . . and the Housing Development Agency has been established to acquire land for human settlements.”BEYOND HOUSINGGeorgia Institute of Technology School of Civil and Environmental Engineering professor and visiting research and innovation chair at Tshwane University of Technology (TUT) Mulalo Doyoyo tells Engineering News that the change from ‘Housing’ to ‘Human Settlements’ is “appropriate because it is beyond housing and talks to a lot of other issues, such as job creation and the livelihood of the environment within which the houses are built”.Doyoyo argues that, to ensure that the name change is linked to delivery, one needs to guarantee the involvement of centres of excellence around the human settlements problem and to put together a team of experts in order to create more sustainable housing, besides taking advantage of renewable-energy sources and all types of innovative technologies. This scenario entails not just structures, but is also concerned with saving money and coming up with innovative ideas for waste treatment and water purification.He cites the top challenges for the Human Settlements Department as slashing the housing backlog; dealing with the poor quality of houses and the homogeneity of the buildings; thinking beyond structures by introducing technologies that can save money for the people; and finding the right experts in the built environment – including those at the Council for Scientific and Industrial Research and at all universities in the country – and assembling a team that will focus on technology for human settlements.Doyoyo explains that, in response to all these challenges, the Department of Science and Technology has donated R3,5-million as seed funding for the implementation of the initial phase of the Retecza Initiative, which will focus on human capital development.TUT is the leading university of technology in this initiative to alleviate poverty in the country.Retecza is an academia–industry–public initiative to tackle the problems of poverty and livelihood in South Africa through a vibrant culture of cutting-edge research, innovation and technology-concept development, leading to commercialisation within a paradigm of research demonstration and implementation.“We have created Retecza to build autonomous and sustainable villages for people, focusing on next-generation energy supply, green building and construction, as well as next-generation transportation and technology concept centres,” Doyoyo concludes.ECONOMIC STIMULIIn the last few years, especially since the introduction of the department’s Breaking New Ground strategy, there has been a shift away from viewing a subsidised house as an economic asset for the poor.“A house is an economic asset if it can be invested in, improved and sold in order for one to move up the housing ladder into better accommodation, or if the house serves as an asset [so that] its owner is able to borrow against it.However, leveraging or selling a home is often made impossible because formal transactions require the occupant to have an official title deed,” says PDG consultant Alison Hickey-Tshangana.She adds that one of the main issues is that, in the rush for housing service delivery since 1994 (with emphasis on quantity), many beneficiaries have not yet received title deeds, meaning that the house can only be sold informally and that its value as an economic asset is undermined.From the perspective of housing beneficiaries, municipalities can use subsidised housing developments as an economic stimulus, if they ensure that title deeds are promptly granted to beneficiaries.“A human settlement is an economic stimulus when two conditions are met. Firstly, the human settlement must integrate amenities, businesses and services, instead of simply installing rows of RDP homes. Secondly, in order to be an economic stimulus, municipalities must plan new human settlements in well-located areas, such as next to city centres or within fair reach of public transport. This enables residents to be linked to jobs, services and shops without spending large portions of their income on transport costs,” notes Hickey-Tshangana.The shift to human settlements may see an integration of bulk service delivery with housing delivery. To date, MIG has been administered by the former Department of Provincial and Local Government, with housing funding flowing to the provinces and onto municipalities through the former national Department of Housing.As a result, a number of municipalities were frustrated by the lack of alignment between these funding streams because there was an obvious link: without proper bulk infrastructure in place, a new housing project would not be approved. A municipality might have had the housing funds, but lacked the MIG funding to install the infrastructure, which had to precede the housing construction.“If the recent restructuring turns out to include a shift of the MIG to the Department of Human Settlements, then this could have a positive impact in terms of enabling these two funding streams to be better coordinated, thus reducing bottlenecks.”Hickey-Tshangana emphasises that the key is the coordination of funding streams and properly integrated planning, which require coordination across spheres.She remarks that one of the issues outside the metropolitan municipalities is that smaller municipalities are often starved of information from national and provincial departments about planned investments in their areas.“Municipalities must have the information on where schools, hospitals and police stations are planned, so that this can be incorporated in the Integrated Development Plan and into integrated housing plans. Integrated human settlement, practically speaking, means including social services and bulk services in housing [developments].Social services are administered at provincial level, bulk services are administered at national and local levels, and housing planning [takes place] at local level and is approved at provincial level.”Hickey-Tshangana suggests that there is a need to shift away from a single housing product model : the give-away standalone house. Instead, there is a need to concentrate on providing government support to directly supply and indirectly intervene with the private sector to increase the supply of other housing products (affordable rental, multistorey units, wendy houses in backyards, serviced sites) and other financing instruments (subsidised loans).She affirms that PDG believes that the task is achievable if one thinks more creatively in terms of housing products and delivery instruments for demand-side interventions, such as housing vouchers, instead of remaining locked in our stale supply-side approach, which is incapable of making a dent in the backlog.
Big business at human settlements
Big business at human settlements
What Housing Settlements Minister Tokyo Sexwale said in his departmental budget speech yesterday was not particularly revolutionary, but the way he said it was unfamiliar.
Sexwale used the language of corporate finance to describe the role of his department, saying that its ability to draw “the unbanked” and “uncreditworthy” into the formal economy by providing them with capital assets would play a key role in developing South Africa’s poorest citizens, as well as boosting the nation as a whole.
He also argued that housing and human settlements are, more directly, an extremely powerful “economic multiplier”, because of the stimulus given to a massive range of businesses when houses are built and when people set up new homes.
Sexwale said he would continue working closely with big business, particularly banks, who he said could be persuaded to go the extra mile beyond Corporate Social Investment because of the importance of these partnerships to the development of South Africa’s economy. He affirmed that “consultation will be the golden thread that runs through this administration”, that he had sat with big business and knows what they are doing, and that he would remain “a student”.
Sexwale sounded a cautious note about the future, saying that the global financial crisis means South Africa must be prepared to handle potential budget cuts, and that rapidly increasing urbanisation was a global reality that cannot be ignored.
He also spoke out against poorly-run or fly-by-night SMME contractors who, he said, have a tendency to “never stop emerging” because they don’t do proper business, confusing revenue with profit and capital with wealth. “Government needs value for money,” he stated.
Other speakers described the finalising of the Rural Housing Subsidy Vouchers, the Housing Development Agency and the continuation of the Breaking New Ground programme, while some called for national policies on hostel and backyard dwellers.
There was frequent mention of the need for better quality housing that was more energy efficient, and the Deputy Minister said more inspectors were being trained to ensure housing was up to standard.
While other speakers haggled over the progress made in the Breaking New Ground (BNG) programme’s flagship N2 Gateway project, Sexwale made it clear that he didn’t want to argue about things like the semantics of a new name, but would focus on getting to business.
Speaking the solution that moladi has proposed for the last 20 years
What Housing Settlements Minister Tokyo Sexwale said in his departmental budget speech yesterday was not particularly revolutionary, but the way he said it was unfamiliar.
Sexwale used the language of corporate finance to describe the role of his department, saying that its ability to draw “the unbanked” and “uncreditworthy” into the formal economy by providing them with capital assets would play a key role in developing South Africa’s poorest citizens, as well as boosting the nation as a whole.
He also argued that housing and human settlements are, more directly, an extremely powerful “economic multiplier”, because of the stimulus given to a massive range of businesses when houses are built and when people set up new homes.
Sexwale said he would continue working closely with big business, particularly banks, who he said could be persuaded to go the extra mile beyond Corporate Social Investment because of the importance of these partnerships to the development of South Africa’s economy. He affirmed that “consultation will be the golden thread that runs through this administration”, that he had sat with big business and knows what they are doing, and that he would remain “a student”.
Sexwale sounded a cautious note about the future, saying that the global financial crisis means South Africa must be prepared to handle potential budget cuts, and that rapidly increasing urbanisation was a global reality that cannot be ignored.
He also spoke out against poorly-run or fly-by-night SMME contractors who, he said, have a tendency to “never stop emerging” because they don’t do proper business, confusing revenue with profit and capital with wealth. “Government needs value for money,” he stated.
Other speakers described the finalising of the Rural Housing Subsidy Vouchers, the Housing Development Agency and the continuation of the Breaking New Ground programme, while some called for national policies on hostel and backyard dwellers.
There was frequent mention of the need for better quality housing that was more energy efficient, and the Deputy Minister said more inspectors were being trained to ensure housing was up to standard.
While other speakers haggled over the progress made in the Breaking New Ground (BNG) programme’s flagship N2 Gateway project, Sexwale made it clear that he didn’t want to argue about things like the semantics of a new name, but would focus on getting to business.
Speaking the solution that moladi has proposed for the last 20 years
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