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 millions. Show all posts
Showing posts with label millions. Show all posts
R100m housing fiasco - 470 houses are uninhabitable
R100m housing fiasco - 470 houses are uninhabitable: "R100m housing fiasco
Only four houses make the grade
May 30, 2010 10:33 PM By SIPHO MASONDO
More than R100-million has been spent on two massive housing projects in North West - but there are only four low-cost government homes to show for the money."
On the outskirts of Vryburg, near the Northern Cape border, the provincial government spent more than R86-million on building 470 houses, but only four have been satisfactorily completed.
Three hundred of the houses are uninhabitable - their foundations and walls do not conform to specifications and building standards.
The remaining 166 houses are being checked.
Vryburg's town manager, George Mthimunye - sent to administer the town in July by Co-operative Governance Minister Sicelo Shiceka and North West human settlements MEC Desbo Mohono - has ordered that the defects be corrected.
Vryburg municipality is now partially administered by the provincial government
About 300km away in Meriting extensions 3 and 4, in Rustenburg, the government spent more than R28-million on 1930 low-cost houses. But they were so shoddily built that they will have to be demolished.
Mthimunye said: "The foundations [of the Vryburg houses] are faulty, some of them are half-built and some are built up to roof level. But most, if not all, have defects according to a report I got from our building inspector."
Mthimunye said Khasu Engineering, which was contracted to deliver 3000 houses by the end of July, is taking the municipality to court, claiming that R4.7-million is owed to it.
This, Mthimunye said, is despite the fact that he discovered that Khasu was "erroneously overpaid" by R27-million.
He said he had given the company an ultimatum to fix the 300 houses by December 15, but Khasu had refused.
"They say they will only correct the [defective] houses at the end of the project," he said.
This, Mthimunye said, was unlikely to happen as Khasu had not been on site since October, claiming there was no money left to continue with the project.
"It's a major headache for me. I will terminate the contract and get a new company, and see how many houses we can get from the remaining money.
"We will have to look for another contractor, which will demand more money. We are starting the project afresh, two years down the line," Mthimunye said.
A government house costs R55000 to build, according to the department of human settlements website.
Mthimunye said the contract with Khasu was flawed from the start because it was not put out to tender. It was awarded in 2007.
The company was awarded the contract by the former municipal administration, which allegedly flouted procurement procedures.
As a result, Mthimunye said, he asked the National Prosecuting Authority's special investigation unit to investigate.
But the Vryburg municipality's council is far from delighted that the investigation has begun.
"There is no support. In fact, I am a problem to the council itself. Last week, they took a resolution that we must pay [Khasu the R4.7-million it claims]. They said if I don't pay, I will be in defiance and I will be charged," he said.
At least one councillor has threatened to charge Mthimunye with insubordination if he does not pay Khasu speedily.
"I told her to do as she pleases because I won't pay."
When The Times approached Khasu general manager Christo van Niekerk, he refused to comment, saying the case was sub judice.
Meanwhile, in Rustenburg, "not a single house has been completed" by another housing contractor.
"Something went terribly wrong. Along the way the [Rustenburg] municipality realised that the work was not of good quality. They were stopped, and the contractor took them to court," said Mohono, who was not able to identify the contractor.
"All the 1930 structures and the foundations will have to be destroyed. We have huge problems with almost all housing projects. The municipality must try to recoup the money."
Henry Hartley, a DA councillor in Rustenburg, said the builder had been paid about R28-million of the R45-million contract for 1950 low-cost homes.
"It is unsafe for any human being to occupy those houses, whether completed or not.
"We will now need about R71-million to rectify all the houses. The whole thing will have to be redone," he said.
Human Settlements Minister Tokyo Sexwale last year said that it would cost R1.3-billion to rebuild houses that had been poorly built.
About 3000 of such houses were in North West and Eastern Cape
Question: How can any decent/reputable contractor ever compete with people like this? They are thieves
Only four houses make the grade
May 30, 2010 10:33 PM By SIPHO MASONDO
More than R100-million has been spent on two massive housing projects in North West - but there are only four low-cost government homes to show for the money."
On the outskirts of Vryburg, near the Northern Cape border, the provincial government spent more than R86-million on building 470 houses, but only four have been satisfactorily completed.
Three hundred of the houses are uninhabitable - their foundations and walls do not conform to specifications and building standards.
The remaining 166 houses are being checked.
Vryburg's town manager, George Mthimunye - sent to administer the town in July by Co-operative Governance Minister Sicelo Shiceka and North West human settlements MEC Desbo Mohono - has ordered that the defects be corrected.
Vryburg municipality is now partially administered by the provincial government
About 300km away in Meriting extensions 3 and 4, in Rustenburg, the government spent more than R28-million on 1930 low-cost houses. But they were so shoddily built that they will have to be demolished.
Mthimunye said: "The foundations [of the Vryburg houses] are faulty, some of them are half-built and some are built up to roof level. But most, if not all, have defects according to a report I got from our building inspector."
Mthimunye said Khasu Engineering, which was contracted to deliver 3000 houses by the end of July, is taking the municipality to court, claiming that R4.7-million is owed to it.
This, Mthimunye said, is despite the fact that he discovered that Khasu was "erroneously overpaid" by R27-million.
He said he had given the company an ultimatum to fix the 300 houses by December 15, but Khasu had refused.
"They say they will only correct the [defective] houses at the end of the project," he said.
This, Mthimunye said, was unlikely to happen as Khasu had not been on site since October, claiming there was no money left to continue with the project.
"It's a major headache for me. I will terminate the contract and get a new company, and see how many houses we can get from the remaining money.
"We will have to look for another contractor, which will demand more money. We are starting the project afresh, two years down the line," Mthimunye said.
A government house costs R55000 to build, according to the department of human settlements website.
Mthimunye said the contract with Khasu was flawed from the start because it was not put out to tender. It was awarded in 2007.
The company was awarded the contract by the former municipal administration, which allegedly flouted procurement procedures.
As a result, Mthimunye said, he asked the National Prosecuting Authority's special investigation unit to investigate.
But the Vryburg municipality's council is far from delighted that the investigation has begun.
"There is no support. In fact, I am a problem to the council itself. Last week, they took a resolution that we must pay [Khasu the R4.7-million it claims]. They said if I don't pay, I will be in defiance and I will be charged," he said.
At least one councillor has threatened to charge Mthimunye with insubordination if he does not pay Khasu speedily.
"I told her to do as she pleases because I won't pay."
When The Times approached Khasu general manager Christo van Niekerk, he refused to comment, saying the case was sub judice.
Meanwhile, in Rustenburg, "not a single house has been completed" by another housing contractor.
"Something went terribly wrong. Along the way the [Rustenburg] municipality realised that the work was not of good quality. They were stopped, and the contractor took them to court," said Mohono, who was not able to identify the contractor.
"All the 1930 structures and the foundations will have to be destroyed. We have huge problems with almost all housing projects. The municipality must try to recoup the money."
Henry Hartley, a DA councillor in Rustenburg, said the builder had been paid about R28-million of the R45-million contract for 1950 low-cost homes.
"It is unsafe for any human being to occupy those houses, whether completed or not.
"We will now need about R71-million to rectify all the houses. The whole thing will have to be redone," he said.
Human Settlements Minister Tokyo Sexwale last year said that it would cost R1.3-billion to rebuild houses that had been poorly built.
About 3000 of such houses were in North West and Eastern Cape
Question: How can any decent/reputable contractor ever compete with people like this? They are thieves
RDP housing projects - Where is the money?
RDP housing projects - Where is the money? : "Michael Sutcliffe"
Just three weeks after receiving R30-million from the eThekwini municipality, high-flying Durban couple S'bu and Shawn Mpisane have halted the completion of RDP housing projects in Umlazi, apparently because they have no money to continue the work.The R30m paid in December was part of a series of electronic payments amounting to about R219 million, which the company received from eThekwini last year.The last payment of R4 785 720 was made on December 14, two weeks before their A-list, bling party on New Year's Eve.
That's when the big-spending former metro officer and his politically connected wife dazzled friends at their luxurious La Lucia home.Top-end whiskies and champagne flowed, while they splurged on special thrones and showed off their new Rolls-Royce. Guests included national police commissioner Bheki Cele.
While Shawn Mpisane, daughter of the late ANC local councillor Dumazile Flora Mkhize, is the one who was granted the Umlazi housing contract, it is her husband, Wiseman Sibusiso (S'bu), who has been the focus of media attention. While working as a metro police constable, with a salary of less than R15 000 a month, Mpisane raised eyebrows by arriving at work in a Lamborghini and living in a R17 million mansion.This week, he made headlines of a different kind when The Mercury's news editor, Philani Makhanya, laid a complaint of intimidation against him. The alleged intimidation came after Mpisane became aware The Mercury was investigating his affairs.
On Monday, workers of Shawn Mpisane's Zikhulise Cleaning, Maintenance and Transport company (constructing homes?), as well as those employed by sub-contractors, in Umlazi, were told to go home because the company allegedly had no money to continue their work.An estimated 1 300 people, many from Umlazi, and their families have been affected, according to Ward 79 councillor Sthenjwa Nyawose.Mpisane had told him her company had received no money from the municipality since October. Despite repeated attempts to interview Shawn Mpisane, she failed to return calls to The Mercury as promised.As a result of the job and housing uncertainty, Nyawose described the situation in the township as "volatile but calm"."We are very angry, the councillors of Umlazi are fuming," he said. "As we speak, the project is not going on because the contractor has not been paid. The problem is the municipality is not coming up with the money."Contradicting this, however, documentary records in The Mercury's possession indicate that more than R50 million was paid by the municipality to Zikhulise in November and December.Municipal manager Michael Sutcliffe confirmed a total of "around R300 million" had been paid to Zikhulise over 18 months and said the project had been completed in mid-December.The project involved building low-cost cost RDP houses on 4 500 sites in Umlazi B10, KwaMgaga and Umlazi Infill.The Mercury has documentary proof that a total of R219 930 939 was electronically transferred from eThekwini to Zikhulise in 2009. In December alone, four payments totalling about R30 million were made. Nyawose said thousands of houses were still under construction or to be built in Umlazi, contradicting Sutcliffe's statement that all work had been completed.Sutcliffe explained that some funding was usually paid in advance. "Contractors submit claims based on work done; the city's professional team verify that and if such work has been done, payments are then made," he said.Like Nyawose, Sutcliffe confirmed that the development was initially a provincial project which the municipality was asked to take over. "In August, 2006, eThekwini municipality resolved to take over the project and become the developer and further agreed that the professional team and contractors... be kept for the duration of the project."But just months after construction, some of the houses were crumbling, The Mercury established during a field trip. The houses were not plastered or painted. Some had no toilets, taps, baths or showers. An eight-member family living in a leaking, three-roomed house said their biggest concern was how they would eat. Only two members of the family were employed, one by Zikhulise and the other by one of its sub-contractors. "Eish, school has started and we can't take the children to school because we have no money," said one woman. Another angry man said the houses were of a poor quality because workers were told to rush their work.
Wow - Michael , if you worked for me I would fire you! How do you not know what is going on in "your company (eThekwini) "? Would you wrongfully pay out R300 million if it was your money? Who are you going to blame? Maybe Tokyo will still fire you for wasting his money?
Just three weeks after receiving R30-million from the eThekwini municipality, high-flying Durban couple S'bu and Shawn Mpisane have halted the completion of RDP housing projects in Umlazi, apparently because they have no money to continue the work.The R30m paid in December was part of a series of electronic payments amounting to about R219 million, which the company received from eThekwini last year.The last payment of R4 785 720 was made on December 14, two weeks before their A-list, bling party on New Year's Eve.
That's when the big-spending former metro officer and his politically connected wife dazzled friends at their luxurious La Lucia home.Top-end whiskies and champagne flowed, while they splurged on special thrones and showed off their new Rolls-Royce. Guests included national police commissioner Bheki Cele.
While Shawn Mpisane, daughter of the late ANC local councillor Dumazile Flora Mkhize, is the one who was granted the Umlazi housing contract, it is her husband, Wiseman Sibusiso (S'bu), who has been the focus of media attention. While working as a metro police constable, with a salary of less than R15 000 a month, Mpisane raised eyebrows by arriving at work in a Lamborghini and living in a R17 million mansion.This week, he made headlines of a different kind when The Mercury's news editor, Philani Makhanya, laid a complaint of intimidation against him. The alleged intimidation came after Mpisane became aware The Mercury was investigating his affairs.
On Monday, workers of Shawn Mpisane's Zikhulise Cleaning, Maintenance and Transport company (constructing homes?), as well as those employed by sub-contractors, in Umlazi, were told to go home because the company allegedly had no money to continue their work.An estimated 1 300 people, many from Umlazi, and their families have been affected, according to Ward 79 councillor Sthenjwa Nyawose.Mpisane had told him her company had received no money from the municipality since October. Despite repeated attempts to interview Shawn Mpisane, she failed to return calls to The Mercury as promised.As a result of the job and housing uncertainty, Nyawose described the situation in the township as "volatile but calm"."We are very angry, the councillors of Umlazi are fuming," he said. "As we speak, the project is not going on because the contractor has not been paid. The problem is the municipality is not coming up with the money."Contradicting this, however, documentary records in The Mercury's possession indicate that more than R50 million was paid by the municipality to Zikhulise in November and December.Municipal manager Michael Sutcliffe confirmed a total of "around R300 million" had been paid to Zikhulise over 18 months and said the project had been completed in mid-December.The project involved building low-cost cost RDP houses on 4 500 sites in Umlazi B10, KwaMgaga and Umlazi Infill.The Mercury has documentary proof that a total of R219 930 939 was electronically transferred from eThekwini to Zikhulise in 2009. In December alone, four payments totalling about R30 million were made. Nyawose said thousands of houses were still under construction or to be built in Umlazi, contradicting Sutcliffe's statement that all work had been completed.Sutcliffe explained that some funding was usually paid in advance. "Contractors submit claims based on work done; the city's professional team verify that and if such work has been done, payments are then made," he said.Like Nyawose, Sutcliffe confirmed that the development was initially a provincial project which the municipality was asked to take over. "In August, 2006, eThekwini municipality resolved to take over the project and become the developer and further agreed that the professional team and contractors... be kept for the duration of the project."But just months after construction, some of the houses were crumbling, The Mercury established during a field trip. The houses were not plastered or painted. Some had no toilets, taps, baths or showers. An eight-member family living in a leaking, three-roomed house said their biggest concern was how they would eat. Only two members of the family were employed, one by Zikhulise and the other by one of its sub-contractors. "Eish, school has started and we can't take the children to school because we have no money," said one woman. Another angry man said the houses were of a poor quality because workers were told to rush their work.
Wow - Michael , if you worked for me I would fire you! How do you not know what is going on in "your company (eThekwini) "? Would you wrongfully pay out R300 million if it was your money? Who are you going to blame? Maybe Tokyo will still fire you for wasting his money?
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to low-cost housing.
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to low-cost housing. Industry Summits Reuters
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to low-cost housing.
DUBAI (Reuters) - Dubai developer Deyaar DEYR.DU, which on Monday announced it had cut 20 percent of its workforce, said it will re-start developing projects in 2010 and set up co-investment funds for its overseas expansion plans.
"2009 was a development holiday. In 2010 we have to start developing again," Markus Giebel, the firm's chief executive told the Reuters Middle East Investment Summit on Tuesday.
Dubai's second-largest listed developer, which plans to double the size of its property portfolio over the next five years, has handed over seven projects to investors in the third quarter and committed to six more in 2010, it said earlier in October.
Giebel said on Tuesday he hoped to close the firm's 500 million dirham ($136.1 million) distressed debt fund by the end of the year and would "attempt" to launch a co-investment fund in 2010 of similar size.
The firm is looking at several expansion opportunities across the Middle East, including Saudi Arabia and Lebanon, but would take its time in identifying projects, he said.
"The shelf life of a product in 2008 was two to four days. Now the shelf life is six to twelve months so we have all the time in the world to make a decision," he said, adding the firm had over 500 million dirhams of cash to spend.
"100 million dirhams investment goes a long way ... 100 million dirhams gives you a billion dirhams of development in a joint venture structure."
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to villas and low-cost housing.
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to low-cost housing.
DUBAI (Reuters) - Dubai developer Deyaar DEYR.DU, which on Monday announced it had cut 20 percent of its workforce, said it will re-start developing projects in 2010 and set up co-investment funds for its overseas expansion plans.
"2009 was a development holiday. In 2010 we have to start developing again," Markus Giebel, the firm's chief executive told the Reuters Middle East Investment Summit on Tuesday.
Dubai's second-largest listed developer, which plans to double the size of its property portfolio over the next five years, has handed over seven projects to investors in the third quarter and committed to six more in 2010, it said earlier in October.
Giebel said on Tuesday he hoped to close the firm's 500 million dirham ($136.1 million) distressed debt fund by the end of the year and would "attempt" to launch a co-investment fund in 2010 of similar size.
The firm is looking at several expansion opportunities across the Middle East, including Saudi Arabia and Lebanon, but would take its time in identifying projects, he said.
"The shelf life of a product in 2008 was two to four days. Now the shelf life is six to twelve months so we have all the time in the world to make a decision," he said, adding the firm had over 500 million dirhams of cash to spend.
"100 million dirhams investment goes a long way ... 100 million dirhams gives you a billion dirhams of development in a joint venture structure."
Deyaar, which once focused primarily on high-rise buildings, is shifting its focus to villas and low-cost housing.
Human Settlements - housing officials cited on R18m fraud
1300 housing officials cited on R18m fraud
THE Department of Human Settlements is disciplining more than 1300 housing officials who defrauded the housing subsidy system to the tune of R18million.
Human settlements director-general Itumeleng Kotsoane told Parliament’s human settlements committee yesterday that the special investigations unit had finalised 513 cases involving civil servants – many of whom were convicted.
The errant officials who “defrauded the housing subsidy system” have signed more than 1440 acknowledgements of debt to the value of R18399778 .
The officials have paid government back R1,8million so far, Kotsoane said. A further 795 officials are currently facing disciplinary action. Kotsoane told the committee that the spiralling costs of housing material posed a “huge problem” to the government.
He said the Competition Commission’s investigation of possible cartels in suppliers of construction materials such as stock bricks and cement will help reduce the costs of building houses in the future.
Meanwhile, members of Parliament urged Kotsoane to check that quality houses are being built as a way of preventing service delivery protests.
Committee chairperson Nomhle Dabuza said the human settlements department had also failed to monitor what happens to new housing projects.
THE Department of Human Settlements is disciplining more than 1300 housing officials who defrauded the housing subsidy system to the tune of R18million.
Human settlements director-general Itumeleng Kotsoane told Parliament’s human settlements committee yesterday that the special investigations unit had finalised 513 cases involving civil servants – many of whom were convicted.
The errant officials who “defrauded the housing subsidy system” have signed more than 1440 acknowledgements of debt to the value of R18399778 .
The officials have paid government back R1,8million so far, Kotsoane said. A further 795 officials are currently facing disciplinary action. Kotsoane told the committee that the spiralling costs of housing material posed a “huge problem” to the government.
He said the Competition Commission’s investigation of possible cartels in suppliers of construction materials such as stock bricks and cement will help reduce the costs of building houses in the future.
Meanwhile, members of Parliament urged Kotsoane to check that quality houses are being built as a way of preventing service delivery protests.
Committee chairperson Nomhle Dabuza said the human settlements department had also failed to monitor what happens to new housing projects.
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