Budget speech by Gauteng MEC for Housing Nomvula Mokonyane for the 2007/08 financial year 15 June 2007 "My blood will nourish the tree that will bear the fruits of freedom. Tell my people that I love them. They must continue the fight." Comrades Speaker and Deputy Speaker It was on 6 April 1979 when the judicial murder was perpetrated by the illegitimate apartheid regime. These profound words cited were expressed by no other than Solomon "Kalushi" Mahlangu, the young and gallant combatant who steadfastly defied the apartheid regime even when faced with the prospect of death. Instead of instilling fear in the hearts of the youth, the brutal tactics of the then oppressive regime backfired, multitudes of young people swelled the ranks of the liberation movement determined to take over Pretoria the then seat and symbol of all that was evil, racist, oppressive and politically abhorrent. Comrade Kalushi's murder served as a spur for many young people to pick up the baton and "continue the fight". Comrade Speaker, we are just hours away from observing the 31st anniversary of 16 June Soweto Uprising. As the ruling party in government, the African National Congress (ANC), it is imperative that we ensure that the commemoration of Youth Day is not only given lip service. It is engraved in our historical annals as the day the blood of the multitudes of unarmed young people who defied and challenged what was fundamentally wrong and evil was shed. There is no honour more befitting these revolutionaries than introducing and implementing pragmatic programmes aimed at advancing the interest of youth. What we should all focus on is giving back to the youth what they rightfully deserve growth, development and security. If we fail in this duty, we risk being haunted eternally by the disgruntled voices of the youth who will justifiably crucify this government for betraying the spirit and essence of the national democratic revolution. Surely, we do not want to be judged harshly by prosperity as the party that debunked the Transformation Programme. This year we are also commemorating 52nd anniversary of the adoption of the Freedom Charter as the fundamental document that all freedom lovers should translate into reality. We shall not relax in our quest to build sustainable communities until we are satisfied that the vision of the Freedom Charter has been fulfilled. In our business, Comrade Speaker, the ideal that "there shall be houses, security and comfort" will remain a guiding principle. The Freedom Charter further states that, "slums shall be demolished and new suburbs built where all have transport roads, lighting, playing fields, crèches and social centres". The ANC still believes that these ideals of the Freedom Charter are pertinent to our business and they should serve as a guide to all our activities. As we march forward in our fight against poverty, mushrooming of informal settlements and segregated human settlements this guiding principle becomes even more relevant. When we assumed office in June 2004 we unveiled the Department's Five Year Strategic Plan in which we committed ourselves to changing the apartheid's housing development patterns. The idea of isolating the poor far from the economic nodes as if to conceal them from the eyes of the world is not sustainable. In fact such disgusting idea doesn't have a place in a democratic state that many of our people died for. To further demonstrate our commitment, in the period spanning June 2004 and October 2006 we made tremendous strides by: On the empowerment programme for the youth in particular, we continue to be guided by the imperative of the national democratic revolution led by the ANC. On 8 January, the ANC statement reiterates the centrality of youth interest in our struggle for total emancipation as follows: "Initiatives that relates to putting in place sustainable platforms for economic growth cannot succeed without the massive participation of South Africa 's youth. This participation also serves as a bridge between the first and second economies." In line with this the Department has developed the Housing Development Sector Involvement Strategy. It is an intervention seeking to priorities the needs of the economically vulnerable and marginalised groups. The youth, women and the disabled are central in this strategy. In terms of the strategy we have committed to allocate R200 million per sector over the medium term expenditure framework (MTEF) period reviewed annually on the basis of performance and interest. The strategy proposes three focal areas in which the marginalised groups should participate meaningfully, project identification (with ring-fenced budget), sub-contracting (with established developers) and maintenance through urban renewal and 20 Prioritised Township Programme (20PTP). Comrade Speaker, yesterday I had the privilege of visiting the youth managed project in Hammanskraal West in which the Department invested over R24 million to two youth companies to build 600 housing units. This is part of our targeted intervention where 10 youth companies within the housing and construction industry will be taken through the Empowerment Programme so that they become established developers in their own right. The majority of our young people are ready to do things on their own as long as favourable conditions are created and opportunities provided. Moreover, the Department will be enrolling 100 young people for training in construction, financial management and project management. This will be done jointly with Gauteng Youth Commission and Umsobomvu with National Home Builders Registration Council (NHBRC) providing the technical assistance and training. As part of our empowerment strategy we have invested R200 million in 10 women owned construction companies. I had the opportunity to visit and perform site inspection on some of the projects in Sedibeng, Metsweding, Tshwane and Ekurhuleni. It is quite exciting to see women contractors making a material difference in the lives of many people who have never owned a house before. Ladies and gentleman, I am mentioning some of the achievements we have registered as an indication of strong commitment and dedication to the empowerment and promotion of the interest of vulnerable groups. We are pleased that some of them are here with us in the Legislature today. Coming back to the five key priority areas which are part of our five-year plan, I must say we are on track with our delivery plan. These priority areas are underpinned by the tenets of both the Gauteng Development Strategy (GDS) and the Breaking New Ground National Strategy on housing. They comprise, Mixed-Housing Development, Eradication of informal Settlements, Alternative Tenure, Urban Renewal Programme and 20 PTP Mixed-Housing Development Through Mixed-Housing Development Programme we are steadily transforming the spatial designs of our settlements by doing away with apartheid spatial designs which created arid reserves for one group and plush suburbia for the other. So far under this programme we have identified flagship projects for each region in Gauteng where there is ongoing work which is at different phases and stages of construction. Through these projects we will be able to realise our objective of creating jobs as well as de-racialising human settlements and create those that will accommodate all and sundry irrespective of ones background, financial status or social standing. This is the type of commitment we have made and we would like to be judged on. In Tshwane we identified Olivenhoutbosch Ext 36 (Absa land) which is a mixed development with 4 452 units in total and to date 714 houses have been completed and occupied. The project is implemented in partnership with Absa Bank and Tshwane Municipality . Since the project was launched on 31 January 2006, we have seen a lot of enthusiasm from all stakeholders and it is no surprise that we have beneficiaries that have already taken occupation of their houses and we are fortunate today that Mr Moodley and family as well as Mr and Mrs Mathetja have joined us in order to share their experience and joy. We also have Ms Zarah Curtis from Cosmo City . They now have a decent house close to various socio and economic opportunities available to all residents irrespective of their class and income levels. Other projects such as Thornthree View and Nelmapius are also on track with houses already constructed and ready for occupation. In partnership with the City of Johannesburg, the Department is planning another big mixed housing development called Doornkop Housing Development that will consist of about 25 000 different housing units for various income groups. The housing products intended for the project include fully subsidised housing for the poorest of the poor, affordable housing for other low to middle income households and middle to high bonded housing stock. The project will also have an urban agricultural component and other socio-economic amenities including commercial developments. In terms of the plan we expect the project to hit the ground for the first phase development by January 2008 and the entire project will be implemented over a five-year period that is until 2012. The Department is currently engaged in discussion with the International Housing Company (IHC) based in Toronto , Canada which is willing to provide humanitarian grant funding towards the Doornkop Mixed Housing Development Project. The IHC will be making available in excess of $100 million US Dollars over the period of three years of which will be facilitated via their appointed non-governmental organisation (NGO), namely Peabud South Africa . The arrangement is currently at a very advanced stage whereby a tripartite agreement will be concluded between Peabud South Africa , Gauteng Partnership Fund and the IHC. The Cosmo City project which has now become a national symbol of mixed housing development is well on track. When complete the project will have 5 000 low cost, 3 300 bonded and 3 000 finance linked housing units and 1 000 apartments for rent. The entire housing component of the project will be completed by 2009. Construction on the Alexandra K206 housing project started in January 2007. The project brings 3 509 mixed tenure housing opportunities to the community of Alexandra. The project marks a new approach to housing by providing two rented rooms attached to the subsidy house. This approach to housing is a response to a number of challenges facing the community. Firstly, city planners and urban designers have been calling for greater densities in affordable housing projects to enable maximum advantage of location. The K206 through its cluster urban form has increased the housing density from the traditional below 40 units per hectare to over 140 units per hectare. In this way many people can enjoy decent housing on well-located land. Secondly, by linking rented rooms to a subsidy house, the opportunity exists to keep the rent paid within the community and thus providing economic opportunity to those in need. Thirdly, the provision of rented rooms begins to answer the complex question of how to house people who do not qualify for a housing subsidy. The K206 project is an example of the innovation required if we are to meet the housing challenge. In partnership with Mogale City and Absa bank we have a identified joint project in Kagiso/Azzadville where we will develop mixed housing with a total of 6 800 different housing units. We expect the construction and installation of services to commence in October/November 2007. In response to the relocation of Bekkersdal, which is on dolomitic area in the West Rand , we have identified Middelvlei /Droogeheuwel and Westonaria South for a mixed development consisting of 15 643 different housing units. The installation of bulk services will start in early January 2008 and construction of houses later in the same year. In Ekurhuleni, Chief Luthuli Ext 6 housing development is expected to yield approximately 3 400 low cost housing units on even between 120 square metres to 180 square meters. The projects will also yield 3 821 high-density units to accommodate mixed income groups. Provision is also made for socio and economic amenities. The bulk infrastructure has been installed and proved to be sufficient for the project and construction of houses will commence after the appointment of a contractor. The project is expected to be completed by 2009. The Leeuport Mixed Housing Development will be implemented in August 2007. The income project bank ability study has been completed and will result in the release of approximately 22 portions of land for mixed income development and is expected to yield approximately 17 000 units over the next seven years, which will include 4 000 rental units as well as the upgrading of an informal settlement as part of the project. Honourable members, all of the above mentioned mixed housing settlements are new initiatives. This goes to show what the ANC policies are all about. The significance of this approach is the fact that the sale and development of high-income residential units will cross-subsidise an improvement of the level of services in the fully subsidised areas of the development Eradication of informal settlements Comrade Speaker, our commitment to deal with poverty and create better life for our people through provision of better housing by eradication of informal settlements is one of our key priorities. It is within informal settlements that the "urbanisation of poverty" is thriving. Our commitment to the public is to ensure that all our people live in decent, secure and habitable environments. In achieving this goal the Department has identified 145 informal settlements that will be upgraded and 209 to be relocated in identified areas. Our aim is to vigorously address the 600 000 units backlog on basic services and infrastructure by 2009, through implementation of the incremental housing approach. We are quite confident that our vision of eradicating informal settlements by 2014 can be achieved if we work in partnership with various stakeholders including communities that are to benefit in such initiatives. With us here today we are honoured to have another beneficiary from Ekurhuleni Mr Sammuel Mashinini who two months ago was staying in an informal settlement in Alberton station but today he is a proud owner of a government-subsidised house in Tinasonke in Ekurhuleni. As a matter of fact, we have identified 10 informal settlements that will be totally eradicated in this financial year across the province. In Metsweding we have identified Rethabiseng Proper with 504 houses, Steve Bikoville with 2 058 stands and houses will be provided resulting in 12 810 households having access to decent shelter and services. In Tshwane we have identified Soshanguve HH with 650 houses that will result in 3 250 households having access to proper housing and services. In Johannesburg , Nomzamo 450 houses and Doornkop Thulani 970 houses resulting in 7 100 households having access to proper housing and services. In Westrand/Sedibeng, Tshepisong Proper, 540 houses and Tshepiso Proper 935 houses resulting in 7 375 households having access to proper housing and services. In Ekurhuleni, Kwa-Thema extension 12 we will deliver 433 houses and Daveyton extension 12 deliver 662 houses with 5 475 households having access to proper housing and services. In addition to this effort we have intensified our efforts to provide housing through Formal (Turnkey) Housing, Community Builder Programme and Peoples Housing Process in the following areas: Johannesburg : 15 985 houses; Tshwane / Metsweding: 16 380 houses; Ekurhuleni: 13 753 houses and Westrand/Sedibeng: 13 618 houses. With the provision of these houses we will see over 300 000 people per household having access to shelter and thereby changing their lives for the better. Moreover, the Department has undertaken to complement conventional housing construction with alternative building technologies. In line with the new comprehensive housing plan which aims to accelerate access to housing opportunities these alternative technologies will assist in decreasing the housing backlog as they prove to be faster in construction, labour intensive (assist in job creation and skills transfer), offer a varied array of housing choice to our beneficiaries and are within the subsidy. Already we have two pilot projects that we are implementing in areas such as Nomzamo, Kaalfontein and a third one is being finalised. Alternative tenure We are aggressively accelerating housing delivery by promoting alternative tenure which provides alternative accommodation options for those not seeking permanent housing. This is informed by observable evidence that shows that some of our people prefer rental than having a permanent house in Gauteng . We are also regulating relationship between landlord and tenants. In addition, we are reviewing the authority of the housing tribunal to ensure that its decisions are effectively enforced. Through this initiative we will deliver 3 000 social housing units providing diversified rental housing options for different income groups in 2007/08 financial year. This programme is targeting the inner cities throughout the province. Hostel conversion: This plan will ensure that we integrate hostels into the neighbouring communities thereby moving away from the old apartheid dormitory accommodation. In 2007/08 the focus will be on completing the following 13 hostels: Diepklook, Orlando, Dube, Kagiso, Mohlakeng, Saulsville, Mamelodi, Refilwe, Sebokeng, Boipatong, Khayalitsha, Sethokga and Buyafuthu. We have within our midst today representatives from one of our hostels in Tshwane who have benefited from our interventions. These are the people that have seen hardship and lived in inhumane conditions for some time but today with our vision of making hostels a place to live in, their lives have changed for the better. We therefore say to other hostel communities your turn will come, work with us as we seek solutions to the challenges. We are committed to the integration of such facilities to the mainstream housing development initiatives thus ensuring that hostel residents become integral part of broader communities with whom they have so much in common. Together with municipalities we are working out a plan to address alternative property management and regulation of landlord and tenant relationship for all of the above facilities. Our commitment is to provide rental stock that will be affordable and accessible to all those who choose this form of accommodation. Backyard upgrade: A pilot project of 750 housing units is underway in Orlando East and to date 726 individual beneficiary subsidy applications have been approved by the Department, 439 units have been completed and certificates handed over to the beneficiaries, 58 units roofed, 41 wall plate/roof level and 15 foundations. Since this is the first of its kind in the province and the country as a whole, there have been many challenges that we faced and some relate to quality work, cash flow problems for contractors, landlord/tenants relationships and small contractors not complying with norms and standards and availability of material from suppliers. I need to emphasise that this is a pilot and therefore many lessons and challenges have been dealt with in a manner that will take the project forward to its final stage. With us here today we have Mrs Khambule from Orlando East, who have benefited from this project. She is here to bear testimony that our interventions can make a difference and there is hope even for those that have not yet benefited. Following on the lessons learnt in Orlando East, I am pleased to announce that the Department has extended the programme to Boipatong Township for the construction of 750 units this year, planning for other areas will commence as part of the 20PTP roll out plan. Urban Renewal Programme The decision we took to implement a programme aimed at the rehabilitation of socio-economic infrastructure of our townships is beginning to bear fruits. The Urban Renewal Programme has turned many of our targeted townships into busy construction sites. This is happening in partnership with members of the communities who have entered into a "people's contract" with the government to improve the conditions in their own neighbourhoods. However, this is not happening in an environment free of challenges. Many of these challenges are a result of corrupt business individuals and entities that are hell bent to swindle the public programmes. It is our intention to continue exposing and dealing with them without any feeling of mercy. We will continue to investigate, expose and arrest if necessary. Comrade Speaker, in all three areas, Alexandra, Bekkersdal and Evaton, where the programme is implemented we are seeing visible change and progress. We have prioritised housing and support infrastructure as well as putting more effort on attracting private investors. In Alexandra currently there are 38 active projects of which work is happening with more focus on housing and infrastructure development and upgrade. In Bekkersdal our key focus is to relocate the township whilst at the same time we rehabilitate the existing infrastructure focusing on Bekkersdal City Business District (CBD) Precinct, Bekkersdal Multi-Purpose Community Centre (MPCC) Precinct, Bekkersdal Gateway Precinct and Bekkersdal Industrial Precinct. 'Owing to problems we picked up relating to the management of the programme in Evaton Renewal Project, we resolved that a decisive intervention is required. The Department has therefore designed a new approach that will focus on high impact development by prioritising infrastructure upgrade and development in a precinct fashion.' For the following three years the project will focus on planning for land acquisition and restitution, housing, engineering bulk infrastructure (water and sanitation), roads and transport and local economic development (LED). 20 Prioritised Township Programme (20PTP) In terms of the 20PTP projects we are on course with our plans. We have completed all business plans and the alignment of Municipality Integrated Development Plans (MIDPs) with the programme is under way. We have consulted with all the stakeholders in all the regions and municipalities around the projects that will be implemented in all affected townships. So far the implementation has commenced in various areas. During 2006/07 we implemented projects to the value of R2,5 billion across the province. These projects are accumulative and multi year and implementation thereof will be completed by 2009. During this year we expect to spend about R1,1 billion in identified projects by both provincial departments and municipalities. Already work is proceeding in 16 schools and four clinics identified by the municipalities. Adjustment of the subsidy quantum The Department has taken into account the proposal by the Minister and MECs (MinMEC) to introduce the new subsidy quantum of R38 984,00 for the construction of a 40 square metre house with effect from 1 April 2007. Owing to the fact that in Gauteng we have already set targets and implementation of current and ongoing projects which are 36 square metres is underway since 2004, the MinMec proposal will be considered in the next financial year. So far in Gauteng we have been topping-up the subsidy to accommodate the standards that we have set. Speaker, there is a predominant perception that the cost of building low cost house is normally very cheap hence the end product is of low quality compared to other housing products in the market. We have to dispel this myth and empower communities and beneficiaries about the market value of such houses. When we develop low cost housing we take into account the costs for land acquisition, installation of bulk services and essential services such as water and sanitation. Therefore the average cost for the low cost house is R88 000 to R105 000. Housing challenges In spite of the achievements we have made, we are still contending with a number of challenges. The challenges we encounter range from delivery of poor quality housing, maladministration and corruption, scarcity of land, poor and unco-ordinated planning in some instances, ineffective enforcement of by laws and unavoidable in-migration of people into Gauteng . This also has serious implication in terms of urban management giving rise to unplanned growth of informal settlements. Recently we have witnessed an upsurge in complaints about service delivery. The assumptions that if it has not happened to you its not happening must be discourage. Within a short life of our young democracy, the government has been able to transform the lives of millions of our people. The assurance that we give our people is that if delivery has not happen in your area it will soon happen as it did in other areas where people waited patiently. We are also coming to your community. What we humbly ask for from our people is co-operation and understanding as we strive to deliver on our mandate. Above all it is also the responsibility of the law-abiding citizens to protect and preserve the assets provided by the state. Do not destroy the infrastructure that belongs to you, it is the tax money that you are destroying. Work with us for a better Gauteng . Comrade Speaker, as we continue with the implementation of our Five Year Strategic Plan we are in constant search for innovative, cutting edge methods for housing delivery. We are crafting a new developmental path aimed at unblocking bottlenecks that hinder the realisation of our mandate. This developmental trajectory focuses on various critical elements of the Department's business. We are currently exploring different options to fast track housing delivery. Amongst these options we are looking at alternative technology, issues of central planning, land acquisition and inclusionary policy. These options are very critical especially if we want to ensure that the Millennium Development Goal (MDG) of eradication of informal settlements by 2014 is realised. It is our submission that such interventions will also go a long way in building Gauteng as a global city region of note. Our quest to deracialise and integrate people on well-located land cannot be allowed to be undermined by processes of land acquisition. Alternative options will have to be explored and fast tracked lest unplanned development will force government to react and follow chaotic developments. During the past 13 years our experience tells that there has been a very low number of willing sellers unless faced with a situation that forces them to dispose of land. One of the things we are envisaging is locating all public owned land under one government entity discouraging parastatals and municipalities from disposing land at the expense of the national transformation agenda. To promote social integration across class, social strata as well as between racial groups we have introduced the inclusionary policy that encourages the developers of the up market estates to consider allocating a percentage of their housing development to low-cost housing for low-income groups. Surely, Mr Smith, an industrialist, must get used to staying next door to Ms Mabuza, the housekeeper. Why do you need a helper in your opulent estate's kitchen and garden during daytime yet you cannot stand the idea of sharing the same residential space with him/her when nighttime comes. Is this not the prejudice that we should rid our society of? It is very unfortunate that the reality of our condition is such that we are a nation rich in diversity, sharing the same geographical space and yet still imprisoned by our own fears and prejudice. The inclusionary policy is attempting among other things to redress such anomaly. Otherwise, the Freedom Charter vision of "Peace and friendship amongst all our people and upholding the equal rights, opportunities and status of all", (own emphasis) will remain a pie in the sky. Honourable members, in addition to all these innovations, the capacity of the Department to deliver will be further strengthened as we explore the idea of material acquisition, storage and dispensation. The warehousing of the building material under the authority of the government agency and managed by able and skilled personnel is being under consideration. We believe this will assist us in speeding up delivery and reducing levels of homelessness in Gauteng . Gauteng Partnership Fund (GPF) The GPF has been instrumental in leveraging private sector funding and filling market gaps to an extent that it provides a platform for possible broader affordable housing interventions, such as guarantees to raise international grant funding for housing projects. GPF continues to create an enabling environment for private sector to enter the sustainable social housing market by cementing partnerships for funding affordable housing projects. The efforts have contributed to R200 million GPF investment gearing over R500 million private sector investments to sustainable integrated housing projects in Gauteng . Fighting fraud and corruption As part of our ongoing efforts to prevent acts of fraud and corruption in housing delivery we will intensify our fraud awareness campaigns within the Department. Eighty percent of staff has been trained in Fraud Prevention Awareness. We intend developing a Gauteng anti-corruption legislation which will serve to inform those who do business with us about our stance on zero tolerance to fraud and corruption. We will continue our efforts to uproot incidence of fraud and corruption in housing to the full extent of the law. Moving forward As we move towards the realisation of 2014 vision we have identified issues that need immediate attention, reducing the cost of doing business with government, improving the commitment and upgrade the skills of civil servants, improving communication with stakeholders and the public and focus all our projects to the fight against poverty and unemployment. Our policies and programmes are never and will never be crafted on the basis of sectarian or racial considerations. Instead these will remain products of critical analysis of conditions that prevail in society. Comrade Speaker, I believe it is now clear to all the members and the public how we are using our share of public purse. In addition, I hope it is even clearer what we are going to expend our budget allocation on for 2007/08. Although we would have been over the moon if we were given more, the amount allocated is readily accepted and we commit ourselves to putting these resources to good use without a cent of the allocation being misused. It is in this context that I gladly present the 2007/08 budget allocation for the Gauteng Department of Housing as follows: Main Appropriation is R2,637,948 billion and shows an increase of 21,5% compared to last financial year. This can be further broken down into the following programmes: 1. Administration: R151 593 000 Included under programme three budget allocation is the allocation of R125 million for the Alexandra Urban Renewal Project and R65 million for the 20 PTP. May I also thank all our partners, stakeholders and ordinary individuals who continue to lend their support to us. In unity we will persist to look for different ways and means of speeding up housing delivery. In conclusion, let me thank men and women who under the stewardship of the head of Department (HoD), Ms Manching Benedicta Monama have diligently steered the ship without fail. This also goes for wise guidance that the Department enjoyed from the members of Standing Committee led by an ever vigilant comrade Godfrey Tsotetsi. Our appreciation also goes to all officials responsible for housing in various local authorities. It is through joint effort that we have been able to achieve the goals we set out to attain. Lastly, I want to express a great sense of appreciation for the support that I am enjoying from the Premier and all members of the Executive Council.
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