Sout African Government threatens Cape-Town grants

Four provinces may lose housing grants because of under-performance that saw them fail to meet monthly delivery targets for low-cost housing, the department of human settlements warned on Tuesday.

The department distributes around R14-billion a year to provinces for low-cost housing, but according to the director-general of human settlements, Thabane Zulu, the Western Cape, Eastern Cape, KwaZulu-Natal and Free State were lagging on delivery.

Four provinces 'lagging behind'

"Four provinces — Western Cape, Eastern Cape, KwaZulu Natal and Free State — are lagging behind with delivery or are under-spending and may have to forfeit a portion of their grant," Zulu said in a statement.

"The funds might have to be redirected to provinces where there is better performance."

The threat drew protest from the Western Cape, where the housing department said delivery had sped up dramatically in December.

Human Settlements Minister Tokyo Sexwale told Parliament's portfolio committee on human settlements last November that a number of provinces were under-performing on housing delivery.

At the time, he said that the main reasons for this included a lack of capacity in provinces — in particular, project management experience — and a lack of bulk infrastructure such as large-scale electricity and water supply projects.

All nine provinces were asked to provide the national department with "recovery plans" to demonstrate how they were going to meet their monthly and annual targets.

Minister considering transferring funds

"In line with good governance and legislation, after having studied the delivery plans and consulted with the provinces, the minister is considering the practicality of transferring funds from provinces which are lagging behind, to provinces where there are approved business plans in place," Zulu said.

"There have been detailed discussions with all the provinces and it is clear that serious challenges remain in the Western Cape, Eastern Cape, KwaZulu Natal and Free State. As a result, they may have to forfeit a portion of their annual human settlements grant."

A final decision on which provinces will forfeit funds, and how much will be transferred to other provinces, would be made soon.

"We are still in consultation, and the minister is applying his mind to the situation," Zulu said.

"A final decision will be made in the very near future."

December figures still due

The Western Cape department of human settlements said it was "unfortunate" that the national department had not waited for the December performance and expenditure figures, due on Friday, before issuing its statement.

"The picture has improved dramatically in the Western Cape since National Minister Tokyo Sexwale raised his concerns last November," it said in a statement.

The department disbursed R261-million or 131 percent of its target of R200-million in November, and R232-million or 101 percent of its R230-million target for December.

"This means that, despite only spending 64 percent of its target in October, the department disbursed 99 percent of its R620-million target for the third quarter.

"We have spent R1.25-billion, or 64 percent of our budget for the year."

According to preliminary figures, the department serviced 8007 sites and built 8218 houses.

"We have approved a number of new projects in the third quarter, which will assist us to accelerate this delivery in the last three months of 2010/11.

"We are confident that we can spend the balance of R705-million in the final quarter of the financial year, and that it won't be necessary to redirect any of the Western Cape's grant allocation."