Annual Performance Report 2013/14: Department of Human Settlements

1. DEPARTMENT OF HUMAN SETTLEMENTS ANNUAL PERFORMANCE REPORT FOR THE FINANCIAL YEAR 2013/14. SELECT COMMITTEE ON SOCIAL SERVICESDIRECTOR-GENERAL: T ZULU

2. STRUCTURE OF THE PRESENTATION • Overview of Departmental Performance (April 2013 – March 2014 • Performance of the National Department as per Approved Annual Performance Plans 2013/14 • Departmental Expenditure vs Performance (Targets/Outcomes) • HS Sector Performance 4.1 Communication and Outreach key 4.2 Delivery Agreement (Outcome 8) 4.3 Job Creation 4.4 Accreditation of Municipalities 5. Financial issues • Responses to Audited Outcomes / Action Plan

3. Overview of Departmental Performance (April 2013 – March 2014) The 2013/14 financial year marks the coming of age of the South African Democracy. While on the other hand it marks the ongoing process of government’s efforts to provide shelter as a socio-economic right. Provinces as guided by the National Department, embraced principles of integrated planning, project implementation and synergy in deploying funding. Through collaboration and coordination, Provinces as delivery agents were brought in the outcomes based approach as they discharge their responsibilities to change the Human Settlements space. The department has also revised the finance linked individual subsidy programme to improve the ability of households in the income category R3 501-R15 000 to access mortgage finance for housing thus increasing access to housing finance and the provision of shelter and basic services

4. Overview of Departmental Performance (April 2013 – March 2014) Engagements were held with the private sectors such as Pathfinder Development Company as well as employers such as Harmony Golden to encourage investments and encourage access to affordable housing finance. The NSPU planned to monitor 144 Municipal Infrastructure Grant (MIG) projects and a total number of 152 MIG projects were monitored across 9 Provinces The RHIG Business Plans were received from 24 benefitting municipalities and funds were transferred to municipalities to implement RHIG. The management of the Urban Settlement Grant continued to receive attention in the devolution of powers to the local sphere of government. South Africa is a prominent member of UN HABITAT and continues to advocate and play an instrumental role for the support of human settlements programmes in Africa.

5. Overview of Departmental Performance (April 2013 – March 2014) The Department of Human Settlements hosted a delegation from Angola’s Ministry of Construction in March 2014.South African and Angola signed a Memorandum of Understanding (MoU) on Co-operation in the field of Human Settlements The Rental Housing Amendment Bill, 2014 has been formally introduced into Parliament on the 20th November 2013, and subsequently referred to the Portfolio Committee on Human Settlements for deliberations New Policy for Backyard Rental Programme was developed and approved by Task Team The CRU policy was adjusted in regard to the grant quantum levels. The Department embarked on filling all the vacant positions to address the challenge of skills. The strengthening of inward and capacity development initiatives is aimed to achieve the mandate of the department of human settlements.

6. Performance of the National Department as per Approved Annual Performance Plans 2013/14 • The overall achievement by the National Department of Human Settlements during the financial year 2013/14 is seventy nine (79%). • Out of one hundred and twenty-six (126) targets which were planned for the period under review, ninety nine (99) targets were achieved whilst twenty seven (27) targets were not achieved.

7. DEPARTMENTAL EXPENDITURE VS. PERFORMANCE (TARGETS / OUTCOMES)

8. HS SECTOR PERFORMANCE

9. COMMUNICATION AND OUTREACH The Chief Directorate participated in all Ministerial outreach programmes and face to face communication was done with communities with the help desk was set up and individuals queries were logged in for further investigation or solved on site. This was done in collaboration with Municipalities and Provincial Departments of Human Settlements. Public engagements included exhibiting during the annual Rand Show, Pretoria Show, South African Housing Foundation, BRICS Conference. About 4500 generic publications were distributed to GCIS library in Parliament and Thusong Service Centres in Mpumalanga and Limpopo in their regional languages.

10. COMMUNICATION AND OUTREACH CONT Door to door campaigns were done and publications were handed over to members of the communities during the campaign like on 06 August in Oudtshoorn and 02 October in Lerato Park in Kimberley. Community Imbizos hosted by the Minister and Deputy Minister were held across the country. Other outreach programmes were done by officials during Youth And Women Builds.

11. COMMUNICATION AND OUTREACH CONT • Sanitation Week held in Ward 5 at Makhaza in Khayelitsha - 25 April 2013 • Launched Walmer Link FLISP project - 09 May 2013 • Community engagements on the Budget Vote in Du-Noon – 22 May 2013

12. STRATEGY • Draft Terms of Reference for the Green Paper developed • Rental Housing Strategy Framework developed; the discussion paper about the affordability of rental housing and discussion paper about object subsidies in rental housing • Draft sector wide reporting indicators developed • Consultation on Draft 2014-2019 Strategic Plan across the sector • Draft evaluation report submitted to the Technical Working Group for comments

13. PLANNING • Draft ToR for the review of the Programme for Human Settlements Chapter of Municipal IDPs developed • Progress report on the support rendered to municipalities on the assessment of the Housing Chapters of the IDPs drafted.

14. ENHANCED PEOPLE HOUSING PROCESS Finalisation of the Human Settlements Policy on community based housing Cooperatives • Engaged the Service Provider developing the Policy • Engaged SEDA to explore possible collaborations and funding mechanisms for Human Settlements Cooperatives • Participates in the DTI Inter-governmental Coordination Committee on Cooperatives to provide an update on Human Settlements Cooperatives Advancement of the self-built methodology Oversight visits conducted in the Western Cape, KZN and North West Provinces to evaluate the implementation of the programme and deliver the required PHP capacity development workshops Support to Provinces in the upgrading of informal settlements through PHP • KZN Province and eThekwini Metro to evaluate progress regarding the upgrading of informal settlements through PHP • Assessing the M&E assignment of evaluating the impact of the UISP • Engaged the CPUT to discuss Human Settlements Summit with focus on alternative building technology

15. INTERNATIONAL RELATIONS PROGRAMME • The Department led a team of South African government officials and academics to the 7th World Urban Forum (WUF 7) in Medellin, Colombia. Outcomes from WUF 7 will support the concept of the long-term planning approach to urban policy and implementation and management thereof. i.e. National Development Plan (NDP) – Vision 2030, as well as respective city visions, which can look as far ahead as 2055 • Leading the country preparations for the Third United Nations Conference on Human Settlements and Sustainable Urban Development (Habitat III) in 2016 • Finalising the National Report on achievements in the last 20 years, what our remaining challenges are and what we hope to have included in the New Urban Agenda to be adopted at Habitat III

16. STAKEHOLDER AND IGR PROGRAMME • The Department successfully launched the Cornubia Integrated Project in April 2014. • The Graskop Project was successfully handed over from the China Government to the South African Government • A Memorandum of Understanding was signed with Council of Science and Research. • Preparations for the National Govan Mbeki Awards well underway with several successful provincial awards already hosted.

17. STAKEHOLDER AND IGR PROGRAMME The following Stakeholders were engaged-: • Sector engagements through a national workshop on 26 June and have further solicited written inputs to be included in the report before it is submitted to Cabinet for approval in Q2. • Held the 4th Quarter Provincial, Municipal and Entity Performance Review Sessions at the end of May and have followed up on the matters arising from the reviews with the relevant provinces, metros and entities

18. STAKEHOLDER AND IGR PROGRAMME • On the Each one settle one campaign the Department has secured a total amount of R105 000.00 for the Youth Build Special Project including the following items: • 250 construction work-suits, 50 protective shoes, 150 T-shirts, 200 blankets, a course for the Youth volunteer on skills, enterprise and cooperate training, a business management course, training on plumbing, electrical, general construction, geo-technical and mentorship program, as well as a one week catering for the volunteers. • The sponsorship benefited the elderly, the destitute and child headed households. • The secured funds paid for furniture, tools and other building materials through the Departmental NHBRC’s sponsorship special account

19. OUTCOME 8 – CREATE SUSTAINABLE HUMAN SETTLEMENTS AND IMPROVED QUALITY OF HOUSEHOLD LIFE

20. UPGRADING OF INFORMAL SETTLEMENTS • Upgrading of 400 000 households in informal settlements with access to secure tenure rights and basic services: • Target for 2014 achieved • 2013/14: Total number of households assisted: 87 064 • Total number of households assisted to date: 447 780 households • Represents 111,9% of 2014 target

21. NATIONAL UPGRADING SUPPORT PROGRAMME • National Upgrading Support Programme: • Performance 2013/14 : Progress from 35 Municipalities to 50 Municipalities; • Achieved 96% of the 2014 target -Technical assistance in place in 47 of 49 NUSP Municipalities plus additional 3 Municipalities that requested support; • The 50 Municipalities represents more than 700 informal settlements;

22. INCREASED PROVISION OF WELL-LOCATED RENTAL ACCOMMODATION

23. ACTIONS TAKEN TO ADDRESS CHALLENGES • Revision of current Social and Rental Housing Policies in process; • Development of back yard rental policy receiving attention; • Declaration of additional restructuring zones being attended to; • Monitoring tool for private rental to be put in place; • National Department will also undertake the design and costing of higher density housing typologies;

24. ACCREDITATION AND ASSIGNMENT OF MUNICIPALITIES • The annual target of undertaking 6 Workshops to capacitate the municipalities about the Accreditation Implementation Protocol was achieved. • The annual target of conducting 6 workshops to capacitate provinces and municipalities on the assignment of human settlements functions to municipalities was achieved. • The annual target of assessing 6 municipalities for accreditation at level 2 was not achieved, instead an assessment for the readiness of the 6 Metro municipalities to receive level 3 accreditation was conducted namely : City of Johannesburg, City of Tshwane, Ekurhuleni Metro, City of Cape Town, City of Tshwane and eThekwini Metro.

25. ACCREDITATION AND ASSIGNMENT OF MUNICIPALITIES • To assist the 6 Metros with capacity and subsidisation of the operational costs at the conclusion of the assignment of housing functions, the Municipal Human settlements Capacity Grant to the tune of R900 million was introduced over an MTEF period starting at the 2014/2015 financial year. • 74% of 2014 target achieved with: • Level 1: 8 District/ Local Municipalities; and • Level 2: 20 Metros/ District Municipalities/ Local Municipalities; • 4 implementation protocols still outstanding, namely Mangaung Metro, Nelson Mandela Metro, Tlokwe and Rustenburg; • No Metro was assigned. National Treasury in the process to resolve the funding procedures and transferring of assets and projects.

26. OUTPUT 3: EFFICIENT UTILISATION OF LAND FOR HUMAN SETTLEMENTS DEVELOPMENT • An additional 3 831.2 hectares of land was released by the HDA for future human settlements development. • Over the four year period of Outcome 8, a total number of 11 308.7 ha (both donated and acquired) of land was released representing 180,9% of the 2014 target. • Land Assembly Strategy developed and will be submitted to Human Settlements MINMEC - land pipelines with selected Provinces have been developed to facilitate forward planning and budgeting. • HDA commenced with discussions with relevant Provinces and Municipalities to assist with packaging of released land for development

27. OUTPUT 4: IMPROVED PROPERTY MARKET • Mortgage Default Insurance Scheme: • Although various discussions were held between the National Department, National Treasury and the Reserve Bank an agreement could not be reached and approval of MDI is still outstanding. • Finance Linked Individual Subsidy: • Revised Policy implemented in April 2012 – need for additional amendments identified and are receiving attention; • An additional 24 projects and 1 372 subsidies were approved in the 2013/14 financial year; • Long term fixed interest rate instrument • In view of the low interest rate environment and without immediate steep inflationary expectations at the time, the instrument will not benefit households and will therefore be reconsidered when the market environment has changed • 3

28. PERFORMANCE : DEVELOPMENT FINANCE INSTITUTIONS: LOANS GRANTED

29. IMPROVED PROPERTY MARKET • During the same period the total number of loans made available by Banks to the GAP market was 68 028. • Total contribution by the DFIs and Banks towards the 2014 target: • 134 907 loans by the NHFC (mortgage loans, incremental loans, wholesale funding and leveraging); • 176 754 loans by RHLF; • Construction of 10 093 units financed through 54 loans granted by NURCHA; and • 162 800 loans to the affordable market by the Banks; and

30. CONSOLIDATION OF DFI’s • Phase 2 of the rationalisation process commenced. Phase 2 makes provision for the development of a business case and draft enabling legislation for a consolidated Entity.

31. JOB CREATION The delivery of,48,193 serviced cites and 105,936 houses during the 2013/2014 financial created 53,278 employment opportunities.

32. ENHANCING SERVICE DELIVERY VIA PROFESSIONALISATION • Fledgling Scholarship programme benefiting some 347 beneficiaries since inception. Annual investment by Department is at R 9 million p.a. • Bachelor of Human Settlements Development Degree (BHSD) offered via Nelson Mandela Metropolitan University (NMMU). • Chair for Human Settlements Development and Management hosted by Nelson Mandela Metropolitan University (NMMU) to develop the body of knowledge in the sector. • Cabinet Approval for the Degree and the Chair.

33. SELECTED PERFORMANCE INDICATORS AS PER 2013/2014 STRATEGIC PLAN: PROGRESS STATUS BY PPMU BRANCH • The Klarinet Project, located in the Mpumalanga Province, within the jurisdiction of the Emalahleni Local Municipality, has to date, delivered 1788 housing units while 62 foundations, 67 wall plates and 186 roofs are in the process of being constructed. • 5500 units in the first phase of the Khutsong Project, 3 434 are complete, 4976 foundations have been laid and 4428 wall plates constructed. • In the Sweetwaters Project in the City of Johannesburg, 1000 units have been completed and occupied in the adjacent Tulamtwana project. • In the Drommedaris Project in the Drakenstein Municipality, 974 housing units have been completed and handed over while in the Duncan Village Project in the Buffalo City Municipality, 5354 housing units have been completed in this project. • On the N2 Gateway project, situated, within the jurisdiction of the City of Cape Town, a total of 11,400 units have been completed of the planned 16 083 units that were planned in Phase 1 of the project.

34. SELECTED PERFORMANCE INDICATORS AS PER 2013/2014 STRATEGIC PLAN: PROGRESS STATUS BY PPMU BRANCH • Construction of houses in the Zanemvula Project, situated in the Eastern Cape, within the jurisdiction of the Nelson Mandela Bay Metropolitan Municipality, is ongoing and to date, 6181 new units have been completed and 1970 units rectified • Lerato Park Project, situated in the Sol Plaatje Local Municipality, 491 units have been completed. • In so far as the mining towns was concerned, it was firstly necessary to request funding from National Treasury and R1,1billion was subsequently approved for informal settlement upgrading in the identified mining towns • In so far as the mining towns was concerned, it was firstly necessary to request funding from National Treasury and R1,1billion was subsequently approved for informal settlement upgrading in the identified mining towns • The donation of land (with 850 serviced sites) by the Lonmin mining company will assist in providing subsidized housing for the mining community in Rustenburg.

35. MTEF Allocation Grants and transfers to entities constitute 97% of the total allocation.

36. Allocation MTEF: Transfer payments

37. Summary of Adjustment Budget

38. Adjustment Estimate • Rollover approved • R100.5 million Rural Household Infrastructure Grant • R17 million Community Schemes Ombud Service: Capitalisation • R3 million Community Schemes Ombud Service: startup funding

39. Adjustment Estimate • Unallocated during 2013 ENE • R44 million Human Settlements Development Grant: Disaster relief • Declared Unspent Funds • R20 million National Upgrading Support Programme

40. Annual Expenditure per Programme as at 31 March 2014

41. Reasons for underspending • Funds provided for the Special Investigation Unit (SIU) have not been fully utilized. • Under spending is due to the SIU not invoicing the Department or not providing the department with supporting documentation on work performed and invoiced. • The Department held various meetings but could not resolve the matter. • Funds provided for the leasing of additional office accommodation have not been fully utilised. • The unspent portion of the Property Management portfolio is in respect of leasing of both 240 and 260 Justice Mahomed Street buildings. • The Department of Public Works (DPW) entered into a seven year lease agreement on behalf of the Department for these buildings, effective from 01 January 2011 to 31 December 2018. • A dispute arose between the DPW and the landlord that led to a delay in planned building refurbishment and tenant installation as well as the subsequent occupation of the additional office accommodation. i.e. (260 Justice Mohamed Street building) • Delay in the implementation of the National Upgrading Support Programme (NUSP) which takes up 30% of the Branch’s budget has contributed to the current low spending rate

42. REASONS FOR UNDER SPENDING CONT. • Other major contributing factor applicable throughout the Department is under spending on compensation of employees which amounted to R38.4 million and can be attributed to the following: • Delays experienced in qualification verification by the South African Qualifications Authority (SAQA) for candidates who have been recommended. A meeting was arranged between the Department and SAQA in the 3rd Quarter and improvement has been seen. • Posts that had to be re -advertised due to the fact that no suitable candidates could be found. • Problems are experienced with non-disclosure of criminal records on applications disqualifying selected candidates

43. Transfer payments as at 31 March 2014

44. HUMAN SETTLEMENTS DEVELOPMENT GRANT EXPENDITURE: 31 MARCH 2014

45. Delivery Performance of HSDG as at 31 March 2014

46. PERFORMANCE OF THE USDG AS AT31 MARCH 2014

47. Urban Settlements Development Grant Expenditure as at 30 June 2014

48. Spending Performance as at 30 June 2014

49. FINANCIAL PERFORMANCE - BCM

50. NON-FINANCIAL PERFORMANCE - BCM The 100% expenditure of the Metro was on the following: • 1 729 serviced sites • 3,7 ha of land procured • 56 km of roads resealed • 406 km roads rehabilitated • 56 km storm water drainage installed • 8 km pedestrian walkways constructed • 143 water service points (taps) installed for informal settlements dwellers • 622 households (RDP) have been provided with access to free basic level of potable water connections • 1 082 new households (RDP) with sewer connections • 448 sanitation service points installed • 64 178 connections for backlog in the provision of basic sanitation services