Standing Committee On Appropriations

Readiness To Administer Grants Allocations For The 2013/14 Financial Year

Mr. T. ZuluDirector-General

1

Outline of Presentation

• Applicable Legislation;• 2013 MTEF Grant Allocation;• Human Settlements Development Grant

(HSDG);• Urban Settlements Development Grant

(USDG); • Rural Households Infrastructure Grant (RHIP).

2

Applicable Legislation• Constitution of the Republic of South Africa, 1996 (Act No.

108 of 1996)• Housing Act No.107 of 1997• The Housing Consumers Protection Measures Act, 1998 (Act

No. 19 of 1998)• The Housing Development Agency Act, 2008 (Act No. 23 of

2008)• Public Finance Management Act, 1999 -Act No 1 of 1999 (As

amended by Act 29 of 1999)• The Social Housing Act, 2008 (Act No.16 of 2008)• The Division of Revenue Act• The Rental Housing Act, 1999 (Act No. 50 of 1999)• Home Loan and Mortgage Disclosure Act, 2000 (Act No. 63 of

2000)

3

2013 MTEF Allocations

4

Programme

Medium Term Estimates

2013/14 2014/15 2015/16

Administration 422,399 426,948 445,106

Human Settlements Policy, Strategy and Planning 84,055 89,301 92,967

Programme Delivery Support 226,922 239,335 251,305

Housing Development Finance 27,377,087 29,450,583 31,957,214

Human Settlements Development Grant 16,983,872 17,918,321 19,667,204

Urban Settlements Development Grant 9,076,906 10,334,684 10,699,773

Rural Households Infrastructure Development 106,721 113,124 118,328

Departmental agencies 1,133,751 1,002,070 1,388,035

Total 28,110,463 30,206,167 32,746,592

Programme

Medium term estimates

2013/14 2014/15 2015/16

Human Settlements Development Grant 16,983,872 17,918,321 19,667,204

Urban Settlements Development Grant 9,076,906 10,334,684 10,699,773

Rural Households Infrastructure Grant 106,721 113,124 118,328

Housing Development Agency 97,497 97,497 97,497

National Urban Reconstruction and Housing Agency 100,000

Social Housing Regulatory Authority: Operational 32,151 33,480 35,020

Social Housing Regulatory Authority: Capital restructuring grant 904,103 867,543 1,248,400

Total 27,301,250 29,364,649 31,866,222

Transfer Payments

Human Settlements Development Grant

• Goal - The creation of sustainable human settlements that enables an improved quality of household life

• Purpose - To provide funding for the creation of sustainable human settlements

• Outcome 8 - Facilitation and Provision of Access to Basic Infrastructure, Top Structures and Basic Socio Economic Amenities that contribute to the creation of sustainable human settlements

• Improved rates of employment and skills development in the delivery of infrastructure

7

Human Settlements Development Grant Provincial Allocations

8

Provinces 2013/14 2014/15 2015/16

R`000Total allocation

per province Total allocation

per province Total allocation

per province EASTERN CAPE 2,523,803 2,662,663 2,922,546 FREE STATE 1,120,936 1,182,609 1,298,035 GAUTENG 4,108,399 4,334,441 4,757,497 KWAZULU-NATAL 3,235,428 3,413,440 3,746,602 LIMPOPO 1,324,742 1,397,629 1,534,042 MPUMALANGA 1,124,332 1,186,193 1,301,969 NORTHERN CAPE 395,724 417,497 458,247 NORTH WEST 1,224,537 1,291,911 1,418,005 WESTERN CAPE 1,925,971 2,031,938 2,230,261 Total 16,983,872 17,918,321 19,667,204

National Priority Programme Allocations

9

Province Town 2013/14 2014/15 2015/16

EASTERN CAPE Duncan Village 109,767 117,881 129,386

GAUTENG Lufhereng 182,944 196,468 215,644

Diepsloot 91,472 98,234 107,822

Sweetwaters 45,736 49,117 53,911

Khutsong 96,046 103,146 113,213

Sub Total 416,198 446,965 490,590

KWAZULU-NATAL Cornubia 120,743 129,669 142,325

LIMPOPO Lephalale 291,651 313,211 343,781

WESTERN CAPE Drommedaris 62,736 67,374 73,950

Total 1,001,095 1,075,099 1,180,032

20% Allocation to Specific Outcome Targets

10

2013/14

Province Upgrading of Informal Settlements

Rental and Social Housing

Land acquisition

National Priority Programme

EASTERN CAPE 145,778 170,074 24,296 109,767

FREE STATE 62,861 73,338 10,477 -

GAUTENG 246,500 287,584 41,083 416,198

KWAZULU-NATAL 191,022 222,860 31,837 120,743

LIMPOPO 77,345 90,235 12,891 291,651

MPUMALANGA 67,424 78,661 11,237 -

NORTHERN CAPE 22,712 26,497 3,785 -

NORTH WEST 71,894 83,876 11,982 -

WESTERN CAPE 115,558 134,818 19,260 62,736

Total 1,001,095 1,167,944 166,849 1,001,095

HSDG Allocations to Metropolitan Councils

11

Provinces Metropolitan

2013/14 2014/15 2015/16

EASTERN CAPE Nelson Mandela 206,900 220,800 242,351

GAUTENG Ekurhuleni 933,800 996,600 1,093,871

Jo'burg 1,314,000 1,403,000 1,539,937

Tshwane 788,600 841,700 923,852

Sub Total 3,036,400 3,241,300 3,557,661

KWAZULU-NATAL eThekwini 878,400 937,600 1,029,113

WESTERN CAPE Cape Town 733,484 782,870 859,280

 

Grant Total 4,855,184 5,182,570 5,688,405

Provincial Business Plan Programmes Allocations

12

Programme No of

housing units

No of serviced

sites

Funds allocated

R'000 %

Allocation1.1a Individual housing subsidies (R0 - R3 500) Credit linked 202 - 46,968 0.28%1.1b Individual housing subsidies (R0 - R3 500) Non-credit linked 1,408 200 117,887 0.70%1.2 Housing finance linked individual subsidies FLISP (R3 501 - R7 000) 2,499 80 238,941 1.42%1.3 Enhanced Extended Discount Benefit Scheme (EEDBS) - - 68,954 0.41%1.4 Asset Maintenance Programme - - 59,060 0.35%1.5a Rectification of RDP Stock 1994 - 2002 - - 464,047 2.77%1.5b Rectification of Housing Stock (pre - 1994) - - 221,891 1.32%1.6 Social and Economic Facilities - - 145,712 0.87%1.7 Accreditation of munics (level 1 & 2) - - 93,611 0.56%1.8 Operational Capital Budget - - 442,934 2.64%1.9 Blocked Projects 2,563 170 184,326 1.10%1.10 NHBRC Enrolment Fees - - 145,191 0.87%1.11a Land Purchases - - 278,109 1.66%1.12 Updating of Housing Chapters of IDP - - 26,547 0.16%Sub-total 6,672 450 2,534,178 15.11%

13

Incremental Housing Programmes No of

housing units

No of serviced

sites

Funds allocated

R'000 %

Allocation2.1 Project Linked Subsidies (current commitments approved up to 31/03/07): Excluding blocked projects

8,597 3,414 724,896 4.32%2.2a Integrated residential development Programme: Phase 1 Planning & services (excluding Informal Settlements)

100 20,415 651,828 3.89%2.2b Integrated residential development Programme: Phase 1 Planning & services (Informal Settlements)

1,207 10,239 342,358 2.04%2.2c Integrated residential development Programme: Phase 2 Top structure construction 17,850 1,142 2,056,217 12.26%2.2d Integrated residential development Programme: Phase 2 Top structure construction Informal Settlements 8,444 583 689,686 4.11%2.2e Integrated residential development Programme: Phase 4 Top structure construction - Informal Settlements 12,384 - 663,676 3.96%2.3a Enhanced People's Housing Process (excluding informal settlement upgrading) 2,885 - 111,318 0.66%2.3b People's Housing Process (informal settlement upgrading) 9,765 120 679,293 4.05%2.4 Informal Settlements Upgrading 20,267 24,207 2,241,306 13.36%2.5a Consolidation Subsidies (Excluding blocked projects) 1,036 - 112,663 0.67%2.5b Consolidation Subsidies (blocked projects) 50 - 3,500 0.02%2.6 Emergency Housing assistance 3,442 802 407,116 2.43%Sub-total 86,027 60,922 8,683,857 51.77%

14

Social and Rental Housing Programmes No of

housing units

No of serviced

sites

Funds allocated

R'000 %

Allocation3.1 Institutional Subsidies 2,739 175 331,752 1.98%3.2a Social housing: Operational support - - 2,730 0.02%3.2b Social housing: Capital grants for rental housing 1,856 - 94,776 0.57%3.3a Community residential units (Converted/Upgraded) 1,453 100 754,575 4.50%3.3b Community residential units (Constructed) 1,504 500 417,373 2.49%Sub-total 7,552 775 1,601,206 9.55%

Rural Housing Programmes No of

housing units

No of serviced

sites

Funds allocated

R'000 %

Allocation4.1 Farm Worker Housing Assistance 128 725 32,565 0.19%4.2 Rural Housing communal land rights 35,976 8,088 2,731,808 16.29%Sub-total 36,104 8,813 2,764,373 16.48%

Other Housing Programmes No of

housing units

No of serviced

sites

Funds allocated

R'000 %

Allocation5. Priority Projects 4,035 4,829 1,062,504 6.33%6. Provincial Specific Programmes 1,648 628 126,336 0.75%Sub-total 5,683 5,457 1,188,840 7.09% TOTAL 142,038 76,417 16,772,454 100.00%

• Credit Linked Individual Subsidy Programme:– Free State, North West and Western Cape to

implement the programme;

• Financed Linked Individual Subsidy Programme:– R239 million to be spent on the FLISP programme in

Provinces and 2 500 beneficiaries to benefit;

• Rectification Programme– Plans to spend R686 million in all Provinces in

2013/14;

• Accreditation support to municipalities:– R93 million to be spent on this Programme in

Provinces except for Gauteng and Western Cape;

15

• Blocked projects:– R184 million planned to be spent to unblock

projects in Eastern Cape, Free State and North West;

• Land Parcels;– Provinces to procure land to the value of R278

million;

• Rental and Social Housing:– Provinces plan to delivery 7 552 units amounting

to R1.6 billion;

16

• Incremental Housing Programmes:– Includes Informal Settlements Upgrading and

Provinces plan to deliver 86 027 housing units and 60 922 serviced sites valued at R8.6 billion;

• Rural Housing Programme: – The Programme has been allocated R2.7 billion by

Eastern Cape, Gauteng, KwaZulu-Natal, Limpopo, Mpumalanga, Northern Cape and North West.

17

Current Challenges • Lack of bulk and link infrastructure and related funding

to implement projects;• Delays in the planning of supply chain management; • Lack of technical capacity at provinces and

municipalities;• Poor in the alignment, cooperation and coordination

of strategic objectives and programmes of Provinces, Municipalities and Entities

• Inadequate medium and long term pipeline planning for programmes and projects;

• Deficiencies in data management and integrity.

18

Interventions• Provinces and Municipalities to align all grants to

ensure bulk infrastructure is in place before implementation of programmes and projects;

• Provinces and Municipalities must develop and align programme and procurement plans

• Feasibilties to ensure programme and project readiness.

• Programme Management Units to be established and prioritised.

• Provinces to utilise the HSS to administer and report on all human settlements delivery programme and processes.

19

Measures Undertaken by DHS Provincial Business plans for 2013/14 have been

received and analysed by the DHS.

The 2013/14 Allocation letters sent to Provinces to allow for programme and project planning

From 28 February to 1 March – 3rd Quarter Mid Term reviews were conducted with Provinces and Council on Performance, Spending and Planning for 2013/14

DHS commented on 2013 DoRA Bill including Grant Frameworks.

20

Urban Settlements Development GrantGrant Purpose:Grant Purpose:

– To improve the efficiency and coordination of To improve the efficiency and coordination of investments in the built environment through:investments in the built environment through:

– Providing large municipalities with appropriate Providing large municipalities with appropriate resources and control over the selection and pursuit resources and control over the selection and pursuit of investment programmes in the built environment;of investment programmes in the built environment;

– USDG is an instrument for Metropolitan Council to address linkages between public housing and economic growth to simultaneously and contribute to Human Settlements Outcomes

21

USDG - Objectives

• USDG intends to integrate the release of well located land to the function of planning and funding of the built environment;

• Encourage cities to be proactive developers of infrastructure on well located land by mobilizing domestic capital;

• Compel improvement in development planning and Compel improvement in development planning and also improve inter-governmental co-ordination (all 3 also improve inter-governmental co-ordination (all 3 spheres) of development.spheres) of development.

22

USDG - ObjectivesIntroduced to address:

– Problems of inadequate control and management of investment in the built environment;

– Inadequate coordination of planning and weak accountability of all role players; and

– Focus on the development of urban land and infrastructure that is intended to the lay the foundation for local municipalities to gradually assume a greater role in managing built environment investments

23

USDG Allocations to Metropolitan Councils

24

Provinces Metros 2013/14 2014/15 2015/16

EASTERN CAPE Buffalo City 613,305 698,290 722,958 Nelson Mandela 727,986 828,863 858,144

Sub Total 1,341,291 1,527,152 1,581,102

FREE STATE Mangaung 596,719 679,406 703,407

GAUTENG Ekurhuleni 1,584,912 1,804,532 1,868,280 Jo'burg 1,488,877 1,695,189 1,755,074 Tshwane 1,290,611 1,469,450 1,521,361

Sub Total 4,364,400 4,969,171 5,144,715

KWAZULU-NATAL eThekwini 1,580,999 1,800,076 1,863,667

WESTERN CAPE Cape Town 1,193,497 1,358,879 1,406,883 Grant Total 9,076,906 10,334,684 10,699,773

USDG DELIVERY PERFORMANCE

25

MUNCIPALITIESWATER SERVICE AND SANITATION

HOUSING AND HUMAN SETTLEMENTS

ELECTRICTYROADS AND STORMWATER

LAND (SERVICED AND ACQUIRED OTHER

Buffalo City 47,139,382 12,923,870 - 28,658,972 - 7,153,070Nelson Mandela 123,987,871 71,989,848 - 10,524,744 134,512,616Mangaung - - - 70,946,539 126,089,315 17,899,232Ekurhuleni 140,574,669 4,739,179 67,820,596 181,493,526 - 8,636,244City of JHB 95,953 103,667 18,176 20,542 - 10,589,000City of Tshwane 116,588;787 186,083,634 7,535,043 - - 142,811,519eThekweniCity of Cape Town 82,850,238 76,017,973 35,384,288 88,186,274 13,976,327 34,437,491

Achievement not linked to costs

Challenges Lack of Coordination and alignment

experienced within Metros that causes poor service delivery coordination for USDG;

Lack of capacity to carry out programme plans;

Critical vacancies and consistency of personnel managing the USDG;

Land acquisition challenges and limited land in close proximity to the city centre;

26

Multi-year projects are budgeted for in one financial year due to inadequate planning of projects;

Lengthy procurement processes; Legal challenges - Tenders being contested in

court for major projects; Management and governance of informal

settlements;

27

Interventions

• Improving the alignment and coordination in implementation of the USDG;

• Capacity constraints to be addressed through the Cities Support Programme established by National Treasury;

• Metropolitan Municipalities encouraged to appoint officials on a full time;

• Land acquisition management to be improved with the assistance of the Housing Development Agency;

28

• Conducting of project readiness and attached list of projects as addendum to Performance Matrix;

• Councils to develop a programme plans aligned to procurement plans

• National and Provincial support for land acquisition, informal settlement upgrading and policy formulation to support council implementation

29

Support Processes In Place • The Department has developed and presented a

turnaround strategy to improve spending for the Councils’ and presented to Technical MinMec, Portfolio Committee on Human Settlements etc.

• Performance Matrix developed that addresses human settlements related issues

• Consulted with National Treasury to incorporate the matrix in the Service Delivery Business and Implementation Plan (SDBIP) reporting template so as to have one single reporting template

• Support to be provided through the National City Support Programme (CSP) to the Metros with capacity constraints.

30

Support Processes In Place• The Department has the following systems in

place for monitoring the implementation of the USDG:– Quarterly oversight visits are planned with all Councils

to monitor progress and to address challenges.– Quarterly reviews are conducted with Metros.– Monthly Expenditure Analysis and Quarterly feedback

to individual metros.– Regular reviews and programme and policy support

with Sector Department to Councils – City Budget Forum, Outcome 9, NUSP and Accreditation .

31

32

Rural Households Infrastructure Grant

• The purpose of the Grant is to provide capital funding for the reduction of rural water and sanitation backlogs and to target existing households where bulk dependent services are not available.

• The grant was initiated as a schedule 7 grant in the 2010/11 financial year and amounted to R1.2 billion.

• The grant has allowed for 50 065 Household to have been served with basic sanitation since its inception in 2010.

33

•The schedule of the grant has changed from schedule 7 to 5b with effect from 2013/14.•The Grant will be implemented by municipalities with the support of the Department•For the next three years the grant allocation is as follows:

2013/14: R106 million 2014/15: R113 million and 2015/16: R118 million.

RHIG Allocation per MunicipalityEastern Cape 2013(R’000) 2014/15(R’000) 2015/16 (R’000)

Mbhashe 4 500 4 500 4 528

Mnquma 4 000 4 500 4 000

Engcobo 4 511 4 000 4 000

Elundini 4 000 4 500 4 000

King Sabata Dalindyebo 4 000 4 500 4 000

Matatiela 4 000 4 500

Total Eastern Cape 25 011 27 000 20 528

34

Free State 2013/14 (R’000) 2014/15(R’000) 2015/16 (R’000)

Maluti a Phofung 4 000 4 500 5 000

Total Free State 4 000 4 500 5 000

RHIG Allocation per Municipality

KWAZULU-NATAL 2013/14 (R’000) 2014/15 (R’000) 2015/16 (R’000)

Umzumbe 4 000 4 500 5 000

Umnambithi/ladysmith 4 000 4 124 5 000

Umvoti 4 000 4 000 5 000

Dannhouser 4 000 4 500 4 000

Nongoma 4 500 4 000 5 000

Jozini 4 000 4 000 5 000

Umhlathuze 4 000 5 000 5 000

Umlalazi 4 000 4 000 5 000

Ndwedwe 4 000 4 000 5 000

Umzimkhulu 4 000 4 500 5 000

Total -KwaZulu- Natal 40 500 42 624 49 000

35

RHIG Allocation per Municipality .

LIMPOPO 2013/14 (R’000) 2014/15 (R’000) 2015/16 (R’000)

Great Giyane 4 500 4 000 5 000

Great Tzaneen 4 000 4 500 4 500

Thulamela 4 000 4 500 4 500

Lepel- Nkumpi 4 000 4 500 4 500

Great Tubatse 4 000 4 500 4 500

Total Limpopo 20 500 22 000 23 000

36

MPUMALANGA 2013/14 (R’000) 2014/15 (R’000) 2015/16 (R’000)

Nkomazi 4 500 4 500 4 000

Total Mpumalanga 4 500 4 500 4 000

RHIG Allocation per MunicipalityNORTHERN CAPE 2013/14 (R’000) 2014/15 (R’000) 2015/16 (R’000)

Ga- Segonyana 4 210 4 500 4 000

Total Northern Cape 4 210 4 500 4 000

37

NORHT WEST 2013/14 (R’000) 2014/15 (R’000) 2015/16 (R’000)

Ratlou 4 000 4 500 4 000

Greater Taung 4 000 4 500 4 000

Total North West 8 000 9 000 8 000

National Total 106 721 113 124 118 328

Departmental Support To Municipalities

The Department will support municipalities in the following manner:

• approve the business plans submitted by municipalities;

• Continuously monitor implementation and provide support to municipalities;

• Submit monthly financial and quarterly non- financial reports to National Treasury;

• Submit an annual evaluation report after the end of the financial year; and

• Prepare a payment schedule for the transfer of the grant to municipalities.

38

• The Department is in the process of filling vacant posts at regional offices in order to provide support.

• Monitoring and reporting processes and schedules are being developed to report on financial and non-financial progress

39

40

Thank you