Four provinces may lose housing grants because of under-performance

11 Jan 2011

Four provinces face the prospect of losing part of their annual human settlements grant because of a failure to meet monthly delivery targets for low-cost housing.

The Department of Human Settlements currently distributes approximately R14 billion a year to provinces for low-cost housing and related projects.

"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," the Director-General of Human Settlements, Thabane Zulu, announced in Pretoria today Tuesday, 11 January 2011.

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

Human Settlements Minister Tokyo Sexwale warned the Parliamentary Portfolio Committee on Human Settlements last November that a number of provinces were under-performing when it came to the delivery of low-cost housing.

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 delivery targets.

"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.

"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, will 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."

Statement issued by Mandulo Maphumulo, Department of Human Settlements, January 11 2011

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