Backlogs, shoddy workmanship and underspending haunt housing delivery {writer: Piet Coetzer}

Providing decent and affordable housing for all South African citizens, particularly for the lower income cadres, remains one of the country’s greatest challenges. The reason for the problem does not appear to be a financial one, but the state of skills and capacity is certainly insurmountable.

It recently came to light at a Master Builders South Africa (MBSA) crisis summit that some 8 000 state-funded housing projects throughout the country are experiencing blockages.

A briefing of parliament’s Housing Settlements Portfolio Committee revealed it would cost the Department of Human Settlements approximately R58 billion to fix poorly built houses that were delivered by private contractors.

In the meantime, protests over the non-availability of housing are increasingly turning violent, and it seems last year’s pattern of violent service delivery protests are set to continue in the politically charged atmosphere of upcoming local government elections.

In a resolution adopted at the summit, the construction sector undertook to help the state resolve the blockages problem.

Speaking at the summit, Department of Human Settlements operations chief Neville Chainee asked for the sector’s help, saying that the “huge amount of structural inefficiency and deficiency” in the department had led to an inability to spend.

“How do we (together) analyse all 8 000 projects? We (the department) don’t have all the answers,” he said.

Other resolutions made at the summit were to use the R5.4bn in funds made available by Eskom for retrofitting existing buildings for energy efficiency, and to boost the sector and create jobs; creating a “process” for the production of accurate statistics and indices for the sector; involving South Africa’s youth with training in “the vast amount of work that must be done”; and establishing better transformation guidelines.

The government’s poor ability to spend meant it was “exceedingly difficult” to get details on the state’s R850-billion infrastructure spending budget, said MBSA president, Jean-Marie Talbot. These funds run to 2013.

Job creation

Public and private sector payment delays impinged on the sector’s growth and jeopardised the sustainability of small and medium enterprises. Delays of up to 90 days were common, Talbot said.

An “early casualty” would be jobs, he added.

The government’s New Growth Path has committed South Africa’s leaders to creating five million jobs over the 10 years to 2020. However, the initiative has been repeatedly criticised for its vagueness.

According to industry researcher Llewellyn Lewis, the construction sector employed about one million people, 400 000 formally, and contributed 22% to the country’s gross domestic product in 2009.

Recovery was dependent on the banks whetting their appetite for risk and increasing their financing of construction, he added. “Financial institutions have inordinate power... they make the rules of the game.”

It was an ideal time to borrow money and invest in the public sector infrastructure that had been neglected over the past 30 years, said Lewis.

Banks had reduced their lending criteria “quite considerably” over the last year, but this had not translated into increased credit demand yet, said Pierre Venter, general manager for human settlement at the Banking Association South Africa.

The “green economy” would bring about the “revolution” in the construction sector, he added.

Fixing bad workmanship

Thabane Zulu, director-general at the Department of Human Settlements, told the parliamentary portfolio committee, at its meeting in mid-January this year, that it would cost approximately R58bn for the department to fix poorly built houses.

In a statement released after the committee meeting, the Democratic Alliance (DA) said: “Of greater concern was the further admission that the department has not yet found a way to blacklist contractors who had built these substandard houses, and that many of these unfit contractors may still have contracts with the national government to build more substandard housing.

“These contractors are directly sabotaging the lives and human dignity of millions of South Africans with utter disregard for the consequences.”

Trade union federation and ruling alliance partner, the Congress of South African Trade Unions (Cosatu), has called for heads to roll after the disclosure – calling the bill, all for the account of the taxpayer, a “painful example of corruption, gross negligence and incompetence”.

“The Minister of Human Settlements Tokyo Sexwale must urgently rectify the problems with these houses and ensure that those responsible for this disaster are brought to book,” Cosatu said in a statement.

Furthermore, it expressed “even more outrage” at Zulu’s admission that the department had not yet found a way to blacklist the contractors who had built the “substandard houses”.

Cosatu said the “outrage” strengthened the argument for measures to be taken to stop the abuse of tendering procedures that had allowed incompetent builders to continue winning government contracts and failing to deliver the much-needed houses to the people.

The DA called for urgent action to be taken to implement an effective system of monitoring and oversight of building contractors to ensure contractors who deliver substandard housing are not only held accountable for their poor service delivery, but are also banned from engaging in future contracts.

Underperforming provinces

In the interim, Sexwale announced that two underperforming provinces would lose R463 million in low-cost housing grants after they failed to meet the department’s delivery targets.

He said the money would be used to address the housing delivery backlog in other provinces.

Around R263m would be taken away from the Free State and R200m from KwaZulu-Natal. These funds would be given to the Northern Cape and Limpopo Province after they achieved their delivery targets.

The Northern Cape would use R182m for the construction of more than 2 000 new houses and in the upgrading of 350 units in informal settlements.

Limpopo would use R131m for the construction of 5 300 houses in 17 districts for its rural housing programme.

The minister’s special adviser Chris Vic said that the other provinces were being watched. “We obviously monitor expenditure in all nine provinces,” he said. “We have to keep a close watch on delivery.

“December was filled with holidays (and) there’s been a lot of rain, so that’s obviously also going to impact on structures.”

Violent protest

In Cape Town early this year, black smoke billowed across morning rush-hour traffic when angry backyarders in Nyanga blockaded Lansdowne Road with burning tyres, forcing commuters to find alternative routes to work.

The backyarders from Nyanga’s Mau-Mau, Old Location and White City areas were protesting over the lack of housing and demanded that the provincial government allocate houses to backyarders in housing projects in the area.

About 500 protestors blocked the busy thoroughfare for hours before police were forced to disperse them by firing rubber bullets.

The backyarders claimed that newly built houses were being allocated to shack dwellers from other areas rather than to those living in the same area as the housing project.

Some of the protesters claimed that they had been waiting for houses for “over a decade”, and the promises made to them had been broken.