Draft Provincial Recovery Plans

Portfolio Committee Meeting

13 February 2013

HSDG Expenditure - Sept:2012HSDG Expenditure - Sept:2012

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Provinces

Total Available

Year to date (1 April 2012 - 30 September 2012)

Transferred Funds

Spent by Provinces

Variance Spent vs Transfer-

red

Variance Spent vs

Total Available

Transfer-red as % of voted

funds

Spent as % of Total Available

Spent as % of

Transfer-red Funds

Unspent as % of

Transfer-red

Funds

Unspent as % of

Total Available

R'000 R'000 R'000 R'000 R'000

Eastern Cape 2,292,859 805,217 628,292 176,925 1,664,567 35% 27% 78% 22% 73%

Free State 961,619 544,590 272,646 271,944 688,973 57% 28% 50% 50% 72%

Gauteng 4,003,776 2,087,668 1,051,470 1,036,198 2,952,306 52% 26% 50% 50% 74%

KwaZulu-Natal

2,915,297 1,485,810 1,297,041 188,769 1,618,256 51% 44% 87% 13% 56%

Limpopo 1,471,617 870,194 497,624 372,570 973,993 59% 34% 57% 43% 66%

Mpumalanga 965,127 464,912 400,086 64,826 565,041 48% 41% 86% 14% 59%

Northern Cape

339,551 148,291 108,358 39,933 231,193 44% 32% 73% 27% 68%

North West 1,050,933 636,364 522,828 113,536 528,105 61% 50% 82% 18% 50%

Western Cape 1,725,180 695,058 629,164 65,894 1,096,016 40% 36% 91% 9% 64%

Total 15,725,959 7,738,104 5,407,509 2,330,595 10,318,450 49% 34% 70% 30% 66%

HSDG Expenditure Prelim - 31 October 2012HSDG Expenditure Prelim - 31 October 2012

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Provinces

Total Available

Year to date (1 April 2012 - 31 October 2012)

Transferred Funds

Spent by Provinces

Variance Spent vs Transfer-

red

Variance Spent vs

Total Available

Transfer-red as

% of voted funds

Spent as % of Total

Available

Spent as % of

Transfer-red

Funds

Unspent as % of Transfer

-red Funds

Unspent as % of

Total Availabl

e R'000 R'000 R'000 R'000 R'000

Eastern Cape

2,292,859 1,029,357 776,294 253,063 1,516,565 45% 34% 75% 25% 66%

Free State 961,619 658,767 322,446 336,321 639,173 69% 34% 49% 51% 66%

Gauteng 4,003,776 2,485,039 1,665,421 819,618 2,338,355 62% 42% 67% 33% 58%

KwaZulu-Natal

2,915,297 1,761,527 1,543,092 218,435 1,372,205 60% 53% 88% 12% 47%

Limpopo 1,471,617 1,002,019 605,067 396,952 866,550 68% 41% 60% 40% 59%

Mpumalanga 965,127 497,712

440,273 57,439 524,854 52% 46% 88% 12% 54%

Northern Cape

339,551 172,186 135,722 36,464 203,829 51% 40% 79% 21% 60%

North West 1,050,933 725,980 625,944 100,036 424,989 69% 60% 86% 14% 40%

Western Cape

1,725,180 798,837 727,164 71,673 998,016 46% 42% 91% 9% 58%

Total 15,725,959 9,131,424 6,841,423 2,290,001 8,884,536 58% 44% 75% 25% 56%

Non-Financial Performance 30 Sep 2012Non-Financial Performance 30 Sep 2012

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Province

Annual Delivery TargetsDelivery Performance

30 September 2012Variance Delivery

sites

Variance Delivery

Top Structure

Total Variance DeliverySites

(units)

Top Structure

(units)

Total Delivery Targets

SitesTop

Structure (units)

Total Delivery

Performance

Eastern Cape 17,366 17,999 35,365 2,503 2,783 5,286 (14,863) (15,216) (30,079)

Free State 27,264 8,300 35,564 952 1,410 2,362 (26,312) (6,890) (33,202)

Gauteng 14,536 26,348 40,884 2,926 8,612 11,538 (11,610) (17,736) (29,346)

KwaZulu-Natal

9,305 29,399 38,704 3,749 10,774 14,523 (5,556) (18,625) (24,181)

Limpopo 14,577 17,760 32,337 1,696 4,874 6,570 (12,881) (12,886) (25,767)

Mpumalanga 5,914 10,015 15,929 125 3,705 3,830 (5,789) (6,310) (12,099)

Northern Cape

2,785 2,646 5,431 503 582 1,085 (2,282) (2,064) (4,346)

North West 3,717 10,167 13,884 695 7,555 8,250 (3,022) (2,612) (5,634)

Western Cape

10,175 7,332 17,507 2,756 5,066 7,822 (7,419) (2,266) (9,685)

Total 105,639 129,966 235,605 15,905 45,361 61,266 (89,734) (84,605) (174,339)

Eastern CapeEastern Cape

• Budget allocation – R2.3 billion.

• Provincial spending – R 800million.

• Balance to be spent by 31 March 2013 is R1.492bn

• Tranche payment to NMBM R80m

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• Delivery – 5 286 units.

• Breakdown of 12 000 units @ R200 million.

•  SHRA payment on capital nfrastructure R150m

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• The Province has indicated a number of reasons for underperformance including long planning processes, focus of rectification in NMMM, poor contractor performance and replacement of 70 underperforming contracts terminates which is time consuming.

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• Interventions put in place by the Province to remedy the situation include the appointment of contractors who have established site.

• 7000 new services for sites in Chris Hani District will be completed in this financial year.

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• The Province also intends to use the SHRA to improve performance rental projects that were not planned for as well as the purchase of land parcels for social and rental.

• Although the Province reversed its intention to surrender the funds, it was envisaged that the Province would not spend its entire budget by the end of the financial year. 

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Free StateFree State

• Free State allocated R 961.619 m for HSDG for 2012/13

• Expenditure to 31 October 2012 amounted to R 322.446m

• Expenditure percentage at 31 October 2012 is 34%

• Delivery performance was 698 Units

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• The Free State province still to put corrective measures to remedy under-expenditure and financial variances.

• A team has been established to attend to payment queries totalling R 34.743 m.

• A committee was established to monitor, prioritise and assist with resolution of all outstanding queries and prevent future recurrence of such matters.

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• The team was to undertake:

- Assess HSS user access rights and reassign if necessary to avoid unauthorised changes on HSS.

- Consult DHS on HSS to obtain audit trails for material changes effected on the system

- The province aims at tightening the monitoring of financial performance.

- This is aimed at recouping unspent funds of R57 million by means of legal action implemented by the department.

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• The province intended to reprioritization of funds for infrastructure and internal reticulation in the amount of R189 million to be made available to municipalities.

• Re-prioritization of funding to social and rental housing to the value of R57 million.

• The province was evaluated not positioned to spend its entire allocation but committed to improve spending.

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GautengGauteng

• Budget allocation – R4 billion

• Provincial spending – R1,6 billion

• Delivery – 11 538 units

• Speedy processing of capital claims to the value of R12 million in process.

• Speedy resolution of geo-tech and enrolment claims amounting to R72 million

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• Still was to conclude on SCM and legal processes with the aim of spending R280 million on projects valued at R500 million.

• Intention to pay attention to monitoring 98 active projects.

• Intention to increase capacity on planned projects.

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• The province had no intention to surrender any funds even though the spending is less than projections;

• The province indicated the lack of bulk infrastructure as factor inhibiting the implementation of various human settlements’ projects.

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• Given the large allocation to the province, monitoring will be improved to determine the feasibility in the outcomes in the implementation of the recovery plan

• However the decision will again be reviewed and reversed should the situation not improve.

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KZNKZN

• No recovery plan submitted;

• The province is in a position to spend.

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LimpopoLimpopo

• Budget allocation – R1,4.7 billion

• Provincial spending – R605 million

• Delivery is at 6 570 units

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• The province has reduced units from underperforming contractors to performing contractors;

• Re-directed the budget from pre-construction challenges to construction of houses;

• Still to meet material suppliers to work on supply/delivery improvement plan.

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• Contractors will be grouped according to their capabilities to ensure focus on quick wins.

• Future cash flow projection has been revised;

• The province has indicated the surrendering of R33.5 million, ring-fenced for disaster funds.

• The possibility of under spending is high and the province may under-spend and surrender.

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MpumalangaMpumalanga

• Budget allocation – R965 million

• Provincial spending – R497.7 million

• Delivery is at 4 029 units

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• The province has indicated a slow start on PHP projects which affected a number of municipalities in providing a list of new wards;

• The lack of bulk infrastructure remained challenge;

• R97 million will be spent in November 2012;

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• Funds have been redirected to Govan Mbeki municipality whilst the process of exhuming the greaves is being dealt with;

• The province still to consult with Bushbuckridge Municipality for an alternative site for project implementation.

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• Additional claims of R23.9 million payable in November 2012 - slabs, wall plates, roofing and completions;

• An amount of R27 million will be spent in November in a number of Municipalities;

• The province is in a position to spend its entire allocation, therefore no threat of under-expenditure exists.

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Northern CapeNorthern Cape

• Budget allocation – R339.6 million

• Provincial spending – R140 million

• Delivery – 1 085 units

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• The province has indicated challenges related to SCM processes and the delay in awarding of tenders to contractors due to tenders that have been received as higher than the approved subsidy quantum to build the 40m2 house.

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• A challenge exists of a small allocation over the MTEF period limits the province to construct limited number of units and the awarding of tenders as the contractors see this as financially not viable.

• Funds were shifted from slow moving projects to projects that will deliver at better scale.

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• Small projects were consolidated into larger sized projects especially in remote areas for the project to be viable for the contractor.

• Re-directing of funds as additional to other Municipalities as the contracts expire by end of March 2013.

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• The Province has contractually committed project to the value of R203 million to be completed by 31 March.

• Additional R119 million to be spent on projects that are ready.

• Given that the Province has the lowest allocation it is not advisable to reallocate money out of the Province.

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• The situation will be closely monitored and if performance does not improve by end December 2012, the decision not to reallocate funds out of the province will be reversed.

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North WestNorth West

• Budget allocation – R 1 billion• Provincial spending – R584 million• Delivery – 8 250 units• The Province increased the number of units

by 1 918 with the aim of receiving additional funding from underperforming Provinces.

• The Province will spend their entire budget.

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Western CapeWestern Cape

• Budget allocation – R 1.7 billion

• Provincial spending – R727 million

• Delivery – 10 279 units 

• The Province increased its target from 17 507units to 24 741 units.

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• The Province indicated a number of projects that are under construction with sites to be reported as complete in the 4th quarter.

• Projects will be accelerated in the 3rd and 4th quarter.

• The targets per Municipality were revised twice in first two quarters of the financial year.

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• The Province was still to gazette the Municipality allocation in November.

• Funding is being reprioritized to Municipalities that can accelerate delivery.

• These projects will show positive results in the 4th quarter.

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• 12 key projects to yield 2 676 units have been selected for acceleration and approved.

• The 6 other key projects will be approved in November and consequently will yield units by financial year end.

• The Province may surrender a portion of its allocation.

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RECOMMENDATIONSRECOMMENDATIONS

• That Provinces where required increase and re-direct funds for land purchases through HDA, within required mandate, but SLA’s must be signed;

• That Provinces all for utilisation of the OPSCAP for operational costs of the FLiSP by the NHFC confined to the 2012/13 financial year;

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• Where there is good performance and progress in respect of Upgrading of Informal Settlements, funds will be re-allocated to ensure initial shortages are funded.

• Confirm the need to upscale UISP over other milestones that are not realizable and not achievable by end of the financial year;

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• That funds be re- directed to Social and Rental Housing to SHRA.

• The SHRA has been tasked to prepare pipeline projects that are able to be implemented this financial year;

• Proposed that a increase and re- direction of funds to NHFC for the implementation of the FLISP programme for the 8 provinces that have already signed the Implementation protocols;

•  

•  

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• That provisions be made for additional funding to programmes and projects that are showing results but were inadequately funded in the business plans including Rural Housing.

 

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Thank YouThank You

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