THE Eastern Cape department of human settlements has underspent its housing development budget by more than R400-million in the 2011-2012 financial year.
But department head Gaster Sharpley defended the under-expenditure, saying human settlements had met its housing delivery target for the previous financial year.
“We could not spend for the sake of spending. We needed to ensure that we delivered houses of good quality.”
Sharpley said the department’s productivity was up by 50% compared to last year and the underspending was only 18% of the total budget.
Of the 15 419 housing units targeted for delivery by the end of the financial year, the department was able to deliver 15 000.
“We wanted to raise productivity rather than being irresponsible and spend money without ensuring quality. The quality of these houses is extremely good. They look marketable. We are building homes, not houses. We could have easily spent the remaining funds and quickly done foundations but we didn’t because our focus is on building quality homes,” said Sharpley.
Earlier this year, the department terminated the contracts of 35 companies after they failed to show up on site. Some contractors left construction sites while houses were still in the foundation phase.
“The under-expenditure will continue until the department first plans for infrastructure before they set targets and ask for funding from national government. The projects take time to complete because infrastructure needs to be put in place before any top structure is built,” the UDM’S Max Mhlathi said.
Sharpley said the department would apply for a roll-over of the funds to the current financial year.
Meanwhile, the department is also losing money paying for rates and levies for more than 1 000 pre1994 housing stock. The houses were given to the underprivileged to rent during the apartheid regime and in 1994 were handed over to the then department of housing.
Sharpley said the department had tried to sell the houses to the occupants but they refused to buy them once they learned they would be responsible for the rates and levies.
Each occupant pays around R300 rent per month and it costs the department about R800 per month per house to maintain the buildings and pay rates and taxes.
“The aim is to transfer the houses to the municipalities or the beneficiaries. When they are under municipalities the indigent policy will kick in,” said Sharpley.
DA’S Dacre Haddon said: “I am concerned at the capacity of the municipalities. The department is still to meet with municipalities but they have not assessed their capacity in taking over this function.” — email@example.com