Enough with the secrecy

2011-06-08 00:00

RECENT accusations levelled against KZN Human Settlement MEC Maggie Govender, citing evasiveness in failing to answer ongoing questions around the R1,6-billion Vulindlela housing project in the pro-vince amid further revelations that some of South Africa’s top political families are allegedly linked to the development company, merely scratch the surface of what the Democratic Alliance believes is a far more serious problem facing housing delivery in our province. Leading the charges made by the DA is the allegation that African National Congress president Jacob Zuma’s brother is a shareholder in the development company, Dezzo Construction. Meanwhile, fingers have also been pointed at senior politicians in our own KwaZulu-Natal provincial legislature.

When Govender initially announced the Vulindela housing project, comprising 25 000 housing units at an estimated cost of R1,6 billion, she claimed that the project was in its feasibility phase and would be approved as a joint venture. The DA had meanwhile been informed via a reliable source that the project had, in fact, already been approved and a developer selected. When pushed for clarification on the matter, the MEC refused either to confirm or deny­ the allegation and was only prepared to say that it was a partnership between traditional leaders and a developer. When pressed for further information, she suddenly clammed up, declining to name the developer. The Constitution of the Republic of South Africa Section 217(1) states: “When an organ of state in the national, provincial or local sphere of government, or any other institution identified in national legislation, contracts for goods or services, it must do so in accordance with a system which is fair, equitable, transparent, competitive and cost-effective.”

In the process of contracting with the Vulindlela Development Association (VDA), as well as the subsequent appointment of Dezzo Holdings by the VDA, the KZN Department of Human Settlement’s actions are a radical departure from the above requirements. The process of the formation of the VDA was driven by a single entity, Dezzo, which has been appointed by the VDA, without tender. Dezzo initiated this initiative and not the amakhosi as is now claimed. The question which remains unanswered is: how were the five amakhosi approached, and by whom? Two of the amakhosi have since indicated that they were not properly informed about this initiative, but appear to have been instructed now to make no further comment. It is our contention that the procurement process has included only one service provider to the exclusion of all others, which is not only unfair but a clear violation of procurement regulations.

When government subsidies and funding are utilised, the project must go to public tender in terms of the Supply Chain Management process. In addition, the allocation of the management of R2,1 billion of public funds to a single company is not equitable in the context of the subsidised housing sector. The department has a responsibility in terms of procurement regulations to nurture and develop emerging companies in the sector, and yet it has allowed, through the VDA, a sum equivalent to a staggering 70% of its annual budget to be placed under the control of a single, established company. A tender of this magnitude — R1,6 billion — should never be awarded to a single entity.

The allocation of this sum to a single area within a single municipality means that most other municipalities in the province, and even other communities within Msunduzi, will be deprived of an equitable share of the housing fund for years to come. In excluding Msunduzi Municipality from the project, the department has also prevented the municipality from planning, prioritising and implementing development in its area of jurisdiction for years to come in terms of its own Integrated Development Plan, as required by the Municipal Structures Act. The department’s actions directly contradict sections 151(4), 154(1) and 155(6)(b) of the Constitution in terms of housing policy which indicate that the municipality should be the developer, and therefore responsible for procurement and decision-making with regard to the contracting strategy. Yet the department failed to consult with Msunduzi, or include the municipality in a tripartite agreement with the VDA as is required. Another concern is that beneficiaries have been asked to sign lease agreements for houses. If government subsidies are utilised then beneficiaries should be receiving title deeds to their homes. This begs the question — who will actually own the houses?

In her last budget speech, the MEC stated that building capability among stakeholders within the housing sector, with particular reference to the local government sphere, was a priority. The MEC’S actions with regard to the Vulindlela project, however, do not support this. What is abundantly clear is that a considerable amount of preparatory work, including much interaction with Dezzo and various other stakeholders, must have secretly taken place at the same time as the development was out to public tender. How else would it have been possible for such an agreement to be concluded as quickly and decisively? When government funds are used for development, competitiveness requires that a sufficient number of suppliers be afforded the opportunity to make bids. Competition between suppliers results in higher efficiency levels within competing firms and better prices for the beneficiary — in this case, the residents of Vulindlela. Small, medium and micro enterprises (SMMEs) must, by law, be put in a position to compete with large established firms. However, the competitive process for the Vulindlela housing project was cancelled by the department in order to proceed with a totally uncompetitive appointment to a large established company clearly based on know-who as opposed to know-how.

We challenge Govender to come clean and inform the public as to the number of projects Dezzo has either contracted, or on which it is working at risk (to be appointed, pending proof of project viability), and the collective value of these projects. This is especially so because at a workshop held in Durban on March 3, hosted by the department, Govender specifically stated that implementing agents or project managers should not be appointed to more than four projects at any one time.

While it is tempting to place responsibility for the myriad problems associated with housing in our province at the door of Govender, the unfortunate truth is that there is a long-standing culture of deals for pals within the department. Sadly, she has inherited a department with a work ethic that erstwhile provincial MEC for Housing, Mike Mabuyakhulu, did little or nothing to alter. It is also clear that the Vulindlela debacle has arisen as a panicked reaction to the department’s own inability to deliver on top of the scandalous loss of funds from the national grant allocation for housing in the past financial year due to inability to expend the funds.

This does not, however, permit the department to break the law. However, if the MEC is planning on outsourcing the department’s functions on such a grand scale, she will soon need to inform the public as to how many redundancies will be made from the department’s current staff complement.

It’s time for the department’s secrecy to make way for transparency and accountability on how public funds are being expended.


• George Mari is a veteran politician and is the Democratic Alliance spokesperson for Human Settlement in KwaZulu-Natal. He is also a long-standing member of the province’s housing portfolio committee.


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