Eastern Cape govt fails to spend its R338m budget on housing

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Lindiwe Sisulu.
Lindiwe Sisulu.
  • The Eastern Cape human settlements department said it failed to spend R338 million last year due to the impact of hard lockdown.
  • The money, meant to build houses in Amathole District municipality and Nelson Mandela Metro, was taken and distributed to other provinces. 
  • There are 115 townships in the Eastern Cape which had been earmarked for upgrades. 

The Eastern Cape human settlements department failed to spend R338 million allocated for housing developments in the past financial year. 

The money was then taken and re-allocated to other provinces.

Human Settlements Minister Lindiwe Sisulu revealed this during her budget vote speech in the national council of provinces in Cape Town on Friday.  

This is even though there are 115 townships in the Eastern Cape which had been earmarked for upgrades. 

The two metros in the province, Buffalo City in East London and Nelson Mandela Bay in Gqeberha, also have a further 43 and 8 townships earmarked for upgrades. 

Sisulu revealed that the Eastern Cape is one of four provinces that failed to spend, followed by the Free State and North West with R100 million each and Limpopo with R50 million.

READ | Treasury to block R384m funding for Alfred Nzo Municipality due to poor performance

Sisulu said the funds blocked from the four provinces were diverted to Gauteng, Mpumalanga, Northern Cape, and Western Cape. 

Sisulu said she invoked section 18 and 19 of the 2020 division of the Revenue Act and blocked  the funds from the provinces after they had difficulties in spending it. 

The Duncan Village Priority project in East London
The Duncan Village Priority project in East London is one of many government funded housing projects that were affected by lockdown restrictions.

She said the move came after she had had several meetings with MECs of the provincial departments where there were discussions about their recovery plans. 

READ | Why birds in the Eastern Cape have been dropping dead from the sky

Contacted for comment, the Eastern Cape human settlements department blamed Covid-19 for the underspending. 

The head of the department Tabisa Poswa said: "The full lockdown between March 2020 to June 2020 impacted on all contractor’s performance.

The Duncan Village Priority project in East London
The Duncan Village Priority project in East London is one of many government funded housing projects that were affected by lockdown restrictions.

"The Covid-19 pandemic in the 2020/2021 financial year was, as is well known, devastating for many small businesses in that many contractors struggled for a significant time after June 2020 to re-establish on site (work) due to the restrictions on their operations, a lack of human resources, a shortage of material supplies, and the onerous health and safety requirements of the pandemic."

She said the turnaround time for the delivery of building materials was significantly prolonged, which in turn affected the performance of the contractors on site. 

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"During June 2020 at the end of second quarter of the financial year, the Department was not able to meet the targets on key performance areas and underspent due to the slow reestablishment on site by contractors and their ability to regain their human resources back on site and the impact of the new Covid Regulations on the contractors to re-establish [work on] site,” said Poswa.

She also revealed that the money that was blocked was meant for projects in Nelson Mandela Bay Metro and Amathole District Municipality. 

Poswa said:

There was also shortage of material supply because the manufacturers were also closed and all these industries were impacted by the new Covid regulations on occupational, health and safety requirements. Turn-around time for material delivery was significantly increased, resulting in slower performance on sites.

Poswa said, despite the difficult situation presented by lockdown, more than 70% of the budget was used and can be accounted for.

She said out of 6 807 houses which were targeted for construction, the department managed to build 5 338 houses. 

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