Friday, December 3, 2004

State mulls creation of own cement, brick factories

The Department of Housing's far-reaching plan to provide housing for all South Africans will not only affect issues such as service delivery and access to credit and subsidies, but will also have implications for developers and material suppliers, a senior government official revealed.

Saths Moodley, adviser to Housing Minister Lindiwe Sisulu, said yesterday that government would establish State-owned cement and brick factories as a response to the practice of 'hoarding' by many material suppliers.

Moodley argued that many suppliers hold back building materials, creating a shortage and inflating prices, before releasing them in tranches and exploiting high prices.

While government does not wish to pass legislation to discourage this practice, it is set to pursue a research programme through the Council for Scientific and Industrial Research (CSIR), focusing on building and material technology. Moodley commented that it is envisaged that the CSIR would also be involved in the evaluation and monitoring of government's building-material production programme.

In regard to developers, he revealed that a recent agreement between the State and developers will facilitate a 30% black economic empowerment partnership with established developers.

Interestingly, as part of the agreement, developers will also be required to provide a minimum 20% of their profits from upmarket and lucrative developments for 'hardcore' housing - with 'hardcore poor' including pensioners and the indigent. This is similar to models found in countries such as the UK, and government will facilitate the enabling environment for this.

Meanwhile, Moodley reiterated government's aggressive and ambitious plan to eradicate informal settlements, and said the first results of this would be seen in Gauteng in two months.

He explained that government would immediately upgrade suitable land, and relocate people who live in informal settlements on unsuitable land.

Part of this plan also includes the provision of access to proper services, security, choice and formal top structures.

In addition, the State is set to provide access to subsidies of up to R28 500 to the hardcore poor, with no savings requirement; and access to a home for rental or ownership, valued R28 500, and a cash or 'sweat equity' contribution for the poor (those with access to some sort of employment).

For those earning between R3,500 and R7,000 a month, government will provide a contribution to the deposit required for mortgages.

In order to successfully implement government's overall housing plan, Moodley pointed out that the Department of Housing's role has been redefined - from being a department of 'low-cost housing' to being a department responsible and responsive to the entire residential market, which will strive to reverse apartheid spatial planning.

- Engineering NEWS