The city of Cape Town should not be expected to carry on its own the N2 Gateway’s overrun costs and contractors’ claims of close to R200-million as the project was undertaken as an “unfunded mandate at the directive” of the national department of housing, says executive mayor Helen Zille.
In a letter sent to Housing Minister Lindiwe Sisulu on Monday, Zille said she would ask senior counsel to determine “how much of ratepayers’ money the city would have to pay” for a flagship project that had exceeded its budget and gone beyond its deadline for completion.
“While we concur with the broad objectives of Breaking New Ground (the national housing policy), we note that this statement of intent has not been costed or funded and therefore cannot be implemented.”
‘The project thus far is shocking to say the least’
Zille said that, “without prejudice”, the city would support the N2 Gateway only if it was tackled in accordance with established national policies and the city’s integrated development plan.
Sisulu said that, as the minister, she did not conduct relations with other spheres of government through the media. She said she “understood that Zille was new, but by now she should have familiarised herself with government protocol”.
The matter would be referred to the MEC for Local Government and Housing, Richard Dyantyi, to “whom Ms Zille accounts”, said Sisulu.
Dyantyi said he “respected the platforms of communication that had been created” and would comment on Zille’s letter only after a meeting of the three levels of government involved in the project.
Zille said the allocation of the units was the “most complex” aspect of the development and had to be shared by the city and the province.
“I am not passing the buck, but it should not just be the city’s responsibility.”
Dyantyi was on record as having said the N2 Gateway was not the city’s responsibility, Zille said.
Seth Maqetuka, city director of human settlements, said at the weekend that only 11 families had qualified for accommodation in the first phase of 705 units.
The ambitious 22 000-unit development has been mired in controversy since its launch last year as an intergovernmental initiative involving the city, province and national department of housing.
Responsibility for the project management of the development was transferred from the city to the province in February, shortly before the March 1 elections.
DA councillor Neil Ross, of the housing portfolio committee, told the council last week that overrun costs of more than R35-million would have to picked up by the city.
Zille said there were indications that each unit would cost R160 000, double the R80 000 initially estimated.
Ross said claims by contractors who had not been paid could cost the city a further R160-million.
Sisulu announced in her housing budget speech that the project would be finished within three years, but Ross said Thubelisha Homes estimated that it would take at least six years to complete.
Zille’s letter said: “What has emerged about the project thus far is shocking to say the least.
“The city was required to implement this unfunded mandate at the directive of your administration and the city now faces huge claims from various companies involved in the undertaking. This we cannot accept.”
She said many contractors had worked without contracts, allowing them to charge up to three times more for building structures.
Zille referred to the forensic audit of the Cyberia contract which was tendered at R5-million but eventually cost the city a total of R12-million.
Zille said the city could not be solely responsible for any part of a project that was pushed through by national government “without a proper policy framework”.
“Before we embark on any further aspect of this project, it is absolutely essential to establish the project’s protocols,” she said.
Funding and policy needed to be established by the national housing department so that province and the city could apply these guidelines.
ANC provincial secretary Mcebisi Skwatsha said there should have been better communication with the constituencies to warn them that houses would be available for specific groups of people.
Backyard dweller organisations have already warned that there could be chaos over allocation.
o This article was originally published on page 1 of Cape Times on June 06, 2006
In a letter sent to Housing Minister Lindiwe Sisulu on Monday, Zille said she would ask senior counsel to determine “how much of ratepayers’ money the city would have to pay” for a flagship project that had exceeded its budget and gone beyond its deadline for completion.
“While we concur with the broad objectives of Breaking New Ground (the national housing policy), we note that this statement of intent has not been costed or funded and therefore cannot be implemented.”
‘The project thus far is shocking to say the least’
Zille said that, “without prejudice”, the city would support the N2 Gateway only if it was tackled in accordance with established national policies and the city’s integrated development plan.
Sisulu said that, as the minister, she did not conduct relations with other spheres of government through the media. She said she “understood that Zille was new, but by now she should have familiarised herself with government protocol”.
The matter would be referred to the MEC for Local Government and Housing, Richard Dyantyi, to “whom Ms Zille accounts”, said Sisulu.
Dyantyi said he “respected the platforms of communication that had been created” and would comment on Zille’s letter only after a meeting of the three levels of government involved in the project.
Zille said the allocation of the units was the “most complex” aspect of the development and had to be shared by the city and the province.
“I am not passing the buck, but it should not just be the city’s responsibility.”
Dyantyi was on record as having said the N2 Gateway was not the city’s responsibility, Zille said.
Seth Maqetuka, city director of human settlements, said at the weekend that only 11 families had qualified for accommodation in the first phase of 705 units.
The ambitious 22 000-unit development has been mired in controversy since its launch last year as an intergovernmental initiative involving the city, province and national department of housing.
Responsibility for the project management of the development was transferred from the city to the province in February, shortly before the March 1 elections.
DA councillor Neil Ross, of the housing portfolio committee, told the council last week that overrun costs of more than R35-million would have to picked up by the city.
Zille said there were indications that each unit would cost R160 000, double the R80 000 initially estimated.
Ross said claims by contractors who had not been paid could cost the city a further R160-million.
Sisulu announced in her housing budget speech that the project would be finished within three years, but Ross said Thubelisha Homes estimated that it would take at least six years to complete.
Zille’s letter said: “What has emerged about the project thus far is shocking to say the least.
“The city was required to implement this unfunded mandate at the directive of your administration and the city now faces huge claims from various companies involved in the undertaking. This we cannot accept.”
She said many contractors had worked without contracts, allowing them to charge up to three times more for building structures.
Zille referred to the forensic audit of the Cyberia contract which was tendered at R5-million but eventually cost the city a total of R12-million.
Zille said the city could not be solely responsible for any part of a project that was pushed through by national government “without a proper policy framework”.
“Before we embark on any further aspect of this project, it is absolutely essential to establish the project’s protocols,” she said.
Funding and policy needed to be established by the national housing department so that province and the city could apply these guidelines.
ANC provincial secretary Mcebisi Skwatsha said there should have been better communication with the constituencies to warn them that houses would be available for specific groups of people.
Backyard dweller organisations have already warned that there could be chaos over allocation.
o This article was originally published on page 1 of Cape Times on June 06, 2006
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