National government housing agency Thubelisha Homes never had a mandate from the cabinet to manage the N2 Gateway housing project.
This was why Thubelisha "got into financial difficulties", said the company's chief operations officer, Mano Pillay, on Tuesday at Parliament's human settlements' portfolio committee.
Pillay said the National Treasury declined to approve the Section 21 company's budgetary requests as its mandate, given by former housing minister Lindiwe Sisulu, was never approved by the cabinet.
Thubelisha declared itself technically insolvent in 2008.
The company will cease operation from July 31.
Pillay said the company had assumed when given the mandate by Sisulu that all the legalities would be met by the national Housing Department.
Desperate to perform, Thubelisha "went into projects no one else would touch with a barge pole".
But Morris Mngombzulu of the national Housing Department said Sisulu had asked the cabinet to approve a mandate for emergency housing and that Thubelisha would be authorised to build them.
"When cabinet approved the emergency housing we assumed it was a blanket approval for all projects. It's a question of interpretation."
He said at an official level, it should have been mentioned that Thubelisha would be responsible for megaprojects such as the N2 Gateway.
Pillay said Thubelisha would be getting funding of R6,3-million for the 2009/10 financial year, but that this would contribute to operational costs.
The company survived on the interest of income from the provinces, about R2m a month.
Arron Steyn, of the Democratic Alliance, asked how the then housing minister could expect Thubelisha to produce 22 000 housing units for the N2 Gateway when the company only managed to build 13 000 houses in the past few years.
Mngombzulu said the National Treasury gave Thubelisha R50m to increase its capacity when the emergency housing mandate was approved.
Mngombzulu added that, when the N2 Gateway project was started, the City of Cape Town, provincial and national governments were involved.
"You all know what happened when there was a change of government (from ANC to DA)," he said.
"The project was the flagship of the minister and government. Government wanted it to succeed. We thought we would overcome the difficulties."
Pillay said the company struggled with "serious governance flaws" before the CEO resigned in 2006.
Mngombzulu said the N2 Gateway was a lesson for the national Department of Housing and that the National Housing Agency would fare better.
- Cape Times
This was why Thubelisha "got into financial difficulties", said the company's chief operations officer, Mano Pillay, on Tuesday at Parliament's human settlements' portfolio committee.
Pillay said the National Treasury declined to approve the Section 21 company's budgetary requests as its mandate, given by former housing minister Lindiwe Sisulu, was never approved by the cabinet.
Thubelisha declared itself technically insolvent in 2008.
The company will cease operation from July 31.
Pillay said the company had assumed when given the mandate by Sisulu that all the legalities would be met by the national Housing Department.
Desperate to perform, Thubelisha "went into projects no one else would touch with a barge pole".
But Morris Mngombzulu of the national Housing Department said Sisulu had asked the cabinet to approve a mandate for emergency housing and that Thubelisha would be authorised to build them.
"When cabinet approved the emergency housing we assumed it was a blanket approval for all projects. It's a question of interpretation."
He said at an official level, it should have been mentioned that Thubelisha would be responsible for megaprojects such as the N2 Gateway.
Pillay said Thubelisha would be getting funding of R6,3-million for the 2009/10 financial year, but that this would contribute to operational costs.
The company survived on the interest of income from the provinces, about R2m a month.
Arron Steyn, of the Democratic Alliance, asked how the then housing minister could expect Thubelisha to produce 22 000 housing units for the N2 Gateway when the company only managed to build 13 000 houses in the past few years.
Mngombzulu said the National Treasury gave Thubelisha R50m to increase its capacity when the emergency housing mandate was approved.
Mngombzulu added that, when the N2 Gateway project was started, the City of Cape Town, provincial and national governments were involved.
"You all know what happened when there was a change of government (from ANC to DA)," he said.
"The project was the flagship of the minister and government. Government wanted it to succeed. We thought we would overcome the difficulties."
Pillay said the company struggled with "serious governance flaws" before the CEO resigned in 2006.
Mngombzulu said the N2 Gateway was a lesson for the national Department of Housing and that the National Housing Agency would fare better.
- Cape Times
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