The national Department of Housing has come under fire on the N2 Gateway programme for failing to ensure that social housing legislation was implemented ahead of beginning the massive housing project, according to auditor-general Terence Nombembe's report.
Nombembe revealed a four-year trail of mismanagement, irregular procedures and waste in the state housing project in Cape Town, which Parliament's standing committee on public accounts suggested could have involved fruitless expenditure to the tune of
R2 billion.
While Nombembe was careful to point out that his investigation "does not express an opinion on the legal effect of the facts or the guilt or innocence of any person or party", he said he had provided an objective evaluation complying with the request for an investigation he had received from the department.
The watchdog parliamentary committee asked the city what action it would take to recover the money.
The city's chief financial officer, Mike Richardson, said yesterday that this figure was probably in the region of a much lower R90 million, but in any case the city had had no contractual arrangement with Thubelisha Homes, which was the project manager from early 2006. It is being replaced by the state Housing Development Agency.
Nombembe reported that Thubelisha, a section 21 company, had been appointed by the province without a proper procurement process and therefore "it cannot be concluded whether a proper assessment of their capacity to manage a project of this size and complexity had been performed".
He reported that, although a contract was entered into between the Western Cape provincial government and Thubelisha, it was cancelled by the province in September 2006 due to a breach of contract. However, a meeting in September 2006 of the national housing minister - Lindiwe Sisulu at the time - and provincial ministers agreed that the project was still the responsibility of Thubelisha.
Nombembe said it operated thereafter without a contract "or specific terms of reference". In addition, the Department of Housing should have ensured the Social Housing Act was promulgated before the Gateway project began, he said.
The director-general of human settlements, Itumeleng Kotsoane, Western Cape human settlements and local government department head Dave Daniels and Cape Town city manager Achmat Ebrahim reported that there was no evidence of formal resolutions why the city of Cape Town - by early 2006 in opposition party control - had been removed as implementing agent.
Nombembe also reported that funding to complete the project was not secured before it began, as required by law. In July 2007, only R2.5bn of the projected cost of R4.2bn had been budgeted for.
He said R3.4bn was needed to finish the project this year. It has provided 16 737 units, whereas 22 000 units were meant to have been built in six months during 2005. Nombembe said there was a shortfall of R1.7bn, the bulk of which was meant to be paid for by the national Housing Department.
- Business Report
Nombembe revealed a four-year trail of mismanagement, irregular procedures and waste in the state housing project in Cape Town, which Parliament's standing committee on public accounts suggested could have involved fruitless expenditure to the tune of
R2 billion.
While Nombembe was careful to point out that his investigation "does not express an opinion on the legal effect of the facts or the guilt or innocence of any person or party", he said he had provided an objective evaluation complying with the request for an investigation he had received from the department.
The watchdog parliamentary committee asked the city what action it would take to recover the money.
The city's chief financial officer, Mike Richardson, said yesterday that this figure was probably in the region of a much lower R90 million, but in any case the city had had no contractual arrangement with Thubelisha Homes, which was the project manager from early 2006. It is being replaced by the state Housing Development Agency.
Nombembe reported that Thubelisha, a section 21 company, had been appointed by the province without a proper procurement process and therefore "it cannot be concluded whether a proper assessment of their capacity to manage a project of this size and complexity had been performed".
He reported that, although a contract was entered into between the Western Cape provincial government and Thubelisha, it was cancelled by the province in September 2006 due to a breach of contract. However, a meeting in September 2006 of the national housing minister - Lindiwe Sisulu at the time - and provincial ministers agreed that the project was still the responsibility of Thubelisha.
Nombembe said it operated thereafter without a contract "or specific terms of reference". In addition, the Department of Housing should have ensured the Social Housing Act was promulgated before the Gateway project began, he said.
The director-general of human settlements, Itumeleng Kotsoane, Western Cape human settlements and local government department head Dave Daniels and Cape Town city manager Achmat Ebrahim reported that there was no evidence of formal resolutions why the city of Cape Town - by early 2006 in opposition party control - had been removed as implementing agent.
Nombembe also reported that funding to complete the project was not secured before it began, as required by law. In July 2007, only R2.5bn of the projected cost of R4.2bn had been budgeted for.
He said R3.4bn was needed to finish the project this year. It has provided 16 737 units, whereas 22 000 units were meant to have been built in six months during 2005. Nombembe said there was a shortfall of R1.7bn, the bulk of which was meant to be paid for by the national Housing Department.
- Business Report
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