1. Presentation to Portfolio Committee on Human Settlements – October to December

2. Presentation Outline 1. Purpose 2. Background
3. 3rd Quarter performance Report
4. Current Interventions
5. Conclusion

3. PURPOSE

4. PURPOSE OF THE PRESENTATION
The presentation serves to;
Appraise the Portfolio Committee on progress relating to implementation of HSDG for Limpopo Province.
Highlight the recovery plan & the New Path Plan the department has embarked on and,
Outline the impact of the plan on performance thus far.
To share Provincial Department state of readiness for 2018/19 FY
To present a progress report on Title Deeds Programme

5. Background

6. Background
The HSDG Budget allocation for 2017/18 financial year was R1, A roll over budget of R86, 968, 000 was approved thus making the total budget to be R1,406, 461, 000.
The National Department has since taken away from the province R150m and the remaining budget is R1, 256, 461, 000
With this allocated budget, the department is expected to deliver 9956 housing units and 5151 serviced sites as per the approved Business Plan.
The rollover budget of R86,968,000 accounts for 939 housing units.
The total target for housing units for the current financial year is 10895

7. Background cnt…
During previous engagement with portfolio committee in September 2017 expenditure was at R Which was 39% and performance delivery sites and 5487 units
As at 31 December 2017 expenditure was R746,065,000 translating to 59%
According Nat Dept figures of January 31st 2018, the Province performance was at 80% in terms of sites and units with an expenditure of 67% . This performance does not include the rolled over target of 939.
Expenditure as at the 8th of March 2018 was R1,087,263, translating to 86.5% of the available budget, therefore the department still has R169,197, to spend.
On the 26th of March 2018 Dept will remit R150m to HDA and the balance of R towards payments to Dept contractors

8. 3rd Quarter Performance Report

9. Key challenges leading to poor performance
The following are challenges that the department was faced with:
Establishing a flawed contractor database with no bias towards built industry prescripts
Late appointment of service providers
Late approval of developmental areas
Contractor to contractor cessions leading to poor performance
None Application of consequence management for none performance of contractors
Poor Contract Management & Planning(Geotechs & Beneficiary Management)
Low staff moral resulting from abrupt staff movement and poor communication
Senior management operating in silos

10. Progress on Recovery Plan
Our presentation on progress made thus far for quarter three will account for targets in the APP and the approved Business plan for HSDG
Facilitating Increase in Expenditure on the HSDG
One On One Meetings with Contractors
The Office of the HOD convened meetings with high performing ,average as well as poor performing contractors to agree with them on fast tracking completions of units and increasing productivity
Assessing Contractor’s Performance
An assessment and categorization of the currently appointed contractors was undertaken and termination on none performing contractors was undertaken and letters for none performance were respectively issued
Contract Management meetings
The HoD chairs the committee and continues to hold regular meetings with the Senior Management every week in order to assess progress and map out intervention measures on ISHS poor performing contractors
Provision of Additional Capacity & Support to Specific Directorates
Additional capacity was sought from HDA in order to assist the Dept with planning and project pipelining this includes a town planner a land legal person, a civil engineer and a town planner

11. Progress on Recovery plan cnt…
HDA’S Contribution to the Recovery Plan
HDA is currently implementing several projects on behalf of the Department. A session was held where it was agreed that HAD should accelerate delivery on those projects
HDA’S Implementation Plan on 5000 units
They were also requested to appoint 5 high capacity contractors for units
5 high capacity contractors have since been appointed. Two of them have assumed site and have already casted 72 foundations
Two other contractors will take site soon. The fifth contractor has since turned down the earlier appointment. had is finalizing the appointment process to replace the contractor.
HDA was requested to table its implementation plan of 5000 units by its contractors in a management meeting held on the 12th of October 2017 and has submitted a detailed implementation plan

12. Performance report for 3rd quarter
October
November
December
Totals
Planned Sites & Units
1347
1999
374
3720
Actual Deliveries
1002
1526
776
3304
Variance
(345)
(473)
402
(416)
Planned Exp
R m
R m
R36 994m
R m
Actual Exp
R82 766m
R95 205m
R97 590m
R m
Difference
(R42 358m)
(R87 512m)
R60 596m
(R69 274m)

13. Performance report for 3rd quarter cnt…
Progress Report on Sites
Total sites planned for delivery in October =450 : Actual sites delivered = 80
Total sites Planned for delivery in November = : Actual sites delivered = 369
Total sites planned for delivery in December = : Actual sites delivered = 321
Grand Total number of sites planned to be delivered during Quarter 3 = 1165 sites
Grand Total number of sites delivered during Quarter 3 = 770 sites
Progress Report on Units
Total no. of units planned for delivery in October =897 : Actual deliveries =922
Total no. of units planned for delivery in November =1284 : Actuals deliveries =1157
Total no. of units planned for delivery in December =374 : Actual deliveries =455
Grand total no. of units planned to be delivered in Q3 = 2555 Units
Grand total no. of units delivered during Q3 = 2534 Units
Total target for sites & units for Q3 = 3720 :Total sites & units delivered for Q3 = 3304
Total target for sites & units not delivered for Q3 = 416

14. Work in progress during 3rd quarter
Work In Progress Quarter 3
Programme
Foundations
Wall Plates
15/16 Rural Housing 5 21
16/17 Rural Housing
278
362
17/18 Rural Housing A
400
500
17/18 Rural Housing B
140 62
17/18 Rural Housing C 1
15/16 Disaster Housing 6 3
16/17 Disaster Housing 2 10
16/17 Rectifications 42 44
15/16 Military Veterans 19 11
Total
893
1013
NO. OF CONTRACTORS APPOINTED
NO. OF UNITS APPOINTED FOR 18
2002 72
6000

15. Progress for 3rd quarter - APP
Sub- Programme
Indicator
Target
Actual
Reason for Variance
2.1 Housing needs, research & Planning
1. A multi year development plan/APP developed by October
Reviewed multi year development plan/APP developed by October
Delay in appointment of service to date inception report has been presented and the service provider is collecting data throughout the municipalities in order to finalise review of the MYHDP. 1st draft reviewed on the 6th December Final submission will done during Quarter 4
3. Number of hectares of land acquired
40ha
Delay in appointing land task team. Land task team appointed in November Process to acquire land should be finalized during 4th quarter.
5. Number of municipalities accredited on human settlement provision
Conduct capacity assessment for 5 municipalities
Conducted capacity assessments in 3 municipalities
Fetakgomo-Tubatse local municipality could not be recommended for level one accreditation due majority of councils strategic documents not in place as the municipality is still in the amalgamation processes. Greater Tzaneen Municipality is in the process of preparing Business Plan for assessment by HDA
6. Number of beneficiaries exposed to consumer education
1020
900
Low turnout of beneficiaries due to non- cooperation by some of the municipalities to mobilise existing and potential consumers

16. Progress for 3rd quarter – APP cnt…
Sub- Programme
Indicator
Target
Actual
Reason for Variance
2.1 Housing needs, research & Planning
5. Number of municipalities accredited on human settlement provision
Conduct capacity assessment for 5 municipalities
Conducted capacity assessments in 3 municipalities
Fetakgomo-Tubatse local municipality could not be recommended for level one accreditation due majority of councils strategic documents not in place as the municipality is still in the amalgamation processes. Greater Tzaneen Municipality is in the process of preparing Business Plan for assessment by HDA
6. Number of beneficiaries exposed to consumer education
1020
900
Low turnout of beneficiaries due to non-cooperation by some of the municipalities to mobilise existing and potential consumers

17. Progress for 3rd quarter – APP cnt…
Sub- Programme
Indicator
Target
Actual
Reason for Variance
2.2 Housing Development, Implementation & Planning
Number of households connected to basic services as part of the informal Settlements Upgrading Programme
1990
878
Under performance by some of the Service Providers
No. of Housing stock/RDP rectified
123 67
Under performance by some of the contractors
No. of rental units built (CRU) and (SH)
100
The amendment of the JBCC contract is currently underway. A letter will being issued to the contractor and a deed of amendment has been prepared
No. of new sites connected to basic water and sanitation services as part of the IRDP
300
Delay in commencement due to change of development areas, some municipalities did not submit the development areas on time such as Thabazimbi
No. of EPHP units completed 20

18. Progress for 3rd quarter –APP cnt…
Sub- Programme
Indicator
Target
Actual
Reason for Variance
2.3 Housing Asset management & Property Management
No. of units Registered and Endorsed
2268
423
Some of the approved beneficiaries untraceable
Number of units transferred through the Enhanced Extended Discount Benefit Scheme 60
Municipalities are reluctant to sign the clearance certificates on properties. However cooperation has been received from Mogalakwena & Lepelle- Nkumpi municipalities
Number of rental units devolved to municipalities in terms of section 15 of the Housing Act,97 1
Delay in the process of devolvement of rental units due to public works not releasing properties. Five rentals units have been identified – awaiting approval.
Number of job opportunities created
2400
546
Under performance by some of the contractors
No. of financial-linked individual subsidy programme (FLISP) units completed
140
Applicants failing National Credit Act requirements to access financing from mortgage providers

19. Interventions during 3rd quarter
Meetings arranged with affected municipalities and a follow up to get the clearance certificate signed
Ward councillors and committees are assisting in tracing approved beneficiaries, and announcement’s to be presented in three languages on the radio.
Meetings are arranged with affected municipalities to confirm the status of signing of transfer documents to be submitted to state attorney
Ongoing engagements with contractors especially poor performers

20. Progress on Military Veterans programme for 3rd quarter
Backlog is 411
The Annual target for 2017/18 is 200 units. : Delivery is 3 units.
Challenges
There has been gross under performance on the programme in the financial year that has seen only 3 units delivered in the financial year. This has been largely attributed to economic viability of constructing 75m2 which was demanded by the beneficiaries instead of the 50m2 national norm. The province acceded to the demands of the Military Veterans at that time.
Interventions
A MINMEC decision was taken for provinces to revert back to 50m2 as prescribed by national policy. A Ministerial directive was issued to all provinces to upscale delivery and comply with policy on 50m2 house.
The Executing Authority has since rescinded the decision of 75m2. HDA was informed of this decision as the implementing agent.

21. Progress on Mining Towns programme for 3rd quarter
4 Areas identified namely:
Elias Motsoaledi,
Fetakgomo-Tubatse 476
Thabazimbi, and,
Lephalale.
Challenges
Elias Motsoaledi and Fetakgomo- Tubatse do not have projects on serviced sited due to process of upgrading informal settlements still underway. The delay is as a result of authorisations from different departments e.g, LEDET with environmental Record of decision (ROD).
Thabazimbi returned allocation of units as a result of not having development areas.
Interventions
Service providers are appointed to formalise informal settlements and do township proclamation. 2 service providers are appointed for formalisation and contracts are in force up to end of financial year.
Sites are serviced in Thabazimbi in order to construct top structure.

22. Current Interventions

23. Phase 2 of Strategic Intervention Plan
While implementing the recovery plan a further assessment on factors militating against the Provincial Department was done this was followed by a two day strategic plan session on the 23rd and 24th January 2018, which focused on finding solutions and this resulted in adoption of the following strategic goals:
A new multi-layered database of contractors to be established incorporating CIDB Grading & NHBRC Registration to this effect terms of reference have been developed and BAC has assessed the ToR. Advertisement to be done before end of the current financial year.
The Department has started terminating non performing contractors as fourteen non performing contractors were terminated.
Twelve contractors have since been appointed to deliver 782 units left terminated contractors.
Due to continuous assessment of contractor performance, the second batch of terminations is currently underway
The department is in the process of introduction performance reduction matrix and delivery schedule as a standard addendum to the current Department contract
continuous contract reviews as part of tightening contract management

24. Phase 2 of Strategic Intervention Plan cnt…
As part of strengthening the Department’s efficiency staff reconfiguration process would be undertaken and this will result in some officials being moved from the current districts to new districts and municipalities.
Appointment of service providers to be linked with the financial year as oppose to shorter terms
Re-constitution of supply chain committees will be finalized by 15th March as part of the department’s renewal .
The department will make sure that with effect from 2018/19 financial year, development areas are approved for a period of five years and council resolutions are also taken.

25. Phase 2 Strategic Intervention Plan cnt…
Rollout of the Electronic Management System (EPMS) for effective and efficient project management would be done by the 31st March 2018.
From the 1st February 2018 contractor to contractor cessions are no longer accepted unless they are material supply related and are approved by the Department.
The department is now allowing only 50% of geotechnical to be paid at foundation phase and the balance would be paid on completion of a housing structure.
A project planning cycle to commence in April and be completed in August every year. This will ensure that there is enough time to develop a credible business plan e.g. start planning now for 19/20 financial year.

26. Progress on phase 2 Intervention Plan
Resolution
Champion
Due Date
Review Progress in June 3 4 1 2
Progress 
Establishment of new multilayered contractor database
ISHS:DDG, CFO
31-Mar-18
Now at BAC stage
Performance evaluation of all contractors and implementation of the resolution outcomes
ISHS:DDG, D:R&C
31-Jan-18
 Commenced in Feb 18
Introduction of a target reduction plan and delivery schedule as a standard addendum to the current contracts
 This would be done by end of March 2018
Conduct quarterly contract reviews
Ongoing
 Currently underway
Contractor appointments to be aligned to the financial year
ISHS:DDG, CFO, HOD
A process for alignment currently underway 
Implementation of electronic project management system
ISHS:DDG
This would be implemented by 1/04/2018
Abolish contractor to contractor cessions
31 March 18
 Profiling of contractors with cessions underway

27. Progress on phase 2 intervention Plan cnt…
50% of geotechnical allowance would be paid at foundation phase and the balance would be paid on completion
ISHS:DDG, CFO
1-Apr-18
A submission is being to the contractor once approved contract amendment would be done
Conduct investigations on reports of corruption and unethical behavior by some officials
HOD
30 March-18
 HOD to engage DPSA to assist with an official to test allegations
Reconfiguration of ISHS and deployment process
1-Mar-18
 A submission has prepared for the HOD
Approval of developmental areas for 5 years
ISHS:DDG
1st May 18 
A consultation process to ensure before the end of March 2018
TORs and advertising for appointment of service providers
1-Feb-18
 Underway

28. Progress on phase 2 Intervention Plan cnt…
Finalization of 2018/19 draft business plan
ISHS:DDG
4-Feb-18
 Completed & supporting documents submitted
HSP&MS Chief director to ensure synergy in all planning activities including those handled by HAD
HSP&MS:CD
31-Mar-18
 Process underway
Meeting of key stakeholders
HOD
15-Mar-18
 HOD continues to engage
Analysis of Marapong CRU and Bendor x100 contracts
1-March 18
HOD is meeting with the External legal expert on the 14th March to discuss preliminaries on the two matters
TORs and advertising for appointment of service providers for provision of engineering services
1-Feb-18
 Completed
Tender closed during 1st week of March 2018

29. Impact on Interventions from 3rd quarter –non financial
Terminations resulted in the remaining contractors improving their performance as indicated by the figures below;
The third quarter performance improved from 67% to 89% resulting in the cumulative performance to be 81% as at the end of the third quarter that dropped slightly to 80% as at the end of January 2018.
Whilst the fourth quarter performance is currently at 55% and cumulatively 75% there is work in progress to the tune of 1880 foundations, 1440 wallplates and 1029 sites that are projected to be realized by the end of the financial year.
Target
Delivery %
Cumulative target
Cumulative Target Q1
2785
2662
96% Q2
4708
3168
67%
7493
5830
78% Q3
3720
3304
89%
11213
9134
81%
Q4*
3894
2161
55%
15107
11295
75%
Total
* as at 6 March

30. Impact on Intervention from 3rd quarter – financials
Budget R’000
Expenditure R’000 %
Cumulative Budget R’000
Cumulative Expenditure R’000 Q1
312,764.00
182,036.00
58% Q2
378,997.00
288,468.00
76%
691,761.00
470,504.00
68% Q3
344,835.00
275,561.00
80%
1,036,596.00
746,065.00
72%
Q4*
219,865.00
341,199.00
155%
1,256,461.00
1,087,264.00
87%
Total
* as at 8 March
In line with the physical delivery in the 3rd quarter, the financial delivery also followed suite with an increase from 76% to 80% resulting in the cumulative increase to 72%.
As at the 8th of March the expenditure was at 87% and with the above work in progress, the province is projected to spend the remaining budget.

31. Contractor profiling
Group
No. of Contractors
Contract Star
Contract End incl. ext.
No. of Months Impl.
Initial Allocation
Delivery 16/17 FY
Delivery 17/18 FY
Balance
Cum. Delivery
Rate/Cont./Month
Reduc.
Term.
Extn.
16/17 FY Rural 78
Aug-16
Feb-18 19
7812
2233
4379
1200
6612 4
R=26
T=14
17/18 FY Rural A 15
May-17
May-18 10
4037
2560
1477 17
R=4
E=15
17/18 FY Rural B 13
Oct-17 5
2002
157
1845 2
E=13
17/18 FY Rural C 72
Nov-17
6000 47
5953
E=72
Total
19851
7143
10475
9376
NB: Please note the extensions for the above contractors are of varying nature; some entailed reduction of units and some others have suspensive conditions of termination in the event of non performance

32. Contractor profiling - WIP
WIP
Item
Programme F W
U/T
Sites 1
2016/17 Rural
292
281
633 2
2017/18 (15) Rural
329
507
603 3
2016/17 Blocked 35 30 74 4
2015/16/17 Disaster 5
2017/18 (72) Rural
859
287
4795 6
2017/18 (13) Rural
365
335
1125 7
2015/16 Rural 8
2016/17 EPHP 9
Military Veterans 10
HDA Rural 72
4928 11
CRU
250 12
2016/17/18 Services
1082 19
TOTAL
1880
1512
12408

33. Implications on 2018/19 Performance
The implications of the previous slide is that the Department would begin 2018/19 with continuous delivery of units as the majority of contractors are already at construction stage
If we continue with the tight controls on contractors, we expect full HSDG expenditure in 2018/19 would be realised.
Appointment for the incomplete milestones of the 2016/17 FY has been completed.
The Department continue to apply consequential management as well as contract management
The Department has entered into a performance based contract with HDA on implementation of 5000 units and current more than 4500 beneficiaries have been approval on the HSS.
This further serves as assurance that the Province will be able to meet its annual targets for 2018/19 We

34. Conclusion

35. The Portfolio committee should note:
Conclusion
The Portfolio committee should note:
challenges the department was faced with and the interventions
progress made since the last engagement with the Department
control measures put in place towards ensuring delivery of 5000 units by the HDA and other contractors
2nd phase intervention plan and progress thus far and that
review of this plan would be done in June 2018

36. THANK YOU