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Clarity on the supposed underspending on housing development

The underspending can be attributed to the Increase in the housing subsidy quantum. Even though this increase was widely welcomed, it was only approved at the end of March 2023 and a breakdown of the increased quantum was only provided in August 2023. This caused a delay of 5 months as we had to recalculate and accommodate the new subsidy quantum in all the projects. As a result, the approval and implementation of several new projects was delayed. Construction projects have significant lead times from approval to implementation and completion and so it is essential that funding accommodates these lead times.

Over and above the time delays , various other factors have led to the Department of Infrastructure (DOI) Human Settlements Branch underspending.

Challenges experienced in contract implementation include but are not limited to:

  • The continued threat of the construction mafia and extortion through acts of violent threats, shootings and intimidation on several project sites lead to stoppages. One such example is the Gugulethu infill project which has been closed since March 2022 as a result, we have been unable to spend R244 million.
  • Illegal land invasions on land earmarked for housing development has had a detrimental impact on our spending. One such example is the Welmoed/ Penhill project where over 60 illegal farmers are delaying the delivery of over 8000 housing opportunities. Phase 1A of the project budgeted for R 729 million.
  • Violent community protest by non-qualifying beneficiaries such as can be seen in the NUSP project in Mossel Bay.

It is worth noting that despite these shortcomings, the Department has innovatively delivered on its mandate. Between April and December 2023, more than 1 765 housing opportunities have been delivered for the most deserving and vulnerable beneficiaries. In addition to the housing opportunities, we have installed more than 295 solar geysers as part of an initiative to mitigate the energy crisis to assist indigent households and beneficiaries with disabilities. Furthermore, a total of 2 614 title deeds have been provided to our beneficiaries to promote security of tenure and leaving a lasting legacy.

While this underspending will have an impact on several projects, the Western Cape Government remains committed to creating an enabling environment that benefits its citizens.

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