City of Joburg and Gauteng hurl bricks at each other over housing cuts
The Gauteng provincial government disputes any malice over the cut
Human settlement minister Nomaindia Mfeketo has intervened in the impasse between the City of Johannesburg and the Gauteng human settlement department over a R180m housing budget cut.
For the past two months, Johannesburg mayor Herman Mashaba and the Gauteng department of human settlement have been at loggerheads over a significant R180m budget cut.
Mashaba has written numerous letters to the national treasury, the Gauteng premier, national department of human settlements and provincial treasury seeking intervention in the impasse.
According to a letter seen by Times Select, the city was allocated a R248m budget by the national treasury at the start of the financial year.
However, that was cut to R68m by the provincial government in November. In the letters, Mashaba claimed the R180m shortfall would affect the delivery of houses in the metro and affect job creation.
The letters stated the budget cut would lead to the metro being unable to meet its financial obligations to contractors and suppliers of building material and might ultimately delay service delivery.
“During the financial year 2017/18 the City submitted a business plan to the Gauteng Department of Human Settlements [GDHS], setting out the funds required for various housing development projects. In terms of the business plan, the city required National Treasury to allocate a human settlement development grant [HSDG] of R249m. This amount was approved by Treasury and on 20 April 2018, the allocation of R249m was published in the provincial gazette,” Mashaba said in his letter.
He said based on the allocation his city made various contractual commitments for the completion and furtherance of various housing development projects.
“On 26 November 2018, provincial treasury reduced the initial HSDG allocation of R249 by approximately 72% to R68.9 million. The aforementioned decision was taken without warning or any attempt to meaningfully engage with the city,” Mashaba claimed.
Mfeketo’s spokesperson, Xolani Xundu, said the national department was informed of the dispute and that they were currently “mediating between the two spheres of government to find a lasting solution to the matter”.
Xundu said his department and the city met in December and January.
“We requested the city and the province to meet and agree on funding amounts to be allocated to the city based on their readiness to expend such money,” Xundu said.
In a letter dated December 13, to President Cyril Ramaphosa, Mashaba said: “The reduction in HSDG funding will have disastrous effects on housing projects underway, which will ultimately affect the poorest of the poor who require housing assistance from the city.”
“In the spirit of co-operative governance and in order to avoid a costly litigation between the City of Johannesburg and provincial government,” Mashaba wrote.
Gauteng human settlements spokesperson Keith Khoza said: “The mayor of Johannesburg is yet to convince the citizens of the city that he is not a charlatan for continuing to make such claims, even after he has been proven to be wrong, which is evident that he lacks the skills and expertise to run such a big city.”
Khoza said on August 2 2018, at the Gauteng department of human settlements budget lekgotla, the city had failed to account for more than R382.8m that was transferred to the city.
“Furthermore, the city failed to account for the 2015 housing units that were meant to be delivered. These units were to be delivered in Fleurhof, South Hills and some in Riverside View and Lufhureng.
“Contractors are on site in Riverside and the project is on schedule and there is nothing that is stalling. Mayor Mashaba has signed a tripartite agreement on this project yet he doesn’t want to sign on others, his responsibility is to install electric infrastructure, whilst the GDHS is to build houses,” Khoza claimed.
He said despite all those challenges, the GDHS continued to engage the city on their failure to deliver housing to Joburg residents.
“As a result of the failure by the city to pay contractors, the GDHS decided to take over some of the projects in Riverside View and Fleurhof, so as to ensure that service delivery is accelerated and that our people’s needs are taken care of.”
He said his department reserved its right to not use the city as an implementing agent because of nondelivery.
“There are outstanding bills on bulk infrastructure of R400m to Calgro by the city which are yet to be paid by Mayor Mashaba’s administration. As a result some projects cannot be completed,” Khoza said.