ADRIAAN BASSON, ILHAM RAWOOT AND GLYNNIS UNDERHIL – Oct 02 2009 07:03 – M&G

It was supposed to be a flagship housing project. Eleven years later, Thubelisha Homes is the albatross around the neck of Human Settlements Minister Tokyo Sexwale, who inherited the flop from his predecessor, Lindiwe Sisulu, now defence minister.

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A fortnight ago the Mail & Guardian revealed that housing director general Itumeleng Kotsoane had guaranteed R241,5-million in March to shut down the technically insolvent government housing agent. Although it managed a number of projects countrywide, Thubelisha will infamously be remembered for the disastrous N2 Gateway housing project in Cape Town.

This week the M&G can reveal that:

* While employed by ­government to wind down Thube­lisha, the agency’s acting chief executive, John Duarte, is proposing that his private company take over state projects in which Thubelisha had invested funds;
* In the months before shutting down operations, Duarte and his personal assistant, Emelia McNamara, spent tens of thousands of Thubelisha’s rands on domestic business class flights; and
* Duarte refused the offer of free office space in Johannesburg and rented expensive offices with the shut-down budget.

This week also saw the release of the department’s annual report for 2008-2009, in which the auditor general criticises it for lending R100-million to Thubelisha without complying with the requirements of the Public Finance Management Act.

The department rallied behind Duarte after the M&G established that his company — PTYtrade 407 — had proposed to the Mossel Bay municipality that it continue with projects Thubelisha was contracted to do.

Duarte — husband of Jessie Duarte, the chief operating officer in President Jacob Zuma’s office — denies wrongdoing and says Sisulu’s closure plan for Thubelisha allowed for a private company to be formed by the agency’s staff.

On Duarte’s version his own private benefit when Thubelisha projects are taken over by his company would be allowed. But even if so, a conflict of interest remains in that he would be torn between closing down projects in a way that is beneficial to government as shareholder or to himself as heir to those projects.

The situation would not be unlike a liquidator buying some of the assets that he is supposed to dispose of at maximum value to creditors. Thubelisha officially closed down operations at the end of July but is still winding down the agency’s interests and administration with the assistance of private consultants Learning Strategies. This process could take months to finalise.

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Some of its projects have been taken over by the Housing Development Agency (HDA), established in March by Sisulu to replace Thube­lisha in carrying out government’s objectives of providing low-cost housing to the poor. The HDA is headed by former Johannesburg Housing Company chief executive Taffy Adler.

According to human settlements spokesperson Clarence Tshitereke, the R240-million required to close Thubelisha is an “estimated figure as of December 31 2008. However, this amount has reduced substantially due to transactions that have taken place. This amount would be less by at least R100-million.”

The funding would cover severance packages for Thubelisha’s staffers, leases, cancelled contracts, operating costs and tax claims.

It remains unexplained why Duarte chose to rent expensive offices in Parktown, Johannesburg, from August when Thubelisha had the option of staying on for free at its Killarney office, now occupied
by the HDA. This was confirmed to the M&G by two independent sources.

Duarte was appointed acting chief executive two years ago, after the disintegration of the agency’s board and the refusal of the national ­treasury to approve the agency’s budget. At that stage Duarte was already the sole director of PTYtrade 407 — a dormant company now used to pursue the Mossel Bay deal.

The M&G is in possession of two documents that illustrate Duarte’s attempts to partner with fellow Thubelisha staff in a private venture — while they are being paid by ­government to finish off Thube­lisha’s work.

The first is an email sent by McNamara — Duarte’s PA — to Colin Puren, director of community services at the Mossel Bay municipality, on July 30. This was a day before Thubelisha ceased to exist operationally. McNamara sent the email on behalf of Allistair Cullum, Thubelisha’s manager of projects in Mossel Bay.

Thubelisha was appointed as project manager by the munici­pality in 2007 to oversee the construction of 327 low-cost houses in Mandela Park. In April 2008, the Herald reported that little progress had been made with the project and that built houses were already beginning to crack.

In the email to Puren, Cullum wrote: “Thubelisha was employed by the Mosselbay [sic] Municipality to assist them with all the ­housing projects in Mosselbay. The first project that they gave us was for 327 houses and then you extended it to
1 500 houses. Then they employed us to do the block projects in Joe Slovo, Highway Park, Civic Park and Tarka [all Mossel Bay suburbs].

“We as Thubelisha put in allot [sic] of work and submitted all documentation to the Housing Department in the Western Cape. We spent R100 000 to get the geotech reports done as was requested from the Housing Department.

“A further R160 000 was paid to get the boundary pegs done on the erven and 4 houses was built that we never got paid for from the Municipality nor the Housing Department (value of R260 000).”

Cullum then pitches to Puren that Duarte’s company take over the projects. “Thubelisha’s operations will be coming to a close on the 31st of July 2009. Pty Trade 407 gave a proposal to the Municipality which is the same people that works for Thubelisha to complete all projects in Mosselbay. We are looking forward for your speedy response.”

Duarte admits submitting a ­proposal to the Mossel Bay municipality, but says this was done at their request “after they [the municipality] were informed by the [Housing Development Agency] that they [the HDA] would not be taking over the provincial projects … At no time was the intention to take over uncompleted contracts of Thubelisha. Insofar as the Mossel Bay municipality is concerned the projects discussed were not part of Thubelisha’s projects,” Duarte says.

This, however, contradicts ­Cullum’s clear proposal to Puren: that PTYtrade 407 be appointed to finish the work Thubelisha was appointed for. Duarte also ignores the fact that Thubelisha had already spent R260 000 of government’s money on a project his private company now wants to inherit.

The second document is an email sent by Duarte himself to seven Thubelisha staffers, including Cullum, and one Mandla Gama on August 26. It reads: “I want to set up a domain for our e-mails something line (sic) what we had in our Thubelisha e-mails or one we can use as brand, Regards Johno.”

According to well-placed sources this refers to PTYtrade 407.

Duarte responded: “I sent it to these individuals as I thought they may be interested. The idea was subsequently abandoned as no one responded.”

The M&G is also in possession of Thubelisha’s travel records for May to July, which show that Duarte and McNamara spent R118 824 in this period, mostly on business-class flights. Duarte states that as part of the closure process, “travel would have to be undertaken to the various areas to ensure that the management and finalisation of projects are taken care of and that assets/income of the company is protected”.

Asked to give reasons for each trip, Duarte referred only to Thubelisha projects in Cape Town, Port Elizabeth and East London.

He failed to explain three flights to George during this period, which is the closest airport to Mossel Bay. On two occasions, Thubelisha also paid for non-staffers, Gama and P Cwazibe, to travel to George.

Tshitereke said the department was aware of Duarte’s visits to Thubelisha projects.

Yet another agency
The Housing Development Agency (HDA) was launched in March, four months before the closure of Thubelisha Homes, writes Ilham Rawoot.

But questions have arisen as to whether another housing agency is the answer to solving the housing crisis.

At the HDA launch, director general of housing Itumeleng Kotsoane said the agency would “fast-track housing delivery” and “coordinate the availability of land, support municipalities and provinces in project development and implementation”.

The HDA “has good people, but they are understaffed with an enormous mandate”, says Marie Huchzermeyer, professor of architecture and planning at Wits University. She says “building capacity at local government level” should be the priority, not establishing “yet another agency”.

A number of things need to be done differently this time around, says Dan Smit, adviser to Lindiwe Sisulu when she was housing minister. “The unusual density structure of our cities is really problematic and makes the provision of public transport quite difficult. The people who bear the brunt are the poor.”

Pivotal to eradicating the housing problem are the restructuring of our cities and redesigning financial instruments to make that happen, he says.

Huchzermeyer says the upgrading of informal settlements is also fundamental to success.

“The government spends so much money on security ensuring that people don’t build new shacks. So they move to backyard shacks, which just makes the problem more hidden.”

Tension is mounting in Langa near Cape Town as informal settlers from Joe Slovo slowly fill up every available piece of open land in the more established areas.
Joe Slovo residents, many of whom were moved to make way for the Gateway project and who do not want to move to residential units in Delft, have settled in other parts of Langa in their hundreds and erected shacks.

More move in almost every day and some Langa residents have now called for the authorities and community leaders to intervene.

One resident, who did not want to be named, said tensions had been mounting between residents and the newcomers and police have had to be called on occasion.

“We understand their plight but we cannot condone their acts because they live under hazardous conditions that are dangerous and unhealthy. These conditions affect all of us because they have no electricity, water or sanitation and they dump everything in the drains.”

She said there were new shacks going up “on a daily basis” and “it was getting out of hand”. She called for leaders to intervene because things were turning “nasty”.

Last week the Constitutional Court handed down a judgment that the Joe Slovo residents be given proper alternative accommodation. It also ruled that 70 percent of the current and former residents be accommodated at any future low-cost housing project at the N2 Gateway.

Residents still living in the informal settlement can be moved to temporary residential units in Delft but many people do not want to move.

Thubelisha Homes, connected to the Gateway projects, and the Joe Slovo residents have been given until June 30 to agree on the start of any new relocation process.

Community task team chairman Sfiso Zulu said they had raised many concerns about the move to Delft. In the past people who had agreed to move were given forms to sign which were never properly explained to them.

“They were told to take their assets and they were loaded into trucks and their shacks were dismantled without them really knowing what was going on.”

Zulu accused the ANC government of implementing “apartheid laws” under which people were moved to distant areas where there were no job opportunities or access to transport.

They did not want to disrupt the government’s efforts to relocate people to temporary residential areas, but Delft “was out of the question”.

He said Langa was central and people could get part-time jobs in the surrounding areas.

“The authorities do not have our interests at heart and are making decisions about where we should be accommodated.”

Joe Slovo resident Siyazi Siziba said people who had voluntarily moved to Delft had come back because “there was no life” there. She said they wanted to remain in Langa and many had started moving to backyards before the relocation deadline.

Promises that certain sections of Langa would be developed had been made by the authorities but nothing had come to fruition.

Shack dweller Vusumzi Vokwana said local houses were “too small” to accommodate big families and the only option was to build shacks where land was available. Shack dwellers only paid for the electricity from more established homes and did not pay rent.

But ward councillor Mayenzeke Sopaqa said Joe Slovo residents needed to obey the government’s rules because the move to Delft would ultimately benefit them. He condemned people who were moving out of the informal settlement and erecting their shacks in open spaces in Langa.

“Their behaviour cannot be tolerated. There are by-laws which prohibit people from building in certain areas. The government wants to eradicate poverty and provide people with decent houses.

“They have to move out of Joe Slovo so that construction can start happening and there is no land available in Langa to accommodate them.”

Sopaqa said those who were building shacks in Langa should return to where they came from. “We don’t want a situation where forced removals and political and police intervention will be required.”

* This article was originally published on page 7 of The Cape Argus on June 21, 2009

AEC Press Alert on behalf of Joe Slovo Liberative Residents

The Constitutional Court judgement on Joe Slovo forced removal is to be handed down 10am Wednesday 10 June after almost a year of deliberation.  The entire community of 20,000 residents will be awaiting judgement in nervous anticipation.  There will be a gathering of residents and various activities inside Joe Slovo.  The AEC will be there in solidarity.

For more information, contact Mzwanele Zulu at 076 385 2369.  For comment, call Mr. Zulu after 10am See also the following media summary:

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IN THE CONSTITUTIONAL COURT OF SOUTH AFRICA

Various Occupants v Thubelisha Homes and Others

CCT 22/08

Hearing Date:  21 August 2008

The following explanatory note is provided to assist the media in reporting this case and is not binding on the Constitutional Court or any member of the Court.

On 21 August 2008 the Constitutional Court will hear an application about the eviction of around twenty thousand people from an informal settlement near Cape Town, known as the Joe Slovo settlement.  The case for eviction was brought in the Cape High Court by government agencies responsible for housing on the basis that the eviction was required for the purpose of developing affordable housing for poor people.  The High Court granted the ejectment order.

The residents, applicants before the Constitutional Court, say first that they were in lawful occupation and that the decision to evict them was not made fairly and properly.  They argue that if they were in unlawful occupation, the eviction order should not have been granted because the law that prevented illegal eviction of certain unlawful occupants had not been complied with.  In particular, they contend that it was not just and equitable to evict them and to have them relocated 15 kms away.  Finally, they urge that they had a legitimate expectation that 70% of the houses in the new development should be allocated to some of the former residents of Joe Slovo.

The government agencies assert that the residents occupied Joe Slovo unlawfully, that their eviction is just and equitable and that there was no legitimate expectation of the kind asserted.

The Community Law Centre of the University of the Western Cape and the Centre on Housing Rights for Evictions have been admitted as friends of the Court.  They support the residents arguing that the socio-economic rights have an element additional to physical housing, so that the rights fulfil their purpose. These rights require poor people to be properly consulted before their evictions.

A damning audit report of the N2 Gateway housing project reveals costly and widespread deficiencies in the planning, accounting, design and execution of the government’s flagship low-cost housing development.

The report, completed in June 2008 but tabled in parliament only last week, backs up complaints that have surrounded the project since its inception.

The national Department of Housing, which has responsibility for the project, commissioned the Auditor General’s report, which confirmed the N2 Gateway Project had not been managed “economically, efficiently and effectively”.

The Auditor General ordered corrective action, which will include training, as well as the recovery of possible fruitless and wasteful expenditure, and possible disciplinary action.

The N2 Gateway project was launched in the Western Cape in March 2005 as a pilot to test the government’s new low-cost housing policy called Breaking New Ground.

The policy sought to roll out integrated human settlements, rather than build row upon row of RDP houses in new communities that had no infrastructure or recreational facilities.

N2 Gateway houses would be bigger than RDP houses, and would be available as fully subsidised free homes, affordably bonded units and rental houses.

But in the past years positive reports of home handovers have been overshadowed by the negative press the development has attracted.

The problems have included housing lists, land invasions, politicking, illegal occupations, evictions, skills shortages and allegations of tender irregularities and shoddy workmanship on half-completed homes.

In June 2006, the Cape Argus reported on the “costly bungling” revealed at a mayco meeting.

Although the scope of the Auditor General’s report did not extend to all the issues highlighted, it identified 10 areas of concern.

These included the fact that the necessary legislation and policies were not in place when construction started, and the roles and functions allocated to the different spheres of government had not been adhered to. This had resulted in uncertainties over who should take responsibility for specific functions.

In addition, the Auditor General found that construction started before funding had been secured or the business plan finalised

Sufficient land had also not yet been identified and secured, geotechnical surveys which would have revealed the seriousness of the soil problems had not been done, and the selection of beneficiaries had not been finalised.

Qualifying criteria in respect of monthly household income had also not been consistent with policy, and had been inconsistently communicated to different communities.

Because of the consequences of time-frame and affordability miscalculations, legal claims for abortive work and standing time, totalling R43 million, were lodged against the City of Cape Town.

Further fruitless and wasteful expenditure of R20m was incurred due to design changes which resulted from the failure to exercise “reasonable care” during the planning phase.

And because of irregularities in the appointment of initial project manager Cyberia, which “lacked (the) sufficient in-house and specialist expertise” to perform the job it had tendered for, payments of R12m made to Cyberia were found to have been irregular.

Some R72m in irregular expenditure was also incurred as a result of tender processes not being followed in the appointment of implementing consortia.

The appointment of Thubelisha Homes as project manager in 2006, after the new multi-party coalition-led City of Cape Town administration was removed from the project, was also done without proper procurement processes being followed.

Since the completion of the Auditor General’s report, the government’s Housing Development Agency has taken over from Thubelisha, which has since reportedly become insolvent.

All Thubelisha employees have transferred to the new government agency.

In response to the report, the Department of Housing said it would ensure “all corrective and necessary control measures are put in place as a matter of urgency”.

It added that the “lessons learnt from the successful implementation of the (project) would be shared with other state-funded projects nationally”.

o This article was originally published on page 4 of Cape Argus on May 01, 2009

CAPE TOWN – About 1000 Delft residents who occupied “Breaking New Ground” homes in Delft on December 20th 2007 will appear in the Cape High Court again tomorrow.

As usual, all the residents will be coming to the court and will hold a rally outside.

The residents will continue to be represented by Ashraf Cassiem, Anti-Eviction Campaign Legal Co-ordinator, since they do not have money for an advocate. The residents are all demanding to stay in their homes that they have occupied. All residents have a moral and legal right to be in those homes, having been on the waiting list for as long as 20 years.

The Anti-Eviction Campaign also rejects Thubelisha Homes’ assertion that the Anti-Eviction Campaign is working with the DA. Our position is very clear “no house, no land, no job, no vote.” We don’t support any political party, we support the people. The Anti-Eviction Campaign has a long history of opposing both the DA and ANC’s identical housing, water and evictions policies.

For comment please call Ashraf Cassiem on 076 1861408