May 01 2009 at 02:30PM
By Ella Smook Source: The Argus
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