Today, the Northern Cape Department of Cooperative Governance, Human Settlements & Traditional Affairs confirmed to a joint meeting of the Northern Cape Provincial Legislature that only 7% of the Premier’s housing promises have been met. But the R1 billion housing project has already burned through 68% of the first of two loan instalments.
The briefing was done at the demand of the Democratic Alliance (DA) in the Northern Cape, as we are increasingly concerned that the fast spending by the department is not matched by the slow delivery of promised houses.
Premier Zamani Saul promised in December 2023 that an innovative loan agreement with the Development Bank of South Africa (DBSA) would secure 6 500 new houses within 12 months. During the official launch of the R1 billion housing project in January 2024, president Cyril Ramaphosa also promised that 4 000 new homes would be built within the next 12 to 18 months.
Now, 28 months later, the department has managed to build just 480 houses.
Even though it gave the province only 7% of what was promised by the Premier, it has already spent more than R204 million in the process. This amounts to 68% of the first tranche of R300 million paid by the DBSA. DBSA is still expected to transfer a further R300 million to the province, as part of the piloting of a new funding mechanism that seeks to expedite infrastructure delivery. Infrastructure projects are traditionally financed by conditional grants that are disbursed when certain conditions and completion levels are met whereas the R1 billion housing would use a frontloading mechanism that would release significant funds before project execution commences.
So far, the frontloading mechanism in the Northern Cape appears to have expedited financial mismanagement rather than infrastructure delivery. It seems inevitable that the province will fail to meet the conditions of the DBSA loan, even with the target of houses decreasing by a staggering 61%.
The department still cannot justify why the province was plunged into debt and committed to millions in interest repayments when it could have easily constructed these homes from the existing Human Settlements Development Grant funding.
We will continue to demand accountability from the department, its implement agents, and contractors entrusted with public funds. It is easy to say that this is a new method of infrastructure funding that has not yet been tested elsewhere in the country. It is far more difficult to admit that the pilot project has found the Northern Cape provincial government wanting.