Built Environment Support Group

On 10th March 2011, the KZN Department of Human Settlements signed approval to the largest single project in the history of the national housing subsidy scheme – R2,1bn for 25,000 houses and related work in the rural Vulindlela area of Msunduzi. A joint venture partner with BESG Development Services had attended a compulsory site meeting in response to a proposal call for a housing project in February, which was mysteriously cancelled without notice. Concurrently, BESG had been training three CBOs in the area, and they contacted us to find out why there was suddenly a flurry of activity on site. The story broke in the media in mid-April that Human Settlements had entered into an exclusive contract with a company whose Directors were mostly amakhosi from the area -- “Vulindlela Development Association” (VDA) -- without a due tender process. Behind the initiative was a politically well-connected private company, Dezzo Holdings, which was in turn given an exclusive contract to implement the project by VDA.

The development and approval of the project contained a host of irregularities and a clear breach of the Municipal Systems Act and the Public Finance Management Act. Msunduzi Municipality’s Integrated Development Plan (IDP), which is the gateway to funding such development, was manipulated without public consultation while the Municipality was under provincial administration; with the effect that a project planned initially for 2,000 housing units across 4 wards underlying Vulindlela, suddenly increased to 25,000 units across all 9 wards.

 Vulindlela

Conventional contractor-built show-houses in Vulindlela belie the claim that the project follows the “People’s Housing Process.”

When KZN Human Settlements was approached by the media to explain why there had been no compulsory tender, the response was that the project was being funded under the Enhanced People’s Housing Process (EPHP). This is a relatively new policy which BESG was party to drafting that is intended to support community-initiated housing processes. It provides for the Department to enter into negotiated contracts with accredited Non-Profit Organisations acting as “Community Resource Organisations” (CROs) to support the community and households involved. However, the National Department has yet to approve and publish accreditation criteria for CROs, the funding model, and Implementation Guidelines to regulate the policy. Critically, the relationship between an experienced commercial developer/ implementing agent and a purpose-made Non-Profit company with no prior knowledge of or experience in housing delivery had all the makings of a “fronting” operation established for the sole purpose of guaranteeing the project would be awarded without a transparent and competitive process.

Our Executive Director was contacted by the media for comment, as a specialist in low-income housing and a member of the EPHP Reference Group hosted by the National Department to assist it in developing the policy and implementation framework. Subsequently, BESG became one of three complainants resulting in an investigation by the Office of the Public Protector. The investigator’s report was delivered to the Public Protector as the year drew to a close.

 

Associated Newspaper articles:

Back-door Deals in Vulindlela - the Witness   Thursday 19 May 2011.pdf

Housing project flawed - Daily News   13July2011.pdf

Housing tender storm grows - Witness   14July2011.pdf

Overview of the Vulindlela Rural Housing Project.pdf

PP inquiry to start - Daily News   12Aug2011.pdf

Residents demand transparency - Witness   15July2011.pdf

Suspend project - Maritzburg Echo   21July2011.pdf

Vulindlela double speak - Witness   01Aug2011.pdf

Vulindlela workers down tools - Echo   30Aug2012.pdf

Workers march Vulindlelaville - Witness   30Aug12.pdf