The Bay council has appointed the Housing Development Agency (HDA) to upgrade informal settlements on its behalf — two days before the expiry of the deadline to spend the balance of a R314m grant.
The decision was taken on Tuesday in the hope that the move would help the city secure a rollover of the funds when it applies to the National Treasury in the new financial year, which starts on July 1.
The deadline to spend the unspent portion of the Informal Settlements Upgrading Partnership Grant — amounting to R251m — is Thursday.
The HDA is a national public-sector agency that acquires and prepares land, develops it and project-manages the development of housing in partnership with the national, provincial and local governments.
Tuesday’s council decision was taken after weeks of wrangling in the human settlements portfolio committee, with DA and EFF councillors vowing that they would not support the move.
Housing boss Tabiso Mfena had told councillors that appointing the agency as an implementing agent meant the city would secure a rollover of funds because the grant had not been completely spent.
The DA, through its committee spokesperson, Nicholas Nyati, initially suggested the money be sent back to the Treasury.
Nyati argued that handing over the funds to the housing agency — which he described as a failed entity — was tantamount to fiscal dumping.
But he said he had eventually decided to take a proactive approach and support the move.
The grant is earmarked primarily to cover the costs of installing electricity in informal settlements and building temporary housing — and if it is not spent by June 30, the metro stands to lose it.
Spending of the funds had been shelved for months because of protracted delays in the council approving the 2021/2022 adjustments budget.
Nyati said he had spoken passionately against the housing agency managing the grant because of the body’s checkered history.
He said finally agreeing to let it manage the grant had been a difficult decision.
“We have consulted with different political parties.
“We have visited informal settlements and we have looked at the feedback from the articles,” Nyati said.
He said residents of informal settlements had indicated during discussions with the DA that housing was their priority, and not toilets and electricity.
Nyati said the party had also taken into consideration that the grant money had not been spent due to delays in the council.
“The DA will support this on condition that HDA becomes a standing item in our committee so we are able to monitor them,” he said.
ACDP councillor Lance Grootboom said he was concerned the city had yet to apply for a rollover of the funds.
“The problem is this money is a conditional grant and it is gazetted in such a way that the money is earmarked for Nelson Mandela Bay.
“When the money is gazetted there are conditions in terms of the Division of Revenue Act and that gives specific guidelines about how to spend this money.”
Grootboom proposed the council seek guidance from the Treasury.
“Why can’t we go to National Treasury because we have to spend this money?
“This is a result of poor management and poor planning.”
ANC councillor Bulelani Mathenjwa said the party would support the move because it would benefit thousands of people who were in need of housing.
PA councillor Bradley Murray said it had backed the decision because the grant money would result in houses being built in the northern areas.
“This money will see the construction of roads, upgrading of sports facilities. Because of that, we fully support this item,” Murray said.
EFF councillor Ziyanda Mqokoyi said the money needed to be spent urgently.
“There are now 154 informal settlements in Nelson Mandela Bay and we need to support these informal settlements, the money needs to be spent now,” Mqokoyi said.
The DOP and PAC also backed the move.
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