A State Construction Company for the Delivery of Housing in South Africa?

May 10, 2012 by Lorraine Nzimande | 1 Comment

It has been reported in the Business Day today, that the South African Minister of Human Settlements, Tokyo Sexwale, in his Budget Vote delivery in Parliament on the 9th of May 2012, proposed a state owned construction firm. The Minister is quoted to have stated that when houses in the government housing programme are built, the state relies on ‘by and large’ inexperienced shovel, wheelbarrow and bakkie brigades. It is important, however, to note and be critical about how and why these ‘inexperienced shovel, wheelbarrow and bakkie brigades’ are working in the housing construction sector in the first place.

The national housing policy, Breaking New Ground (approved by Cabinet in 2004) explicitly lists “utilising provision of housing as a major job creation strategy” as one of the objectives of the Department.  It has been a strategy of the Department of Human Settlements to promote the participation of small scale builders and contractors in the housing process – and for this Nurcha was created as the government institution responsible for providing finance to “contractors who cannot easily access finance from conventional financial institutions”.  One of Nurcha’s development principles is to “use Nurcha loans to contribute to the emergence of a new generation of successful, black-owned construction companies”.  To protect against quality problems, the National Home Builders’ Registration Council was created as a regulator of the home building industry. Every home builder in South Africa is required by law to be registered with the NHBRC.  The NHBRC also provides free technical training to emerging builders.  These measures should address the Minister’s concern about the relative lack of experience, should they not?

The Minister further reported that the department would focus on low cost housing construction projects in an attempt to root out corruption and maladministration as these have been identified as the main obstacles in the government’s drive to deliver housing to the poor. Ironically, the minister also highlighted the department’s initiatives in the fight against corrupt public servants. He reported that 290 were arrested, more than 240 found guilty and more than 220 were facing internal disciplinary action. These are individuals operating within state institutions some of which are directors and CEO’s- leaders within these institutions.

Although the dynamics of this state owned construction company have not been made clear as yet, I beg to question its effectiveness, should it come to pass. This idea is highly controversial and somewhat contradictory to other country’s developmental goals such as job creation and skills development and maybe even housing delivery. It was recently reported from a study by Professor Viruly that the South African housing construction sector boasts one of the highest employment multipliers in the country. Discourse and deliberations in this area therefore, have many facets to consider: What will this state construction company imply for the numerous existing players in the housing construction market, for job creation and most importantly, the delivery of housing in the country?

DISCUSSION THREADS

  1. TONY SILLATO , 07 August 2012

    The Housing Crisis in SA will continue to be detrimental until one Government Official will finally stand up and get the courage to face the descrimination and abuse by controlling the manner of allocation of Public Funds aimed at helping the Crisis instead of magically disappearing in unsustained charges or expenses by everyone holding on to the Gravy Train.
    We have been sucessfully negotiating with a number of countries and delivered Affordable Homes to the Public at a fraction of a Realistical Price based on two reasons.
    1. The Governements have set up a dual control policy, one watching what the other does and reporting ANY descrepancies.
    2. We have a construction System that uses Local Employment, materials and it takes us 5 days to buid a 45m2 Home with no waste or mess. A Concrete Home with Impact resistant windows and totally insulated for better energy savings. These Homes fit in the ranges required to offer the SA Population, granted freely or made to pay contributions homes and based on the sizes required for each application, meeting the minimun available funds for payment of the Home to the Construction / Development company.
    If that person exists or is willing to face the risks involved by standing up for the rights of the Population, making SA’s individual Families Proud to come to a Home and not a shack from advertising boards or corrugated sheeting stolen from somewhere, we have been and always be interested in investing in the Country, based on the assurance of having payment on delivery.
    We can accomodate self sustained homes by virtue of independent Solar Usage, Again this would only be feasable within a large developmnet community and fenced off against the unwanted thieves.
    Ohh if there would be a chance….
    We are here and can deliver…
    Ourb 45m2 Home is built in FIVE DAYS, complete with tiling and painting etc and with a 6 man unskilled / skilled crew.
    Regards,
    TONY SILLATO
    RIVERHEAD-HOMES.COM

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