24 January 2013

South Africa: Housing Delivery Slow Down - a Fall Out From the Farm Workers Strike

press release

The provincial department of Human Settlements welcomes this week's announcement that the farm worker's strike would be suspended in the area of De Doorns. While we fully understand and respect the right of farm workers to go on strike, the effects of the strike had a negative impact on the delivery of houses in the area of De Doorns in particular.

In De Doorns, the contractor responsible for the construction of 611 houses (top structures) and 645 serviced sites was forced to move off site as from November 8, 2012. This decision was taken in order to protect the equipment of the contractor from the strike activities that were unfolding in the De Doorns area. To date, seven weeks of production, excluding the three weeks builder's holiday were lost as the result of the decision to move off site.

In terms of the agreed targets between the contractor/Breede Valley municipality and the department, and with regard to progress made to date, there is a balance of 411 houses and 140 serviced sites still to be constructed before the end of the 2012/13 financial year (31 March 2013). With the recent announcement to suspend the strike, the contractor and the municipality confirmed to the department the likelihood to complete the outstanding 140 serviced sites within the stipulated time and this commitment is applauded.

The same however cannot be said about the completion of the 411 outstanding houses as there are many uncertainties around the delivery of top structures within the stipulated period (31 March 2013) owing to the contractor being forced out of De-Doorns as the result of the strike. This, at the moment can translate to the possible under expenditure for the financial year amounting to approximately R 30,5 million, in this project alone. The other effect of this delay will require our department to pay a further fee estimated at approximately R3 million, due to amongst others: standing time on plant and equipment; extension of the time due to strike; acceleration cost to complete the project, damage to works and materials; etc.

Now that the strike has been suspended, we have been reliably informed that the contractor is monitoring the situation and planning to re-establish itself on site. It has been also mentioned that, gearing up again for works, the contractor will need about 1 week.

This situation as stated above and many others always pose a threat in any built environment like the one we are in. In our situation, spending the money alone is no longer accepted if it's not properly matched with the output (physical houses on the ground).

Notwithstanding the challenges presented by the situation that we find ourselves in, under performance must be mitigated. That is why my team and I, with the support of Minister Madikizela, are visiting all municipalities, like Breede Valley, to ensure that all the commitments made are fulfilled through the delivery of houses and serviced sites as planned. We will endeavour to do everything we can in order to meet our annual targets and remain optimistic that we will do so.

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