NATIONAL RECTIFICATION PROGRAMME SELECT COMMITTEE ON APPROPRIATIONS 11

NATIONAL RECTIFICATION PROGRAMME SELECT COMMITTEE ON APPROPRIATIONS 11 SEPTEMBER 2012

Presentation Outline • • • Background Rectification Defined Objectives of the Project Implementation Framework National Coordinator Financial Implications Funding Arrangement 2012/13 Provincial Budgetary Allocations Conclusion 2

Background • The National Rectification Programme aims to correct defects on subsidy houses resulting generally from poor workmanship on subsidy houses that do not meet technical requirements as specified by South African National Standards (SANS) 10400 and NHBRC, as may have been applicable at the time of construction • Structural defects observed on a substantial number of subsidised low cost houses built between 1994 and 2010 has necessitated the NDo. HS to embark on the rectification programme. 3

Background (Cont…) • These defects are a result of a number of factors including but not limited to the following: ü Poor workmanship ü Use of inferior and inappropriate material ü Deviation from specification ü Poor project management ü Lack of supervision ü Unscrupulous contractor 4

Rectification Defined • It refers to the process of correcting structural and other defects on low-cost houses which may be resulting generally from poor workmanship that do not meet the technical requirements specified by the NHBRC and SANS • The process of rectification is preceded by a thorough engineering assessment of the structural condition of each unit to determine the nature and extent of the defects and the rectification required. Based on rectification technical specification, an estimation of cost per house is then determined 5

Objectives of the Project • Identify the full extent of the scope and estimated cost of defective houses • Implement a process of successful rectification of all defective houses • Professional execution of the project within time budget and according to specification • Proper liaison between all stakeholders to ensure longterm positive outcomes in affected communities • Consideration of environmental and social impacts • Establish a proper and effective reporting system 6

Implementation Framework • Managed at two distinct levels which entail the following main activities: ü National level (PMU) ü Conceptualize and plan the implementation ü Obtain support from provincial and local government ü Approve implementation programme ü Standardize tender documentation 7

Implementation Framework (Cont…) ü Align approach ü Coordinate ü Consolidate reporting • Provincial/Regional level ü Issue instructions ü Construction supervision and quality control ü Certify payment ü Monitor and report performance 8

National Coordinator • A professional service provider will be appointed to support the PMU to coordinate and align the implementation programme. The following are the functions of the service provider: ü Evaluate/ verify the findings from the NHBRC ü Conceptualize and plan programme and obtain approvals ü Compile standardized tender documentation 9

National Coordinator (Cont. . ) ü Engineers cost estimates ü Facilitate the tender, evaluation and appointment of building contractors per province ü Obtain, evaluate and approval of delivery programmes and cashflows ü Facilitate the tender, evaluation and appointment of local service providers for site supervision, quality control, safety aspects etc 10

Financial Implications • Category 1: Non Structural Defects: Moderate Rectification Work • Category 2: Minor Structural Defects: Extensive Rectification Work • Category 3: Major Structural Defects: Demolish And Rebuild 11

Summary of Category of defects & rectification cost estimate Category of Defects and Rectification Cost Estimate Category Description Cost Estimate Category 1 Moderate rectification R 19, 523. 74 Category 2 Extensive rectification R 38, 673. 00 Category 3 Demolish and rebuild to new standard of 40 m 2 R 85, 468. 88 Extra over Cost of temporary accommodation R 25, 000. 00 Extra over Assessments Cost of Civil Engineering Infrastructure per Standwhere applicable New assessments for houses that have not been assessed R 45, 000. 00 R 1, 200. 00 12

Financial Implications (Cont. . . ) • The cost estimates (category 1&2) are the average cost estimates based on the defects observed on poorly constructed low-cost housing • The estimate includes the professional fees • The extra over cost for temporary accommodation is provided for in order to temporary accommodate the people construction work is being carried out on their units • The provision for civil engineering infrastructures is assumed and will be verified during the assessment review 13

Funding Arrangement • Funded from an amount of up to 10% of the budgetary allocation of the Provincial HSDG 14

2012/13 PROVINCIAL BUDGET ALLOCATION PROVINCE UNITS BUDGET % ALLOCATION EC 5, 700 415, 983 18. 14 FS 1, 076 41, 425 4. 31 GP 20, 004 34, 570 0. 86 KZN 3, 249 274, 590 9 LIM 881 60, 684 4 MP 120 3, 960 0. 41 NC 180 11, 500 3. 39 MW 1, 285 52, 683 5 WC 1, 734 34, 355 2 Total 34, 229 929, 750 47, 07 15

CONCLUSION • Rectification is a ü Very critical and sensitive programme but ü Should not be the mainstream activity in the Business Plan 16

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