Human settlements officials accused of not doing enough

‘Public funds must drive change’

The national department of human settlements yesterday threw the book at its officials, saying they were not doing enough to use public funds to drive economic transformation.

National director-general of the department of human settlements, Mbulelo Tshangana, made the assertion during the Gauteng Infrastructure Funding Summit which took place at Gallagher Convention Centre in Midrand.

“In human settlements, we all know that 60% to 70% of the development costs are associated with material supply.

“This means the biggest cost driver in any project is the acquisition of the material supply.

“But what we do as government is that we leave that 70% up to those developers to manage, which then means we are not the price-maker, we are the price-taker,” said Tshangana.

He said the department nationally has an annual budget of R32-billion, which he felt was not administered properly.

Tshangana said many department heads sourced material from companies that were not transformed.

“The developers and contractors you have appointed are price-makers, but they are not obliged to source material from transformed suppliers because you don’t have that in your contract,” he said.

“Therefore, you leave the material supply aspect of the business unattended to, you leave it untransformed, and you leave it to the developers and therefore they use the budget that you have to decide who they are going to source the material from,” he said.

Tshangana said there were examples across the country where untransformed developers used money from the state to source material from untransformed suppliers.

“What I would urge is that ... when we manage development, let us us look at the entire value chain of human settlements: the professional part of it, the construction part of it, the material supply of it.

“If you want to transform the industry you must look at the entire value chain,” he said.

Let us look at the entire value chain Mbulelo Tshangana DIRECTOR-GENERAL