Minister Sexwale talks corruption

Human Settlements Minister Tokyo Sexwale has urged private business to get involved with projects that bring affordable housing to the market, saying their investments will be secure.

“I know the private sector has always had its reservations of getting involved in these kinds of developments, we understand that. That’s why we have come up with products via (government) agencies that will safeguard the investments of the private sector and ensure and insure their involvement.”

Sexwale was speaking to Moneyweb at the official launch of the Fleurhof integrated housing development south-west of Johannesburg. The development straddles Soweto and Florida on the west rand.

He explained that the Department of Human Settlements (DHS) had a strong partnership with the private sector facilitated by its agencies like the National Housing Finance Corporation, Nurture and the Rural Housing Loan Fund.

Sexwale also made mention of President Jacob Zuma’s State of the Nation address in which he announced the establishment of a R1bn fund to service the so-called GAP market. This market is to assist would-be homeowners who earn too much to qualify for a government subsidy but fall below the requirements for a bond.

He further explained: “What it means is we provide a guarantee to the banks so that they can on-loan to the private sector to get involved in these types of projects where the margins are not as superior. Obviously margins shouldn’t be high in these types of projects because these are supposed to be affordable for low income people.“

In recent months the CEO of Redefine Properties, Marc Wainer, said he would no longer get involved with government projects because of corruption and ineptitude, saying he was taking his business north of the border. This has been echoed by other property tycoons.

Asked if there was anything government was doing or could do to make it easier to do business with it, Sexwale replied that was the role of the DHS’s agencies to facilitate these deals. He said the DHS was continually swamped with proposals from developers: “We have hundreds of thousands of offers, some are accepted. Some don’t make it, that’s the essence of the free market system.”

He added, however, if anyone suspected any foul play they must speak up: “If they are not accepted because of corruption, tell us, because of bias, tell us. That’s why I’m here and then we can see how things have been adjudicated.”

In between all the celebration and speeches, Sexwale made a brief reference to the Marikana disaster in which 45 people died during six weeks of a wildcat strike at Rustenburg’s Lonmin mine in the North West.

Sexwale said the incident should never have happened but that miners needed decent housing.
He said the DHS would be visiting the conflict-ridden area together with mining houses once the dust had settled to evaluate what could be done.

“I saw the informal settlements next to Marikana. We [government] don’t build informal settlements. We remove them and provide proper houses.”

Here he referred to what he called the “each one must settle one” project calling on mining houses and other big business to get involved in building houses for their employees.

Sexwale said Anglo Platinum was the first company to come on-board and support it by building 20 000 houses in the North West and Limpopo. Harmony Gold was another that supported the project.

Sexwale told Moneyweb: “Companies like Lonmin were approached on this and they were not forthcoming on this question. I hope Lonmin will have a rethink about the proposal we put before them.”

The Fleurhof development promises to be one of the largest integrated development projects in Gauteng.

Low-income housing contractor Calgro M3 CEO, Ben-Pierre Malherbe, says Fleurhof has seen considerable demand in the entry-level GAP market and is being developed in partnership with International Housing Solutions and the City of Johannesburg with FNB financing it.

The developed land consists of three components: a third of it is fully subsidised, another third comprises rental and social housing and the last is made up of entry-level affordable housing. Social housing units are partly subsidised.

Sexwale says Fleurhof is one of 8 000 similar projects earmarked across the country.


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