Media Statement - 16 August 2010

The Department of Human Settlements is intensifying its crackdown on dodgy housing contractors, and has drawn up a shortlist of 20 problematic housing projects – with a total value of R2-billion – which are currently under investigation.

The probes are being conducted by the National Audit Task Team appointed by Human Settlements Minister Tokyo Sexwale in November 2009, headed by the Special Investigating Unit (SIU).

The SIU’s mandate to investigate corruption in the housing delivery process was recently extended by President Jacob Zuma, enabling Minister Sexwale’s Task Team to continue with its work.

“The task team has made excellent progress in cracking down on corrupt officials who have abused housing subsidies,” Minister Sexwale told a media briefing on the Task Team’s work, held in Pretoria today. “Now the focus is on housing syndicates – which are of increasing concern – and on dodgy contractors. “We are putting increased resources into investigating all those who abuse the system – government officials, public representatives or contractors.

” Sexwale explained that a total of 10 246 housing projects have been assessed by investigators since the Task Team was appointed last November.

The SIU visited all nine provinces to get an understanding of processes and to obtain a high-level overview of all projects on the Department of Human Settlements’ database.

Initially, the top ten ‘dodgy’ contracts in each province were identified. Further investigation narrowed these down to a national list of 20, with a total value of R2-billion.

“Their work is already bearing fruit,” Sexwale said. “Already, a conveyancing attorney in KwaZulu Natal has been charged with 142 counts of fraud and theft. Two criminal cases have been registered with SAPS for fraud in respect of a contractor and engineer who defrauded the department of more than R10m.

” Sexwale also said the process of restriction in respect of more than 40 contractors is in an advanced stage. Defaulting contractors will be placed on a Restriction Database once the process is complete.

Sexwale congratulated the SIU, headed by Willie Hofmeyr, for its achievements in charging and arresting government officials involved in housing subsidy fraud. The SIU began these investigations in 2007. So far, it has arrested 1 910 government officials who were unlawful beneficiaries of housing subsidies, and successfully prosecuted 1 297 of these. Disciplinary files have been prepared against another 1 297 officials. In addition, the SIU has recovered R44m from provincial and municipal officials, which goes back into the human settlements grants for service delivery.

Sexwale also told the media briefing that the SIU has been asked to investigate a number of complainsts which have been raised about the National Home Builders’ Registration Council, which provides a quality-control function to housing contractors.

“A number of complaints have come in recent months from members of the public, from Parliament and from political parties. These complaints have been forwarded to the SIU for investigation, and a report is expected.” He concluded: “The focus now is threefold. We have broken the back of government officials involved in housing subsidy fraud. We have the housing syndicates in our sights. And we are rapidly closing in on the dodgy contractors.”

Press Release Date: 
Monday, August 16, 2010