Thubelisha is now insolvent and is likely to be liquidated because of mismanagement and disrespect for poor communities

23 05 2008

Note from AEC: Poor residents all over Cape Town have long been complaining about Thubelisha Homes’ lack of consultation with poor communities and their authoritarian housing policies that resort to forced removal. Management of the N2 gateway flats have been a failure; Joe Slovo residents are exercising their right to resist forced removals next door; and now homeless residents of Delft houses have been evicted while Thubelisha gives these same BNG houses to its business friends and contractors.

Housing agent Thubelisha is R67m in the red

Andisiwe Makinana
May 21 2008 at 05:33PM

Thubelisha Homes, the government’s housing agent which was mandated to implement low-cost housing and now faces closure, is technically insolvent.

This was revealed when the company presented its performance review for the financial year (2007-08 ) to Parliament’s portfolio committee on housing on Tuesday.

The company had targeted a profit of R49,5-million and instead made a loss of R67,5-million, a variance of R117-million.

While Thubelisha had projected revenue of almost R975-million, its actual revenue stood at R338,4-million, a difference of R636-million.

‘We are struggling without top-level staff’
“With that deficit, the company could be liquidated,” said committee member Butch Steyn, who also lamented that not a single one of the company’s other targets had been reached.

The presentation revealed that of the 38 407 stands and houses approved for implementation, only 22 717 were actually implemented - a deficit of almost 16 000.

The company had handed over only 2 889 of the 5 422 built houses to clients. Its target had been to hand over 16 290.

“This is very disappointing,” said Steyn.

While Thubelisha’s general manager of finance, Wayne Bothma, admitted that “technically we are insolvent at the moment”, its acting chief operations officer, Annie Orgill, explained discrepancies leading to the shortfalls.

‘We have had to help them. We buy material and they provide labour’
She said Thubelisha had been losing top-level technical staff, which had had a negative impact on the company’s performance.

“We are struggling without top-level staff. It’s difficult as we are not at full staff,” Orgill said.

She said the resignations had to do with “the concept of the incoming Housing Development Agency (HDA)”.

The HDA will be established under the Housing Development Agency Bill and will be “the engine for driving and facilitating acquisition of land and landed property in a way that supplements the capacities of government across all spheres”.

Orgill also mentioned problems with the N2 Gateway housing project and said they were working in a very political environment, involving the three spheres of government.

She said that although Thubelisha was a project management company, the company had found itself doing “developer’s work”.

This was because they were working with emerging contractors because medium-sized contractors had moved on to big projects like building stadiums for the 2010 World Cup.

Orgill said these emerging developers didn’t have the capacity or capital to even purchase materials.

“We have had to help them. We buy material and they provide labour.

“We thought because we had a consortium, matters would be easier, but we are struggling with funding,” she said.

Earlier, national Housing Department director-general Itumeleng Kotsoane had brief-ed the committee on the closure of Thubelisha and its sister company Servcon.

Kotsoane said this should be finalised in six months.

He also told the committee that they would encourage the HDA to consider appointing staff or employees from the two institutions.

The closure of these companies was because of the government’s rationalisation of institutions whose original mandates had matured.

Kotsoane explained that the HDA was not a replacement of the two companies, as their mandates were different.

“Some of the things Thubelisha and Servcon did will be done at micro and macro levels by the HDA,” he said.



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