DA challenges Sisulu to release full SIU report on R20 Billion fraudulent housing projects

BY TAI CHISHAKWE - SEPTEMBER 15, 2014

On Monday, the Democratic Alliance (DA) challenged Human Settlements, Lindiwe Sisulu, to make public the full Special Investigative Unit (SIU) report on fraudulent housing projects that reportedly cost around R20 billion.

This is after the Department of Human Settlements revealed that the SIU has completed an investigation into 59 fraudulent housing projects worth R20 billion following a question by the DA’s Marius Redelinghuys.

“This is a shocking admission that underlines how badly administered South Africa’s RDP build programme has become. It is unclear how much of this R20 billion has been lost to fraud and how many RDP homes are involved.

“We urge the Minster of Human Settlements, Lindiwe Sisulu, to urgently make the full SIU report public. I will write to her to request that she present it before the Portfolio Committee on Human Settlements and to expand on what measures are in place to have the contractors responsible blacklisted nationally. Her current, very vague, reply does not suffice,” said Makashule Gana, Deputy Federal Chairperson of the Democratic Alliance and Shadow Minister of Human Settlements, in a statement.

“Her reply indicates that the scope of those investigations included, but was not limited to, payments for incomplete projects, fraudulent claims, over-billing and poor workmanship.”

He said that high level findings of the investigation included:

  • Non-compliance with the National Housing Act, 107 of 1997, and the National Housing Code;
  • Non-compliance with the Public Finance Management Act, 1 of 1999;
  • Non-compliance with the Value Added Tax Act, 89 of 1991;
  • Fruitless and wasteful expenditure;
  • Irregular and unauthorised expenditure;
  • Gross misconduct on the part of implicated government employees; and
  • Proceedings to refer criminal charges and recover monies lost (civil cases) were instituted and/ or handled by the SIU.

“It is unacceptable that the Department’s National Rectification Programme has spent billions on repairing houses due to poor workmanship. It has now been revealed that the department is also losing large sums of money on fraudulent housing programmes.

“This all takes money away from the construction of new RDPs to reduce the housing backlog and improve the lives of South Africans,” Gana said.

He went on to say that Minister Sisulu must table the SIU report before the Portfolio Committee on Human Settlements so that the public may know how much of the R20 billion implicated has been lost to fraud; what the non-compliance with various pieces of legislations mentioned above entail; whether any criminal charges have been laid; which projects were affected and at what cost; and which contractors were implicated and whether they have been blacklisted and/or – whether they received additional contracts as well as what has been done to recover lost money.

“This is a massive scandal. We will do everything we can to get to the bottom of what transpired with these 59 housing projects,” Gana said.