News24 | R71m Gauteng housing project riddled with 'financial mismanagement', say EFF, DA

• A contentious housing project in Gauteng was condemned by opposition parties.
• The housing project had its power disconnected after a rent boycott by residents.
• A government agency said it had launched a forensic investigation into allegations of maladministration. 

The EFF in Gauteng accused the ANC of "embezzling" taxpayers' money after a contentious R71-million social housing project was granted to a company facing liquidation for bad debt and "financial mismanagement". 

Moreover, the DA's Solly Msimanga echoed the EFF's views, saying the lack of coordination between the national and provincial governments, including government housing agencies, resulted in wasteful expenditure because the state had paid more than the budgeted amount in shoddily-run housing projects. 

The opposition parties were reacting to News24's 14 November report that the Social Housing Regulatory Authority (SHRA) gave R71 million to Lets Care South Africa – which faces liquidation for more than R11.6 million in debt, and is also accused of "financial mismanagement" by SHRA – to develop government-subsidised houses to low-income beneficiaries in Ekurhuleni, Gauteng. 

The housing development is the Sondela Village in the Ekurhuleni town of Springs. 

Following the 14 November report, it emerged that SHRA appointed a property manager and "social facilitator" to assume the running of Sondela because of what the housing authority said was Lets Care's "maladministration and non-compliance" with the Social Housing Act for failing to adequately use the millions of rand in state funding the company received. 

READ | R71m social housing project in Ekurhuleni embroiled in 'financial mismanagement'

This was revealed in the minutes of an April meeting, which was chaired by Tebogo Manyama of the national human settlements department, and seen by News24, involving the SHRA, Sondela residents and representatives of Lets Care. It showed that Lets Care failed to resolve the complex's electricity crisis after the City of Ekurhuleni cut its power for non-payment. 

"Mr Manyama told the meeting that the appointment of the social facilitator and property manager would unlock the processes to allow for the restoration of services. Also, the tenants made it clear that they were not willing to pay rent to Lets Care," read the minutes. 

SHRA spokesperson Lesego Diale told News24 that the state agency received a high court order to take over Sondela's administration, adding: "The SHRA is currently implementing the administration order, which includes a forensic investigation into all allegations of maladministration." 

Msimanga, however, said Sondela was an example of lousy government planning that required additional state spending to remedy shoddy work. 

He said:

The EFF's Nkululeko Dunga, however, was less diplomatic, charging that the "ANC government… knowingly and deliberately awarded a R71-million social housing project to a dubious and incompetent company".

Dunga argued that this was a "plan to loot and embezzle taxpayers' money to ANC leaders".

"The project is a dismal failure; the company appointed built low-quality houses, without proper water and sanitation infrastructure. The village owes the City of Ekurhuleni an electricity bill, and at the receiving end of it all are innocent occupants who continue living in darkness," Dunga said.

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"The EFF demands accountability on the Sondela Village project. Putting the project on hold, as SHRA has done, without bringing to book [people] responsible, is not enough.

"We demand that a forensic investigation be speedily instituted to expose the [people] who awarded a R71-million project to a disreputable company, their names, and what and how they stood to benefit."