The Human Settlements Department will move a total of R463-million in grant funding from two underperforming provinces to provinces that have met their delivery targets.

R263-million is to be moved from Free State and R200-million from KwaZulu-Natal, Minister Tokyo Sexwale announced on Tuesday.

The Northern Cape would receive R182-million of these funds, primarily for the construction of 2 070 new houses across the province, at a cost of R178-million, as well as the upgrade of 350 units in informal settlements at an estimated cost of R78-million. The remainder of the funds would be used for integrated residential developments.

A further R131-million was allocated to Limpopo, mainly for the construction of 5 300 houses in 17 districts, as part of the province’s rural housing programme.

The remaining R150-million would go to the National Rectification Programme for the repair of badly-built houses in various provinces.

Sexwale said that the Western Cape and Eastern Cape were earlier in the group of underperformers and would be closely monitored.

“We still expect that, by the end of the administration’s term, all provinces will by and large have met their targets,” he noted.

He emphasised that the R463-million remained in the housing delivery process and would be used to contribute directly to tackling the housing backlog and the needs of the poor, rather than being rolled-over or returned to National Treasury.

The Department of Human Settlement (DHS) currently distributes about R14-billion a year to the country’s nine provinces for low-cost housing and related projects.

In October, the DHS identified significant problems with expenditure and delivery in four provinces, Western Cape, Eastern Cape, KwaZulu-Natal and Free State, which was confirmed by National Treasury’s mid-term provincial expenditure report, published in November.

The main reasons for this underperformance included a lack of capacity in provinces, particularly project management experience, as well as a lack of bulk infrastructure, such as large-scale electricity and water supply projects.

All nine provinces were asked to provide the DHS with recovery plans to demonstrate how they were going to meet their monthly and yearly delivery targets.

There have been similar transfers of human settlements grants in the past. In the 2009/10 financial year, the Free State was allocated an additional R100-million, which had not been spent by other provinces.