NEWS & MEDIA

MINISTER OF HOUSING SANKIE MTHEMBI-MAHANYELE WELCOMES THE USA INVESTMENT FOR HOUSING

PRETORIA: Housing Minister Sankie Mthembi-Mahanyele has welcomed the R200 million grant from the Oversees Private Investment Corporation to help in the construction of about 100 000 low-cost houses for approximately 350 000 homeless people in the next five years. The grant was made to the National Urban Reconstruction and Housing Agency by OPIC. NURCHA is expected to provide an equivalent amount of R200 million to complement the grant.

"The deal between OPIC and the government will contribute to the broadening of access to affordable finance to other emerging housing contractors and developers to construct houses in the low-income market to ensure delivery and sustainability", said Mthembi-Mahanyele.

The negotiations about the grant started in February this year when Mthembi-Mahanyele went on a trip to Washington DC where she met with representatives of OPIC, an agency of the United States Government, to discuss the agency's potential participation in the South African low-income housing market. OPIC's function is to guarantee overseas investment by United States based Companies.

Mthembi-Mahanyele's visit was followed by OPIC's delegations to South Africa in April to explore the potential investment further. It was during the meetings with OPIC's delegations that a decision was taken to the effect that OPIC would work with the South African government through NURCHA, to facilitate access to finance for lo-cost housing in South Africa. NURCHA has since facilitated the construction of more than 100 000 houses since its inception in 1995 to the current value of R1, 6 billion and assisted more than 160 emerging contractors and developers to manage substantive projects and to help them access bridging finance to facilitate their projects. Contractors and developers have also benefited from training sponsored by NURCHA. This year alone, NURCHA has facilitated projects worth about R80 million for female contractors and developers.

The government is currently confronted by a housing backlog of between 2 to 3 million units affecting 7,35 million people who still do not have decent shelter. In the past eight years of democracy in South Africa, the government has provided 1,4 million homes to the poor with secure tenure. 400 000 old municipal homes have been transferred to the families that have been renting them for more than 30 years without appreciation of value. A total of R20, 3 billion has been spent on new houses, while the value of the old municipal houses already transferred is estimated at R32 billion. In total, R52 billion worth of assets have been passed over to the poor to provide them with a foundation for the future.

As Mthembi-Mahanyele puts it, the grant from the United States comes at an opportune moment as government is trying to enhance the quality of the houses that are built through its subsidy programme. Earlier this year, the government increased the subsidy by up to 57% and set a minimum figure of R2479-00 as money to be contributed by the beneficiaries themselves as part of improving the quality of houses that are built by the government.

Contact: Mandla Mathebula on 012 421 1501, 083 304 1536

Issued by Ministry of Housing

8 December 2002

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