Addressing the Launch of National Home Builders Registration Council's Customer-Centric Business Strategy | Western Cape Government


Addressing the Launch of National Home Builders Registration Council's Customer-Centric Business Strategy

3 November 2010

Programme Director, Mr Bobby Brown
Chairperson of the NHBRC Council, Ms Granny Seape
NHBRC CEO, Mr Sipho Mashinini
Executive Director, Dr Jeffrey Mahachi
My HOD, Mr Mbulelo Tshangana
Ladies and Gentlemen:

Thank you for the opportunity to address you at this launch of the NHBRC's new customer-centric business strategy.

I think that it is most fitting, that you launch your strategy in this province. I am not sure if you are all aware of this, but the very first subsidised housing project to be NHBRC-enrolled in the country was here in the Western Cape. On 6 August 2004, a project of seven hundred (700) houses in Caledon-Myddelton (Theewaterskloof municipality) was enrolled. Units from this project also received the first individual Home Enrolment in South Africa.

Since then, the Western Cape has been the leading province with regard to NHBRC home enrolments of subsidised houses. To date, we have enrolled ninety-four (94) projects comprising forty-three thousand, five hundred and thirty-eight (43 538) units. The Western Cape Department of Human Settlements, is itself, a registered Developer with the NHBRC, and all municipalities in the province are either currently registered, or have in the past been registered, as Developers.

There is a healthy relationship between the provincial Department of Human Settlements and the NHBRC, and we have a long-standing service level agreement (since 2003) in terms of which we pay the project and home enrolment fees for all projects funded by us from the housing grant.

All contractors that are appointed to construct houses on NHBRC-enrolled projects need to be registered with the NHBRC. Developers of these projects, which could be the province, municipalities or their implementing agents, also have to be registered.

This means that the NHBRC monitors all of these projects for compliance and issues certificates of completion for houses that meet the standards, and non-compliances in respect of substandard work. Failure to rectify non-compliances can lead to de-registration of the contractors and/or developers.

The NHBRC plays a very important role in housing delivery, and the department is fairly happy with the service it provides. Of course, there is always room for improvement, and I believe this new strategy suggests that the NHBRC is striving for that improvement.

While the NHBRC serves a much broader market than the beneficiaries of subsidised housing alone, the latter account for a significant percentage of your customers. And, of course, they are a particular focus of mine, and of my department. I am sure that they will benefit, along with the rest of your customers in the mortgaged housing market, from this new strategy.

I think I can say without any fear of contradiction that the quality of subsidised home building in the Western Cape has improved significantly since the NHBRC came on board in 2003; and, through this process of monitoring and certification, a high standard of building has been consistently maintained since the NHBRC started their enrolments.

The majority of complaints on the quality of houses that are received by the department are in respect of houses built prior to the NHBRC becoming involved or on the People's Housing Process (PHP) programme, which is currently excluded from NHBRC enrolment.

It is to this programme I would like to turn now. I said earlier that the Western Cape has led the way with regard to project and home enrolments since the NHBRC's Warranty Scheme was extended to subsidy-financed houses, and I would like us to continue to lead the way when it comes to bringing new home owners that are currently excluded from the NHBRC's protection into your customer base.

I am aware that this matter is being addressed between the NHBRC and the National Department of Human Settlements, and that the NHBRC has a responsibility to manage its own risks, but I have a particular interest in seeing some progress in this matter.

I am seized with this because we have set ourselves the target of increasing the proportion of subsidised houses built under the PHP programme. By 2014/15, we would like fifty (50%) percent of all houses financed through our housing grant built under the PHP programme. The reason for this is that the greater involvement of beneficiaries in the design selection and construction of their homes leads to a greater sense of ownership among those new home owners. And as a result, owners of PHP-built homes tend to have more appreciation for the value of the assets they have acquired and take more responsibility for maintaining and improving the value of those assets.

But the variable quality of housing delivered under the PHP programme is a concern. That is why we would like to partner with the NHBRC and other stakeholders to improve that quality, and achieve the same consistency we have achieved under other programmes.

There is no quick fix, and I understand that enrolling these projects and houses would simply shift the risks associated with the project from the beneficiaries - who turn to the government for assistance - to the NHBRC. It wouldn't actually address the problem.

But I think we should state as our goal that we would like to get to the point where we treat PHP projects like any other, where they are subject to project and home enrolment. Then we need to work out what we need to do to get to that point, and how long it is going to take.

My department has already begun a process to improve the management of this sector and weed out the substandard quality. We are starting by addressing the institutional and resource weaknesses in the department. In this regard, we have already advertised twelve (12) vacant positions (most newly created) in the PHP directorate.

These new posts will help us implement a new Project Management Team approach, which will provide hands-on management in both a technical and administrative capacity to assist and support Housing Support Organisations to perform their roles and responsibilities.

But it is our new approach to the appointment of contractors and suppliers to PHP groups that should reassure the NHBRC that we are doing our part to improve the quality and consistency of PHP-built houses.

Firstly, we are no longer leaving the appointment of contractors to support organisations alone. They will still be involved in the selection, but the department will appoint them and hold them accountable. In addition, the track records of the suppliers will also be verified by the department's works inspectors and engineers to ensure that PHP groups make informed choices with respect to quality of work and progress time frames.

We have also created an internal database of PHP suppliers, and you will need to be registered in our database to be considered for contracts. We can then institute a process to suspend suppliers from our database if they deliver substandard houses.

The next step towards our goal, I believe, is to get all PHP contractors registered with the NHBRC. We must also acknowledge that many emerging contractors are working in this PHP sector, and we have a responsibility - as the government and the NHBRC - to assist emerging contractors to develop their knowledge, skills and capacity to take on larger projects. Assisting them to pass the NHBRC entrance exam and register with your organisation, I would argue, is a good place to start.

Then we can look at what steps we need to put in place thereafter, to get to the stage where the NHBRC is comfortable with enrolling our PHP projects and homes. Perhaps these steps might include the monitoring of a sample of PHP projects and homes before ramping up to the requirement of full enrolment, monitoring and compliance certification.

But that is something that can be worked out between our professional teams, along with how much time is needed. The point is that we need to set ourselves this goal, and develop a plan to achieve it, and I would like the Western Cape to be the Province in which we pilot this plan, and then vigorously drive its rollout.

Let's make sure that no new home owner is excluded from the peace of mind that comes with having their home enrolled with the NHBRC, the warranty that accompanies that, and the new customer centric approach that will ensure that their needs are met.

Thank you.

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