THUBELISHA HOMES CLOSURE

REPORT

Presented to the Portfolio Committee on

8 July 2009

Thubelisha’s Closure Plan prepared in Sept 08.

Approved by the Minister of Housing on 15 Dec 08

Delay in approval resulted in:•Revised closure timeframe•Updated closure cost estimates

Updated Closure Plan submitted to NDoH on 28 Jan 2009

Steering Committee request for commitment from NDoH to fund closure costs received on 3 March 2009

Implementation of closure process commenced on 9 March 2009 with a guarantee of closure costs by NDoH

Background

The Closure Steering Committee established the following Task Teams:

• Human Resources

• Projects

• Facilities & Assets

• Finance & Accounting

Closure Task Teams

The following processes have been completed: • H D A confirmed all staff in WC offered positions

• Firm undertaking from North West Province to absorb 5 staff; 2 still to be redeployed • Northern Cape Province will absorb 2 staff; 1 staff being offered a position by the H D A • Voluntary severance package taken up by 30 staff

• Staff where no commitments have yet been made (40): (See table attached)

Human Resources Task Team …

Human Resources Task Team …

Province Number of Staff

VSPs Boarded/

Died/Resig

HDA Province

Certain

Balance

Head Office

30 13 1 1 15

Gauteng 20 8 12

Eastern

Cape

1 1

Zanemvula

13 1 12 0

Western

Cape

10 2 8 0

N2 Gateway

23 1 22 0

Northern

Cape

5 2 1 2 0

North West

10 2 1 5 2

Limpopo 4 4

Kwazulu

Natal

8 1 1 6

Total 124 30 3 44 7 40

• Redeployment of staff to Gauteng & KZN is dependent on NDoH to funding these staff placements for the balance of the financial year

• Good progress made i.t.o. staff changes in provident funds and medical aid. Consultants made available to all staff

• All Stannic garage cards cancelled at the beginning of June; Nashua 3G contracts have yet to be cancelled

Human Resources Task Team … (con’t)

• Way Forward:

• Approval by NDoH regarding the payment of subventions particularly to Gauteng & KZN

• Alternate to above, commitment by NDoH to take over 40 remaining staff if not employed

• Meetings with Limpopo/KZN/Gauteng Provinces to have follow up meetings

• Finalisation of VSP, including application for tax directives

• Finalisation of offers of employment from H D A & Provinces where redeployments have been arranged

Human Resources Task Team … (con’t)

The following processes are underway / have been completed: • All rental agreements have been cancelled or agreed to be paid to lease termination. Negotiations with Nasdhua have been finalised and settlement agreed

• Negotiations with Telkom finalised; letters sent to Telkom cancelling remaining contracts; transfer of certain contracts for telephone and data lines to H D A

• All furniture for transfer to H D A from HO and Gauteng branch identified. Balance of furniture to be auctioned to staff or disposed of per Closure Plan with treasury approval

• Western & Eastern Cape assets will be transferred to the H D A with treasury approval

• Transfer of assets to N Cape and N West Provinces proposed along with transfer of staff with treasury approval

• Assets in Limpopo/KZN/E London with be dealt with at meetings with the Provinces

Facilities Task Team

• All loan contracts such as coffee and water machines cancelled from 31 July 2009

• Way Forward:

• Cancellation of Nashua 3 G cards to be formalised by no later then 31 July 2009;

• Timing of collection of unused Nashua printers to be handled by Thubelisha staff

• Thubelisha Management undertakes to facilitate auction of Head Office and Gauteng Offices assets

Facilities Task Team ….(Cont)

Way Forward:

• Response from Thubelisha regarding status of projects in EC/WC/Mpumulanga/Limpopo

• Meetings planned as follows:Eastern Cape - 30 JuneLimpopo - 30 JuneWestern Cape - 8 JulyMpumulanga - still to be

determined

• Draft contracts i.r.o. cessions to be approved by Legal

• Notification to all creditors to be sent out by 31 July 2009 notifying them of closure of operations

• Key focus of project closure team will be financial reconciliation of all projects after discontinuation of operations on 31 July 2009

Project Task Team ….

• NHFC loan repaid• MIG debtors of approximately R60 M still not received

• VAT verification process is almost complete which will enable further negotiations with SARS regarding recovery

• Claim submitted to NDoH for first portion of Closure Cost (VSP & contract terminations). No amount received from NDoH yet

Way Forward•Bring financial records up to date

•Analyze and collect all debts

•Meet with NHFC regarding settlement of Interest of loan

•Negotiate with H D A regarding future of MIG debtors

•Progress the VAT refund

Finance & Accounting

Thank you