The Matlosana N12 Catalytic Project and how the low cost rentals were supposed to look like
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A flagship housing development once positioned as a cornerstone of spatial transformation in the North West has stalled, leaving partially built infrastructure, unpaid contractors and thousands of promised homes hanging in the balance.
The Matlosana N12 West Catalytic Project in Klerksdorp was intended to deliver more than 20,000 housing opportunities through an integrated settlement combining low-income housing, social housing and mixed-use development. Instead, the 504-hectare site now stands largely idle after funding streams dried up.
The development forms part of the national catalytic projects programme overseen by the Department of Human Settlements, an initiative designed to reshape apartheid spatial patterns through large integrated urban nodes.
Insiders involved in the project have alleged that funds meant for the development were redirected to other projects linked to political interests. According to information available, the project has, over the years, been subjected to several investigations that found no wrongdoing, yet progress continues to stall.
This week, the contractor confirmed that work has stopped. MXN Development director Nhlanhla Nkala said construction effectively halted after changes to the funding structure in 2023.
“The project was well within the time frames when we started and was on track to meet our deadline. Challenges started in 2023 with the change of administration within the ruling party. That changed the funding structure, where payments needed to come from the provincial government. Since then, services have not been funded. They said they would regularise the process in 2023 for the services part, and the project has been on hold since then, with no payments. We can’t carry on when subcontractors and employees are not paid.”
Nkala explained that the project initially relied on national funding for bulk services such as roads, stormwater and sewer infrastructure, which flowed through provincial and municipal channels and was ring-fenced for the development.
“Initially, the funding for services was coming from the National Government under the Department of Human Settlements for bulk services, stormwater services and roads. The money was coming from Human Settlements to the Province, gazetted, then sent to Matlosana Municipality and then ringfenced for the project. That’s why we never had challenges with the project. Since it was moved to the province, funding never came, hence the work has stopped. It was never in the Province’s business plan. Projects that are not part of the business plan are never funded,” he said.
How the 504 hector land was going to be used to accommodate all the planned structures
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Planning documents indicate the project carried an original budget of about R4.2 billion, with roughly R1.2 billion spent so far. North West Human Settlements head of department Kgomotso Mahlobo confirmed the scale of the funding gap.
“As a multiyear project, to date, bulk and internal services have been installed with 500 low-income houses currently under construction, as completion of phase 1 of middle-income houses with an original budget of R4.2 billion. To date, R1.2 billion has been spent, implying that the project is currently at 39.5%,” she said.
Mahlobo attributed delays largely to fiscal constraints.
“Limited funding, as the government has been the one funding the project, hence the delay in commencement with other typologies.”
Government responses also confirmed that transfers to the municipality were at one stage redirected to allow for auditing, while a cession agreement enabled direct payments to the developer for some construction work.
The auditing followed concerns despite the Auditor-General having already found no discrepancies in the project’s finances. In a letter dated 14 April 2023, the Auditor-General informed municipal manager Lesego Seametso that the N12 Matlosana Catalytic Project had been audited as part of the Matlosana municipality audit.
“In the audit, there were no findings identified or reported relating to funds diverted to pay for municipal salaries or the Eskom account. It appears you mistakenly referred to the N12 Matlosana Catalytic Project as the project included in the AGSA’s MINMEC presentation. I want to clarify that in the presentation to the MINMEC meeting, the comments presented by AGSA related to the Matlosana Jouberton extension 24 project and not the N12 Matlosana Catalytic project,” the letter stated.
The Auditor-General further clarified that the presentation referenced under-delivery at Jouberton Extension 24 due to funds allegedly diverted to salaries.
“This comment was based on a response to the request for information received from the Department of Human Settlements. I want to acknowledge that this comment should not have been included in the presentation without any further discussion or confirmation with the Matlosana LM leadership, as it appears to relate to something that might have happened prior to 2010.
"Please accept my sincere apology for my team’s sharing comments that posed a reputational risk with the national and provincial representatives without first reaching out to the Matlosana leadership to clarify the issues.”
Concerns about the project’s trajectory were raised as early as 2023 when North West delegates to the National Council of Provinces criticised slow progress on major housing developments.
Delegation leader Eric Landsman warned that timelines were slipping and called for a recovery plan.
“The Department of Human Settlements must provide a report with an updated timeline of when the N14 and N12 projects will be completed and hand over the houses to the affected communities, and this report should be sent to us by the 30th September 2023, and the N12 and N14 projects must be concluded by the end of January 2024,” he said.
A design of the affordable houses that are part of the Matlosana N12 Catalytic Project
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Two years later, those deadlines have passed with little visible activity on the site.
Project data shows bulk infrastructure such as water, sewer and major roads is largely complete, but internal services and housing construction remain uneven. Nkala said about 500 units are under construction but stalled due to non-payment, while additional phases have not started. Serviced stands in nearby Tigane are reportedly about 95% complete, with materials already procured but unused, raising the risk of wasteful expenditure.
“We are looking for solutions that will benefit everyone, including the province and municipality,” he said, warning prolonged delays could erode earlier investments.
Government records show Human Settlements Minister Thembi Simelane visited the project in 2025, where officials identified governance and funding challenges and resolved to revive original project structures.
“Original project structures must be resuscitated and the National Department is to provide support to the province and the municipality. This process is currently underway,” Mahlobo said.
Municipal spokesperson Ntswaki Makgetha confirmed the contractor has been off-site but noted some progress.
“Progress has been achieved on several bulk infrastructure components, civil engineering services and selected housing units. However, the project has experienced a significant slowdown, with the contractor having been off-site since March 2023 due to funding constraints,” she said.
She added that the main constraint was the halt of funding transfers from the Department of Human Settlements after the last tranche payment on 3 October 2022, which directly affected contractor activity.
“A total of R989,357,295,00 has been allocated to the municipality to date. Funds have been utilised to deliver bulk infrastructure, civil engineering services (Water, Sewer, Roads and Storm water), electrification (Matlosana Estate Ext 3, 5 & 6), in line with approved milestones and progress reports.”
Makgetha rejected claims of a fallout between the municipality and the provincial government.
“There has been no fallout between the two spheres of government regarding this project. The municipality and the provincial department continue to engage on funding and implementation matters. There has been no official communication indicating that financial control has been taken over by the provincial government. Funding and financial arrangements remain under discussion between the municipality and the department,” she said.
Officials say the national department conducts quarterly monitoring of financial and construction progress and is exploring a public-private partnership model with the National Treasury to attract private investment as conditional grants shrink.
During his State of the Province Address on Thursday, North West Premier Lazarus Mokgosi acknowledged housing pressures in distressed mining towns.
“In response to these challenges, we have committed over R500 million for the construction of 1148 housing units in Madibeng, Moses Kotane and City of Matlosana Local Municipalities, where we have also installed bulk infrastructure in more than 1800 sites. We have committed to spending eighty per cent of the budget allocated to Human Settlement to complete all blocked housing projects in the province. Progress is being registered in this regard and to date, we have spent thirty million rand for the completion of 250 housing units which were abandoned by contractors, in areas such as Lethabong, Glodina, Sekhing and Kgomotso,” he said.
The project mile stones that are supposed to be hit in the Matlosana N12 Catalytic Project
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The halt has also had social consequences. The project had been a major employer in a region hit by mining decline, creating more than 1,000 jobs with about 90% of workers drawn from nearby communities.
“The failure of payment has affected a lot of people,” Nkala said.
The development was widely promoted as a transformative project expected to modernise the municipality’s urban landscape. Its delays add pressure to households already facing rising living costs and weakened spending power.
National Debt Counsellors’ Association chairperson Benay Sager said last year that servicing property debt had become increasingly difficult, noting electricity tariffs have risen by 135% over nine years, petrol by 88% and cumulative inflation by 52%. Consumers seeking debt counselling in the first quarter of 2025 needed, on average, 69% of their take-home pay to service debt, the highest level since 2017.
The Matlosana project was conceived to integrate Klerksdorp with neighbouring townships, including Alabama, Jouberton and Roosheuwel, while delivering schools, retail space and social amenities alongside affordable housing.
Speaking at the DEVAC Infrastructure Summit in 2025, Simelane said the government was advancing legislative amendments to ensure fair access to home loans, curb discriminatory lending, prevent illegal land invasions and accelerate township development through the Human Settlements Bill.
She said the sector had gazetted 50 catalytic projects expected to yield 696 280 housing opportunities across multiple typologies, including RDP walk-ups, BNG houses, social housing, affordable rentals, community residential units and serviced sites.
Examples include Lufhereng in Johannesburg, Vista Park in Mangaung, Greater Cornubia in eThekwini, Matlosana N12 in the North West and the N2 Gateway in Cape Town.
Through these projects, the sector aims to accelerate spatial transformation aligned with the Spatial Land Use Management Act 16 of 2013, while acknowledging the scarcity of well-located land near economic opportunities.
karabo.ngoepe@inl.co.za