Kenya inhospitable to housing investors

July 13, 2010
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, NAIROBI, Kenya, Jul 13 – Kenya has lost a number of real estate investors to Rwanda and Uganda due to its stringent procurement law which discourages potential developers, Housing Minister Soita Shitanda said on Tuesday.

Mr Shitanda said the long and tedious processes involved in the procurement should be adjusted arguing that in Rwanda it takes two weeks for an international developer to get the required paper work.

“I can remember we had an American company that wanted to develop houses on a partnership basis. They were ready to invest Sh16 billion to develop about 2,000 houses but because of the bureaucracies involved, they went away,” he said.

The Minister asked the Treasury to provide incentives to investors as other East African countries did. “I know of two Chinese companies who have relocated to Rwanda where the government is very friendly and it even gives out land,” he said.

The Housing Minister was speaking when he oversaw the signing of a Sh12 billion partnership between the National Housing Corporation (NHC) and a private company – Sahal Construction Company for putting up 4,500 housing units on 72 acres of land in Mavoko municipality.

NHC Managing Director James Ruitha commended the partnership saying it would help the housing corporation raise revenue as well as help the government meet the country’s housing needs.

He said the housing corporation would only provide consultancy services to Sahal to ensure that it conformed to all building regulations.

“Partnerships can take various forms one of which we are using with Sahal where a developer has the land and funding but he or she would like us to bring on board our experiences, skills, marketing and ability to deliver houses into a project,” he said.

Sahal limited Director Abdullahi Maalim who said the project would kick off in August added that a two bed-roomed flat once complete would go for Sh2.75 million while a three bed-roomed one would go for Sh3.45 million.

“We have funding for the project and we had decided to take the project up in phases of 500 units,” he explained.

The Housing Minister also said that the government was ready to embark on its massive re-development project aimed at revitalising houses in Nairobi’s Eastlands.

He said the projects which are currently awaiting approval by the Cabinet would help address the biting housing shortage in urban areas.

“The project will be targeting Shauri Moyo, Kaloleni and Starehe estates and we will use American company Lemna International to provide 315 temporary decanting units for the evictees,” he explained.

He further said that the government would turn over some of its land to the housing corporation to fast track the reconstruction process which could be slowed down by the procurement law.

“Where we are being bogged down by the procurement law we are asking NHC to step in and utilise that land through partnerships to do housing on behalf of the government,” he said.

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