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City Hall clears massive debt to NHC

NAIROBI, Kenya, Mar 4 – Tenants of National Housing Corporation (NHC) houses in Huruma, Kariobangi, Buruburu and Jamhuri estates will from the end of March pay their rent directly to the Nairobi City Council.

The development comes after City Hall cleared an outstanding debt of Sh1.3 billion owed to NHC.

Corporation chairman Bosire Ogero on Wednesday also presented a cheque of Sh181 million to the Council as a refund for excess rent collected on behalf of the Council.
Mr Ogero said that the sale of Madaraka flats and the value of the undeveloped land within the estate went a long way in clearing the entire debt owed by the Council.

“We have a fully fledged department of estate management and we have developed very good relations with the tenants in these estates,” he said, adding that they had been very cooperative.

Speaking at the same time, Nairobi Mayor Geoffrey Majiwa said that reverting of the estates to City Hall will improve their revenue collection.

“The Council will improve its revenue collection by over Sh10 million a month, because this is what we collect from the estates that you are holding,” Mr Majiwa stated.

“Our tenants in the city now will sleep in peace because in previous times, our tenants have not known who their landlords are,” he added.

The NHC took over the management of Madaraka and Kariokor estates in 1992, a move that was vehemently opposed by the City Council of Nairobi and contested in court.

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In 1998 however, the court ruled in favour of the Housing Corporation.

Given the fact that the City Council at the time owed the Corporation a substantial amount of money, the amount of rent receivable from the two estates was not even enough to meet the annual repayments and accrued interest.

It is as a result of this that the Corporation took over the management of more estates in January 2004, namely; Huruma, Kariobangi, Buruburu flats and maisonettes and the Jamhuri flats.

On the sale of Madaraka estate, the standoff between NHC and the Council over the sale necessitated the intervention of both the Ministries of Housing and Local Government.

The Ministers then constituted a technical committee on February 8, 2006 to work on the details and framework for the disposal of Madaraka estate.

The committee prepared a report, which was presented to the Ministers in a meeting, where the sale of two-bed roomed flats was agreed at Sh1.6 million while that of a three-bedroom flat was put at Sh2.1 million.

The sale process began on May 10, 2006 and was to be completed in August of the same year.

The NHC chairman said on Wednesday that during the sale process, the Corporation continued to collect rent and deposited the proceeds to the Nairobi City Council loan account.

He stressed the need for positive engagement between the NHC and City Hall with regard to urban renewal and housing provision in low income residential neighbourhoods.

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