An NHC building at Moroccom in Dar es Salaam PHOTO | FILE
Dar es Salaam. Construction activities for the Morocco Square Commercial Tower which was held up since 2017 for lack of funding has resumed, and the job is now expected to be completed on or before October this year.
The owners and builders of the Sh137 billion project located near Victoria Place in Dar es Salaam, the National Housing Corporation (NHC), has just acquired Sh15 billion as credit from the government – with another Sh10 billion expected as loans from some commercial banks.
Part of the money will also go into reviving construction of the Sh105.1 billion Kawe 711 residential project on Kawe Beach along the Indian Ocean coastline.
The Kawe Beach houses are being constructed under the Seven Eleven Residences (711-1) and the Golden Premier Residences (711-2) projects on plot 711 in the Kawe area of the Kinondoni District in Dar es Salaam Region.
Construction of an NHC building is in progress at Kawe in Dar es Salaam PHOTO | FILE
Both the Morocco Square and Kawe Beach housing projects will cost Sh242 billion in all.
The former is a high-rise building of 17 floors with residential apartments and commercial spaces.
Reports have it that in 2018, the minister for Lands, Housing and Human Settlement Development of the day dissolved the-then NHC board of directors, and suspended the employment contract of the then Corporation’s Director General, Nehemia Mchechu.
That came after the late President John Magufuli had earlier noted with concern that there was poor financial management and discordance among the NHC board members and the management.
However, the current NHC Director General, Dr Maulid Banyani, told The Citizen that after a somewhat long delay, the government has finally loaned Sh15 billion to the corporation to enable it to continue with construction of the Morocco Square project.
“We ordered the contractor back on site – and the first thing he did was to order building equipment that is not available in the country. This is expected to arrive in the country within two months to enable resumption of the construction activities,” he said.
“We had a shortfall of Sh37 billion. But the government – acting through the ministry of Finance – authorised us to borrow a total of Sh10 billion from commercial banks that will be used to complete the construction and related works,” he said.
“We have already sent our requests to the banks, some of which have shown interest to service our requests for loans,” he revealed – adding that the required balance of Sh12 billion to complete the job will be accessed through the Corporation’s internal revenues.
“If all goes well, we expect to complete the project by a 100 percent by October this year,” he said.
Regarding the Kawe Beach Project for 350 residential apartments and business spaces, Dr Banyani said the project had been completed by 37 percent – with a total of Sh82 billion still required to complete the job toperfection.
To that end, he revealed, NHC has sought clearance from the Finance ministry to borrow from creditors in efforts to continue with the construction to the finish.
Contractors’ costs
Dr Banyani further said that he was not aware of how much the contractor owes them as a result of their machinery remaining idle on site when the project was put on hold.
“When we are ready to go back on site, we will negotiate with them to reduce the costs,” he said.
Debts
He also stated that, while the two major Morocco and Kawe projects were on hold, they were nonetheless continuing to repaying previous loans as a matter of course.
During that period, NHC had a total of 17 projects, including the two major ones at Morocco and Kawe.
Some of the completed projects were either sold or rented out to tenants, he revealed.
“That was how we were able to continue repaying the loans that we owed for the two major projects. This way, we built a trustful relationship with the banks because we were able to repay a bigger part of the loans,” he said – although he did not have the figures ready to hand.
Way forward
According to Dr Banyani, the real estate market in Tanzania is volatile – and, because of this, their fallback plan was that if and when the two buildings at Morocco and Kawe were completed and they didn’t get a buyer for them, then the corporation would opt to rent them out.
“Regarding the loans which we took in the past, learnt the lesson that we don’t take loans for balance sheets. We will be specific going forward. We will first do a feasibility study on any project financing we undertake henceforth, taking loans for a specific project – and the money would not be utilised in other projects,” he said.
Commenting on the matter, the deputy minister for Lands, Housing and Human Settlements Development, Angelina Mabula, confirmed to The Citizen that the government had issued a loan for continued construction of the Morocco Square and Kawe Beach housing projects.
“We had a dialogue with them (NHC), and understood the challenges they are facing – and we are working on a solution which would ensure that the projects are completed. With regard to any other issues dealing with construction, please talk to the DG (Director General),” she said.
When The Citizen contacted the Watumishi Housing Company (WHC), CEO, Fred Msemwa, he said they “have no pending projects scattered countrywide.
“Our projects are low-cost, and when we start them, we aim to finish them as planned. All of our construction projects have already been completed and either sold or leased out. If at all there are completed projects which have not been leased out or sold, they must be very, very few, indeed” he categorically said.
We were still waiting for a response to our enquiry to the National Social Security Fund (NSSF) when we went to Press.
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