Dar es Salaam. The dream to turn Kawe beach in Dar es Salaam into a modern satellite city has hit a snag, The Citizen can report.
The National Housing Corporation which is constructing Sh473 billion worth of real estate in the area has run out of funds, leading to the stalling of the project, sources privy to the mega project have confided.
The project, including construction of eight high rise buildings, each with up to 18 storeys called Kawe 711, shopping malls and other amenities, has stalled for a year now as NHC grapples with securing a Sh232 billion credit line.
NHC management was banking on the government to guarantee it to borrow the Sh232 billion to continue construction and avoid possible and costly litigation issues should contractors and suppliers lose patience.
“The corporation is awaiting treasury approval to borrow the amount from commercial banks but the fear is that the process was taking too long and project partners were getting impatient,” said one of the sources who requested for anonymity due to the sensitivity of the matter.
According to the sources, NHC was also suffering the consequence of not having a board of directors in place to help the management push its agenda with the government. The last board was dissolved following an ongoing investigation that saw the removal of NHC’s then high flying CEO Nehemiah Mchechu.
Reached for comment last week, neither the NHC management, Lands and Housing minister William Lukuvi nor Treasury registrar Athumani Mbutukka were ready to comment on the status of the stalled project.
Mr Lukuvi referred all the questions put to him by The Citizen to the NHC boss. On the delay to name the new board of directors, Mr Lukuvi said the government will name one at its own convenience. “I am the minister in charge and will decide when that is convenient,” he stressed.
Mr Mbutukka also declined to comment when asked about the crerdit guarantee from treasury. He said the NHC management should be consulted.
“This issues involves NHC, why am I the one being contacted to explain while the NHC have all the information?” he queried.
The stalled project is part of the grand plan by NHC to decongest Dar es Salaam city centre with a vision for modernization of the outskirts and creation of investment opportunities in real-estate.
The Kawe mega city had four projects worth a total of Sh473 billion. The include Kawe 711 residency project worth about Sh105 billion and the Golden Premium worth Sh69 billion.
A spot check revealed the construction stalled at the second storey. The site which was busy throughout the day and night has gone silent. The project was expected to be implemented in three years and completed by 2019.
In total, the Kawe mega city would involve over 500 buildings in an envisioned investment worth $2.2 billion (about Sh4.9trillion) in a 12-year public-private partnership venture.
Contacted, NHC director general asked that our questions be put forward through their communications office. However the corporate public affairs manager, Yahaya Charaani told The Citizen later that the management was not in a position to comment on the matter at the moment.
Reports show that NHC entered into partnership agreement with 16 banks that provide loans to it as well as to house buyers on a long-term basis.
The banks include Azania Bank, Bank of Africa, CRDB Bank, Exim Bank, KCB Bank, NBC Bank, DCB Bank, Commercial Bank of Africa, NMB, Banc ABC, NIC, Stanbic, First National Bank (FNB), International Commercial Bank (ICB) and Diamond Trust Bank (DTB).