Why major real estate projects have collapsed in Tanzania
- The ambitious Kigamboni City project in Dar es Salaam is cited as among the failed initiatives, draining billions of the taxpayers’ money.
Arusha. Failure to fully involve experts in key decisions on major real estate development projects has led to their collapse, it emerged here yesterday.
The ambitious Kigamboni City project in Dar es Salaam is cited as among the failed initiatives, draining billions of the taxpayers’ money.
“If the advice of the experts had been sought, we could have avoided that embarrassment,” said Mr Gerson Marisa, a real estate valuer.
He said the multi-billion-shilling project has now been reduced to a shell of itself instead of the desired state-of-art city.
He added that cases of mega housing projects which could not take off or recoup the investment funds were on the rise across the country.
“For Kigamboni, had the valuers been involved the situation is not likely to be as it is today,” he told The Citizen at a meeting of real estate professionals.
The ambitious Kigamboni City Project was mulled in the late 2000s by the government and was aimed to transform the peri-urban Dar suburb.
Under it, modern residential houses and other properties were to be put up and later rented out or sold for them to be managed as commercial entities.
However, the government abandoned it in 2016 after realizing it was no longer viable. An autonomous agency to manage the project.
“Often some leaders talk of solving the land/estate crisis without involving the experts,”he told a meeting convened by the Association of Real Estate Professionals of Tanzania (Arepta).
The professionals include valuers,real estate finance and investment analysts, land administrators and property and facilities managers.
Dr Maulidi Banyani, Arepta president and director general of the National Housing Corporation (NHC) said real estate development must be tied to investment requirements.
“To invest in property, land has to be valued first. In turn this has to be tied to the financing aspect,” he said, noting that this has been generally lacking. He added that until very recently real estate finance was not even in the government structure, putting the sector at the hands of speculators.
According to Dr Banyani, there were a significant number of trained people in real estate who could not secure employment.
He said the association (Arepta) has forwarded a raft of challenges facing its professionals to the government and that it was waiting for a positive response.
Opening the meeting, the permanent secretary at the State House Dr Kusiluka Mpogole challenged the property managers to grab the opportunities due to the fast growth of Dodoma.
He said there was a high demand for residential houses, commercial properties, office blocks and other structures in the new capital.
“The population in Dodoma is growing. There are many opportunities. You can also advise us on how to manage the new capital,” he said.