Minister for Lands, Housing and Human Settlements Development William Lukuvi (partly hidden, right) inspects Kibada National Housing Corporation (NHC) project at Kigamboni in Dar es Salaam recently. PHOTO|FILE
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The CAG has also queried NHC’s failure to collect Sh464 million from a number of tiny houses it sold more than two years ago.
Dar es Salaam. The latest report by the Controller and Auditor General (CAG) puts the National Housing Corporation (NHC) on the spotlight for initiating a Sh9.4 billion project without first carrying out an analysis on the need of the market it targets.
The CAG has also queried NHC’s failure to collect Sh464 million from a number of tiny houses it sold more than two years ago.
“Kibada affordable houses pilot project was undertaken without conducting a thorough and detailed market analysis,” says the CAG.
According to the CAG, the unsatisfactory project planning resulted in construction of pavements and buildings for shops, dispensaries, building pavements, and installation of street lights that were not part of the initial plan of the project.
“The decision to add non-budgeted amenities had an effect of pushing up the cost that made the project a non-profitable venture,” says the CAG.
The Kibada project has cost the public institution Sh9.4 billion, Sh2.4 billion more that the projected cost.
It has also eroded the 15 per cent of the profit the corporation could get. “Failure to conduct a detailed target market analysis may compel the corporation to incur unnecessary costs,” he says.
“This can affect the project’s profitability because prices of the houses it is constructing might not be elastic to enable the NHC to earn the expected profit,” he has insisted in the report.
The CAG has urged the NHC management to cultivate a culture of conducting a detailed market analysis before investing in any project in order to realise its goal of earning at least 20 per cent return on investment as required by NHC investment policy.
In the same vain, the CAG has questioned the failure by NHC to amass millions of shillings from tiny residential houses it has sold. “Our audit noted shortage of Sh464 million from tiny houses the corporation sold more than two years ago,” says the CAG.
“I have also noted that there is no follow up by the NHC management on the money,” he says.
