Mass housing a rip off

27 February 2014 Author  

front Namoloh 28 febTHE Minister of Regional Local Government and Housing Charles Namoloh has expressed dissatisfaction with the over-pricing of houses by construction companies that won tenders to build low-cost housing around the country. In an interview on Tuesday, Namoloh highlighted the exorbitant amounts companies were charging per square metre for the houses and for servicing land, under the mass housing programme. “Some companies are charging up to N$75,000 to service land of 40m2, which is very high, and these are the kinds of things that we need to address immediately,” Namoloh said.

Earlier media reports alleged that the National Housing Enterprise (NHE) had allowed certain construction companies to get away with murder, by almost doubling the normal price of construction per square metre for low-cost housing.

Government appointed the NHE as the implementing agency for the Mass Housing Initiative.

“It is very important that the cost of construction of these houses is not inflated to keep the actual price of the houses as low as possible,” Namoloh stated.

Apart from the attempt to rake in tens of billions of Namibian dollars from these projects, allegations of close ties between decision makers at NHE and within Government and the successful bidders continue to surface.

These include alleged links between NHE Chief Executive Officer Vinson Hailulu and Afrikuumba Construction.

Afrikuumba Construction’s executive director Titus Naakumba is allegedly a cousin to Hailulu’s wife and has formed a partnership with South African company Calgro M3 for the construction of the houses.

The NHE awarded the company a tender to build 1,191 houses at Otjomuise in Windhoek for about N$350 million.

In a brief interview on Thursday Naakumba dismissed the accusation that companies such as his were overcharging the NHE, and stated that it all boiled down to the specifications of the house.

“NHE determines the specifications that the houses should have, and that in turn determines what we charge per square metre. We also have six quantity surveyors who work on determining accurate pricing for our construction,” he said.

He highlighted that his company was a member of the Construction Federation of Namibia, which meant it had to uphold the standards of the federation and abide by ethics in their pricing.

When asked why he would charge a significantly larger amount per square metre to build the low-cost housing compared to what a company like Kavango Block Brick would charge, Naakumba spoke of value for money.

“Kavango Block Brick has a rather unconventional way of building which in my opinion is not very popular among the Namibian people. However, it can result in a reduced cost of construction,” Naakumba conceded.

He then questioned why Namibian construction companies were on the chopping block, whilst people allowed the Chinese Construction companies to do as they pleased.

“People say it’s because they can source funding, well so can I. I can also source funding locally and there is nothing special about the Chinese except the treatment we accord them,” he added.

When asked about the conflict of interest because of his family ties to Hailulu’s wife, Naakumba explained that they were not even blood relations because their mothers were stepsisters.

“I mean seriously, this means we will never be able to do business in our own country. I did not influence the system in any way,” he concluded.

Approached for comment this week regarding the alleged over-pricing of the houses, founder of Kavango Block Brick building system Heinrich Schroeder says he was shocked to see what companies were charging.

“Who are these houses being built for exactly? When you hear people are charging N$5,000 per square meter that is ridiculous,” Schroeder said.

In his view, low-cost housing in Namibia should cost no more than N$3000 per square metre.

He felt that Government would only make things more difficult for itself if it did not challenge these prices because in the end it would have to subsidise the houses heavily.

“If these houses are supposed to be built for those under the breadline, to what length will Government have to go to make them affordable to these people?” he questioned.

“It is in the interest of Government to keep the cost of construction as low as possible in order to avoid having to plunge in with heavy subsidies,” he said.

He further stressed that there was no need to award these tenders to what he referred to as giant South African companies, when Namibians were quite cable of building these houses at cheaper costs.

“I would think that with such a huge project and large sums of money involved Government would want to shop around and find the most affordable way to roll out its plan. Now it just looks as though it has money to splash around,” he said.

Schroeder further remarked that he had been preaching that Government should introduce a Housing Consumer Protection Act.

Such legislation would safeguard house-buyers, regulate pricing, allow quality control over materials and labour, and in this way, Government would also be at peace in the end.

“The CEOs should take a backseat here and let the managers who have the expertise in the field take the lead,” he said.

Namoloh said that people had exaggerated some things and that he saw no real issues when asked if he was satisfied with the tendering process given the alleged conflicts of interests. One of the questions put to the housing minister was why Government decided to make use of NHE’s own tendering process instead of the National Tender Board.

He replied that one of the main reasons was the time factor.

“Using the company’s tender process is much quicker to start with and we wanted to be able to roll out the programme with minimal delays.

“Besides we have also used it in the past without problems, for example, with the local authorities,” Namoloh explained.
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