NHE defies N$500 000 govt price cap

07 June 2018 | Government

The National Housing Enterprise (NHE) has defied a verbal ministerial directive, given by former housing minister Sophia Shaningwa and reiterated by her successor Peya Mushelenga, that its houses should cost less than N$500 000.

In January during a groundbreaking ceremony for 200 houses being constructed by NHE at Oshakati, Shaningwa, who has since taken up her Swapo secretary-general post, publically intimated to NHE that its houses should not cost more than N$500 000.

In April, at a groundbreaking ceremony at Okahao in Omusati, Mushelenga reiterated this, saying the cost of NHE houses should not exceed that amount.

However, this week during a media briefing at Ekuku in Oshakati, where the 200 houses are being constructed, NHE spokesperson Eric Libongani told journalists that some of the houses under construction will cost as much as N$625 000.

He said further NHE is not only limited to constructing houses for low and middle-income earners, but that it could also cater for high-income earners.

When contacted for comment, Mushelenga said the directive was clear and NHE should partner with contractors who are willing and able to build houses for less than N$500 000.

“That is not what we have asked them to do. If there are companies that were given instructions to build houses above N$500 000, that is against the directive of the ministry.”

We would like to be informed where those houses are and why they are above N$500 000,” Mushelenga said.

“If a developer cannot build a house within the region of N$500 000, they should look for other developers. There are so many other developers that can build at cheaper prices.”

When asked about the directive, Libongani said it was impractical, in the sense that the money to construct is being borrowed, and NHE and the developer will need to recoup their funds. Therefore the directive is not good for business.

He added if it was government money being used to construct the houses, it would not be a problem for NHE comply with the directive.

“How practical is that if the money is being borrowed? If government was giving us money, maybe then,” Libongani said.

He said when Mushelenga made the remark about the directive in Okahao, it was the first time he had heard about it and he has never seen a document to that effect.

Libongani directed further questions to NHE CEO Gisbertus Mukulu.

Mukulu told Namibian Sun there was just a verbal directive given by Mushelenga and consultations still need to take place, adding it is not applicable to the public-private partnership in Oshakati.

“I think that one was just a verbal directive, so to say. I think they are yet to communicate to us. I don't think it is applicable to the PPP project, because this is private money and they use their money for the cost of capital and they need to recoup their investment.”

On the issue of finding other developers that can construct houses for less than N$500 000, Mukulu said it depends on the type of the houses being built.

“Of course if you look at our project, we do have houses that are under N$500 000, but if the house is bigger it will also attract more costs,” Mukulu said.

When asked why they have not informed Mushelenga it is impractical to limit the price to N$500 000, Mukulu said they are waiting for the right moment.

“When a correct platform is made available, we will be able to appraise the minister on what factors are at play in terms of determining the prices.”

NHE's core business is providing for the housing needs of low and middle-income inhabitants, as well as financing housing for them.


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