NHC property: The housing corporation plans to build at least 2,350 new houses annually to help meet Kenya’s huge housing deficit. FILE
What you need to know:
NHC, in one of its largest expenditures, will pay Sh790 million for the 9.87 acres of land from Bangla Trading Co. to construct a high-rise housing complex.
The land purchase is subject to clearing hurdles including a charge on the property and high-voltage cables sitting on the land.
The National Housing Corporation (NHC) plans to buy a multi-million shilling land in Imara Daima, Nairobi and an enterprise resource planning system in deals valued at about Sh1 billion.
NHC, in one of its largest expenditures, will pay Sh790 million for the 9.87 acres of land from Bangla Trading Co. to construct a high-rise housing complex, if board members approve the purchase.
However, the land purchase is subject to clearing hurdles including a charge on the property and high-voltage cables sitting on the land. There has also been varying valuations of the land.
Valuers contracted by NHC in May assessed the plot to be worth Sh493.5 million while government put the value of the Imara Daima land at Sh730 million.
“We value the unexpired leasehold interest free from any encumbrances and as at today’s date at Sh493,500,000,” said the two valuers, SW Maina and GM Muange in a report dated May 15, 2013.
However, the NHC tender committee resolved to use the government report.
“The committee was informed that such variances are normal so long as each valuer could substantiate valuation figures,” said the tender committee.
The committee was later reconstituted and ordered to hand in its report on July 16, 2013 via a letter by managing director Wachira Njuguna who could not be reached as his office said he was on leave.
The team went with the evaluation committee’s negotiated price of Sh790 million—down from the Bangal tendered price of Sh800 million.
Bangal Trading was until last May 2 called Bangal Import Export Company Ltd and its directors are listed as Omar Sharif Mohamed and Farhiya Mahat Kuno.
The charge on the land according to documents seen by Business Daily at the time of negotiations included a Sh340 million charge at Diamond Trust Bank used as collateral for a loan dating back to October 28, 2010.
But NHC tender committee in its report said that the amount has since fallen to Sh42 million as of June although the seller last month put the balance at half the amount. There were also unpaid land rates amounting to Sh196 million by April and outstanding rental lease of Sh1.7 million.
Apart from the high-voltage cables sitting on an unsurveyed wayleave which the seller is supposed to move, the report cautions the parastatal to make sure the unclear border—partly due to suspected encroachment and missing beacons—is sorted out as “resolving issues revolving around boundary disputes have been known to be protracted.”
The seller later provided a beacon certificate and has promised to get Kenya Power to sort out the power lines.
The report by the committee, however, said the site was proper for property development owing to its prime location.
Another local company, Greyston Construction, has been involved in a court dispute over the property with Microtech Accessories, but the seller provided NHC with court documents showing the case involving other parties has been resolved.
Contacted for comment, a top NHC official said the land purchase had been sanctioned by the corporation’s tender committee but could not discuss details.
“I’m not aware of any issue regarding the deal,” said Rosebella Lang’at, NHC general manager in charge of business development. The State-owned Corporation is no stranger to land issues and is locked in multiple property disputes involving its vast pieces of land and housing schemes which have been grabbed.
NHC plans to build at least 2,350 new houses annually to help meet Kenya’s huge housing deficit.
