Kisumu and Mombasa counties owe the National Housing Corporation Sh900 million that was advanced to defunct local authorities as loans for building in rural areas.
“We have been in negotiations with various municipal, town and county councils. We have started talks with county governments aimed at recovering balances defunct local authorities owe us in loans borrowed to develop housing units,” NHC managing director Wachira Njuguna said.
Kisumu owes Sh600 million while Mombasa owes the firm Sh300 million. The corporation is pursuing local authorities to recover Sh1 billion.
Mr Njuguna told the Public Investment Committee (PIC) that the corporation built houses for local authorities under the rural housing loans scheme but they defaulted on repayment.
“We have entered into debt swap agreements where we have taken over some of the properties in exchange of the debts,” he said on Thursday. NHC is funded by the government.
PIC is scrutinising NHC books of accounts from 2001 to 2010 financial years after the Auditor General raised queries on its investment portfolios.
Mr Njuguna said the corporation has recovered a number of housing estates including Makadara Estate in Nairobi built through its funding and is negotiating to repossess others.
“Kisumu has accepted to release Arina Housing estate to us. We will come up with more high value estates instead of selling it to owners who are unable to pay rent,” Mr Njuguna said.
Nominated MP Oburu Oginga said tenants are capable of buying the units. “I can’t assure you that you will be able to evict tenants,” he said.
Mr Njuguna said the firm would give priority to the occupants when selling the houses after the takeover. More houses would be developed on idle land in the estate.
He said they will also recover Makande Estate in Mombasa now valued at Sh350 million. The excess payments will be refunded to the counties once the deal goes through. One of the hiccups to these swaps is land grabbing where several court injunctions had been issued, he said.
NHC has taken over property in Sabaki in Malindi and recovered others in Nandi, Thika, Kiambu, Nakuru, Eldoret and Narok towns.
Thomas Mwadegu (MP, Wundanyi) faulted the arrangement where local authorities collect rent on behalf of NHC without remitting the proceeds promptly. Mr Njuguna said NHC would work with counties to construct houses across the country.