WINDHOEK municipality councillors have blasted the urban development ministry for allocating a N$58 million plot to a private company, warning that adding a middleman in the process could inflate the costs of houses.
The land in question is a portion of Otjomuise Extension 10 which was allocated to a company called Calgrokuumba – a joint venture between a South African firm – Calgro M3 and Afrikuumba – owned by local businessman Titus Nakuumba.
Nakuumba has developed a reputation of getting lucrative deals from the state.
The land was initially given to the urban and rural development ministry by council for the low-cost mass housing initiative.
The mass housing project was launched in 2013 by president Hifikepunye Pohamba to address Namibia’s housing crisis.
At its inception, the government promised to build 148 000 houses countrywide through the scheme by 2030.
The ministry partnered with Calgrokuumba in 2013 to build the Otjomuise mass houses through a public-private partnership (PPP) worth N$350 million.
Calgrokuumba was supposed to construct over 1 100 houses, on 150 square metre erven each, during the first two phases of the project.
According to council agenda documents submitted at last week’s meeting, Calgrokuumba have only managed to construct 360 housing units during phase 1A of the project.
The company then applied to council in 2018 to buy phases 1B and 1C of the same land for about N$70 million containing 47 general residential erven.
The initial price as per council’s valuation was N$90 million, but it was renegotiated between the council, the ministry and the developer to N$58 million.
Calgrokuumba wants to construct about 4 000 houses at the Otjomuise plot over six years.
Although the transaction was approved by the council last week, some councillors had strong reservations that the houses to be built under this project could be unaffordable.
Councillors were only given two options at Thursday’s meeting.
The first option, according to documents, was a proposal to outrightly sell the land to Calgrokuumba so that the company could use it as collateral for loans.
The municipality stated that this option, although supported by the ministry, would have a negative impact on the eventual prices of the housing units due to interest on the development loans.
The second option was that the company gets the land and pays the N$58 million in six years, but could not use the land as collateral.
This option will also make the houses unaffordable if the company takes over the responsibility of transferring the ownership of the land to buyers, the document stated.
Swapo councillor Ian Subasubani raised red flags over the transaction during the meeting.
He said the approval of the deal meant that the municipality only cared about making a “quick buck”, and not the welfare of the residents who would be affected by the high prices of the houses.
“My suspicion is that the reason we went for the first option is because we want to get a quick buck. The first option, for me, is a no-go area,” he stated.
Swapo councillor Fransina Kahungu also expressed disappointment that the municipality was approving a deal which only favoured the developer.
She alleged that the agreement between the urban development ministry and the private company was an inside job that was done to benefit Calgrokuumba.
“The ministry knows what it did when they came up with this agreement. Follow very well, the people who were working for the ministry, where are they now? It was an in-house something which was done to suit whoever it was meant to suit. There is nothing much which we can do here,” she said.
She was apparently referring to former National Housing Enterprise (NHE)’s property manager Uazuva Kaumbi, who joined Afrikuumba in 2017 as a business developer.
Popular Democratic Movement councillor Ignatius Semba suggested that the deal be sent back to the council’s management committee for further discussions.
Windhoek municipality chief executive Robert Kahimise opposed the proposal to delay the approval, implying that the municipality and the urban development ministry were being held hostage by the company.
“Unfortunately, the way the contract between the company and the ministry was structured is in such a way that it will also affect the buyers. It is not a normal land transaction that we would want to approve following the rules.
“We are confined to an agreement which we were not party to, but our central government is. Unfortunately, the item cannot be deferred, the ministry is already in default as we are sitting here. If this resolution goes out, Afrikuumba will take the ministry to court, and we go in circles again. There is not much, according to that agreement, that we can do,” he stated.
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