NHE Ordered to Suspend Scheme

THE government has instructed the National Housing Enterprise to suspend the construction of some houses under the mass housing scheme because of a lack of money and fear of more lawsuits from aggrieved tender recipients.

The construction of credit-linked houses will be put on hold until NHE has secured N$2 billion as required by government.

Urban and rural development minister Sophia Shaningwa has also set procedures on how NHE should acquire the N$2 billion to fund the project until next year.

NHE board members confirmed this directive over the weekend saying the minister had issued instructions through Jason Nandago, the chairperson of the NHE board.

The state has budgeted only N$640 million for the first phase of low cost houses that started last year and ends next year while the N$2 billion is meant for the bigger credit-linked houses.

Confidential documents obtained from the parastatal show that the government had ordered a stop on the construction of some houses to avoid lawsuits from constructors who have not been paid due to the lack of money.

NHE appears to ignore this directive, a scenario that has angered the ministry of urban and rural development, which is of the opinion that the number of houses under construction is an indication that the housing parastatal is disregarding ministerial directives.

An NHE board member said Hailulu briefed Shaningwa last month about pending legal action from contractors who are owed millions by the housing parastatal.

The project has already suffered delays with only over 1 000 houses completed out of around 10 000 units that need to be completed by next year.

Efforts to get comment from Shaningwa were not successful but she told The Namibian last week that she is working on amending the implementation of the project.

Meanwhile, Nandago has been told to finalise the process of acquiring external funding but it should be done transparently.

NHE initially wanted to get the N$2b from a Swiss bank but the ministry of finance blocked that plan suggesting that the parastatal must source money from local financial institutions.

Even though Nandago declined to comment on Saturday about the directive, sources said Shaningwa has laid down the rules which the parastatal must follow if it wants the money.

According to the rules, NHE should complete the terms of reference which should be sent out to financial institutions in order to implement the suggestions of the line ministry and finance ministry after the initial NHE proposal that was submitted to government.

Afterwards, the draft of the proposal will have to be submitted to the ministry of urban and rural development through the permanent secretary Nghidinua Daniel, for approval before it is aertised in the media.

The aertisements will call for expressions of interest from financial institutions who want to fund the mass housing project.

The financially troubled NHE made a presentation earlier this year in which it indicated plans to source funding from a Swiss bank.

Former finance minister Saara Kuugongelwa-Amadhila rejected the proposal and aised the parastatal to consider sourcing local capital to boost the local financial market.

The ministry of finance told NHE bosses that any funding should comply with the goal of the Namibian Financial Sector Charter which aims to transform and strengthen the Namibian financial market.

It remains unclear whether the current board under Nandago will complete the process of sourcing the N$2b since its three-year term ends next month.

Hailulu’s term also ends in September. Some top officials in government are also worried that some NHE bosses might fast-track the process of getting the external funding and dish out the billions for the inflated contacts they agreed to before their terms end.

There are also sentiments by officials in the ministry of urban and rural development that NHE does not need the N$2b any more since the government has already paid part of that amount in the last financial year.

The lack of consensus over the N$2b means that the project will continuously be affected by the lack of funding, a situation that has exposed constructors to massive debts. Some contractors are threatening to close down their sites by the end of this month.

NHE will receive N$220 000 million as subsidy from government but sources said this money will go straight into the hands of private banks which gave the housing parastatal an overdraft this year.

Source : The Namibian