PRIME Minister Kassim Majaliwa has tasked the National Housing Corporation (NHC) to ensure that it thoroughly scrutinise investors wishing to undertake joint ventures projects with the corporation.
The move, PM Majaliwa said, will significantly help NHC to secure private developers with ability to accomplish quality projects on time.
Premier Majaliwa made the directives in Dar es Salaam yesterday, during the launch of a revised joint venture (NHC JV) policy 2022 between the state-owned real estate developer and private developers.
Mr Majaliwa stressed that through the revised policy, the government expects to see the state-owned corporation and private real estate developers build strong partnership for development of the housing sector, which is crucial for economic growth.
The PM was equally optimistic that participation of the private sector in real estate development will be a catalyst for booming Tanzanian cities, giving assurance of commitment by the government to address challenges facing the sector.
"The government is pleased to see that NHC has shown commitment to work with the private sector to construct affordable houses on its chunks of land with dilapidated houses or on plots which have not been developed.
"This is a welcome move and clearly demonstrates support to the government under the leadership of President Samia Suluhu Hassan, who has been on the forefront of attracting private investments in boosting the economy," he commented.
Adding; "The government understands that engagement of the private sector will be a catalyst for the real estate development sector for modification of our urban areas."
On the other hand, Mr Majaliwa pointed that Tanzania is facing a shortage of three million housing units, while the demand has been growing at an average of 200,000 houses every year.
"The shortage of houses has led to owners of private houses to charge exorbitant and sometime demand rental fees for the whole year from their tenants," he pointed as a matter-of-fact.
The PM was thus confident that through the planned joint ventures between NHC and private developers many people will be in position to own houses and eventually reduce shortage of the housing units in the market.
For her part, the Minister for Lands, Housing and Human Settlement Development, Dr Angelina Mabula, said that since NHC introduced joint-venture arrangement with the private sector in the year 1993, a total of 111 projects have been implemented countrywide with a combined total value of 300bn/-.
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She said out of those projects, a total of 81 worth 240bn/- have been completed, while 30 projects worth 60bn/- are expected to be completed soon.
In a related development, Dr Mabula instructed the corporation to analyse the contracts in detail to find potential and capable investors, adding that the newly revised policy will greatly help in terms of transparency.
The Director General of NHC, Mr Nehemiah Mchechu, said the revised JV policy of 2022 includes potential modes of partnership or financing arrangements that NHC can pursue for the development of its properties.
"The policy also addresses challenges that were encountered in the course of the implementation of initial JV projects in the past," NHC DG underlined.
Moreover, Mr Mchechu noted that the major feature of the revised JV policy includes improvements made to the four types of NHC JV arrangement namely, Land as Equity Contribution (LEC), Land and Finance as Equity Contribution (LFEC), Revenue Sharing Model (RSM) and Long-Term Lease Agreement (LLA)
He explained further that the minimum selection criteria under Land as Equity Contribution (LEC) is that the value of the proposed partner's investment in the project should be at least four times the value of NHC's land that is being invested on.
