The controversial Gvt houses auction caused $200m loss

[BAK]

The controversial gvt houses auction caused $200m loss

2008-12-21 12:03:20
By Staff Reporter

According to the secret report made available to The Guardian on Sunday, it has cost the government more dearly than it was expected, painting another gloomy picture to President Benjamin Mkapa`s regime, which was clouded by serious controversial decisions.

In its conclusions, the report summed that the sale of government houses to senior politicians and officials was characterised by contradictory policy objectives and the systematic misuse of public resources.

``As a result of selling public housing and land at a fraction of market values to a relatively small group of politicians and senior officials, the Government of Tanzania has foregone a windfall income of hundreds of billions of shillings (hundreds of millions of USDs), and will continue to lose money on future sales``, says the 27-page report.

In Dar es Salaam alone, according to the report, income foregone from the sales is estimated at over $200 million.

For instance, the report reveals that in Oysterbay, Upanga, Sea view and other prime areas, the current market value of the land on which the auctioned government houses are built ranges between $150,000-$500,000, depending on the location, but yet the buyers paid not more than $50,000 to acquire the property.

Contacted this week for comment about what has been achieved during the execution of the controversial project, Makumba Kimweri from Tanzania Building Agency (TBA) said by August this year, only Sh39.5billion was already earned.

TBA has estimated to earn Sh57billion revenues from the controversial `auctioning` of government`s houses.

According to data released by TBA, a total 7,159 houses were sold countrywide.

Surprisingly, the money earned was used to build only 910 houses, making the project another `white elephant` as it failed even to meet 20 percent of the total houses demanded by the growing number of public servants.

The TBA official added that, the exercise to sell government houses will continue after civil servants, tenants of the proposed houses for sale, complete certain formalities including settling rents for those who are yet to pay.

According to the report, the reasons given for the partial auctioning of state-owned houses were among other things `to generate funds `with which to construct more and better housing units.`

It was assumed, this would be cheaper than refurbishing the dilapidated houses, but knowing what we know today, it is obvious that the project backed strongly by the third phase regime, was another means of looting public resources.

Although the Ministry of Works` Estates Department commissioned an independent valuation of government houses prior to their sale, the valuers were not asked to assess the value of the plots on which the houses stood, the report has found.

Following the situation, the sale of government houses was therefore premised on the fiction that the land on which the houses stood had no market value.

``When senior government staff and politicians learned that they could buy the houses they were living in at what was called `book value`, some had the houses repaired and/or upgraded at government expense, either through the Ministry of Works or their own ministries,`` the report says, adding that eventual prices paid for the houses were supposed to reflect the cost of the repairs, but individual deals were brokered so that the same price was paid for properties differing widely in value.

``I estimate the total value of the 478 government houses/plots sold in Oysterbay at Shs 165 billion, or $149 million�we know that that the TBA sold unimproved houses on one acre plots in prime locations for Shs 33 million and this is unjustifiable,`` says the author of the report

Tales of three officials
A Permanent Secretary bought the house in which he lives, in a choice area of one acre plots in Oysterbay.

The house has previously been extensively improved by the Ministry of Works, though the PS contests the value of the work performed and the quality of the workmanship. The price he pays for his house - over Shs 60 million - includes the agreed cost of the improvements. His plot is worth $500,000.

Just a few metres away, lives a Deputy Permanent Secretary, whose house remains largely as it was when built over half a century ago.

The Ministry of Works has not maintained the property, and the modest improvements to the plot (gate, wall/fence) were provided by the ministry.

He bought the house for Shs 33 million, including the one acre plot. Most of the houses and plots in his area sell for this price.

His plot is worth about $500,000. He has already paid for the property, by selling a house and a plot of land he owned in Dar es Salaam.

He says that the CRDB will offer loans to those who have bought their properties from the government.

He plans to build a modern house to rent after he retires in a few years` time.

Another Deputy PS lives in another typical colonial house off Chole Road. He has lived in the same house for more than twenty years and will retire in three years` time.

The plot (more than one acre) is worth up to $500,000. He intends to continue living in the house after his retirement. His first concern is to find ways to pay off the Shs 33 million that he owes the TBA.
SOURCE: Sunday Observer

 

[BAK]

EDITORIAL: Govt houses dished to politicians?

EDITORIAL
THIS DAY
DAR ES SALAAM

IT has emerged that a decision made during the previous regime to sell government houses to give way for modern buildings meant to house public servants ran into losses worth millions of dollars. The houses which were sold to politicians at prices lower than the existing market value are said to have cost the government $200m in losses for Dar es Salaam Region alone.

The damning 27- page report released by the donor community reveals that the value of the land in prime areas such as Oysterbay on which the government houses are built ranges from $150,000 to $500,000; yet politicians were able to acquire the same property at a deflated value of as low as $50,000.

To highlight how our politicians abuse their offices with impunity, the number of houses sold countrywide of 7,159 is yet to be matched by the building of new ones as Tanzania Building Agency data reveal that only 910 houses have been built from the money gained from the sale of the government houses.

It is now an open secret that the land on which the old houses stood was never valued by the Estates Department of the Ministry of Works, giving the false impression that it was valueless. By choosing to ignore one of the most important principles of property valuation, the Estates Department's 'oversight' is a clear indicator of how politicians in the previous regime deliberately colluded to devalue public property so that they could acquire it easily.

The controversial events that followed the sale of the government houses serve as a lesson as the project has turned out to be another 'white elephant' where politicians in the Mkapa regime turned a noble project into a cash cow and a means of looting public resources.

The elaborately planned exercise of selling public houses which was commandeered by politicians, who ended up as the sole beneficiaries of the project, reeks of corruption and deserve the same attention other corruption cases have been receiving in the recent past.

Just like the other corruption scandals that we are trying to fight, Tanzanians would love to see the government headed by President Kikwete get to bottom of the houses scandal to ensure that those who benefited and indeed continue to benefit unfairly from the sweat of innocent Tanzanians, face the justice system in the country.

If we are to fight abuse of office and impunity by public officials in the country, the current occupants of the new houses, which are understood to have undergone renovations at the expense of public funds from the Ministry of Works and other ministries, should either be made to pay up the balance according to the current market value or face the law.

The government houses scandal adds to emerging reports of corruption in Zanzibar implicating Tanroads, where more than 340m/- meant as roads fund was allegedly pocketed. The allegations were made by Mtambile legislator, Masoud Abdalla Salim (CUF), who noted that money earmarked for upgrading roads that connect villages in Kilwa District, Lindi Region had been lost through corruption as the roads in those areas continue to be in bad conditions.

It is therefore important for the current scandals to be dealt with expeditiously before they turn into another song. President Kikwete's decision to walk the talk instead of talking the talk that has been hailed from around the world should continue. The journey continues.

 

[Kamundu]

Kusema kiwanja kinagharimu milion miatano ni ufisadi. Pesa za EPA hazitakuwepo miaka yote mimi siamini kama viwanja vinagharama ya milioni mia tano.

 

[August]

nafikiri report bila kuchukua hatua itakuwa ni hadithi, raisi kwa kutumia mamlaka yake kwanza angeamua kurudisha nyumba zote walizo pewa viongozi kama Sumaye, mkapa etc na kwa wale wa level yetu Bunge lichukue uamuzi wa kuzirudisha chini ya umiliki wa serekali, maana walio uziwa waliambiwa wasizifanyie chochote for the next 25 years, hivyo hakuna loss walio pata , sana sana ni interest ya mikopo waliochukua kuzinunua hizo nyumba. matengenezo waliambiwa no.maana tukichukua hiyo theory, the vice chancellor wachuo nae auziwe nyumba , ma-lecture nao wauziwa.

 

[BAK]

nafikiri report bila kuchukua hatua itakuwa ni hadithi, raisi kwa kutumia mamlaka yake kwanza angeamua kurudisha nyumba zote walizo pewa viongozi kama Sumaye, mkapa etc na kwa wale wa level yetu Bunge lichukue uamuzi wa kuzirudisha chini ya umiliki wa serekali, maana walio uziwa waliambiwa wasizifanyie chochote for the next 25 years, hivyo hakuna loss walio pata , sana sana ni interest ya mikopo waliochukua kuzinunua hizo nyumba. matengenezo waliambiwa no.maana tukichukua hiyo theory, the vice chancellor wachuo nae auziwe nyumba , ma-lecture nao wauziwa.

Nakubaliana na wewe kuhusu JK kutumia madaraka yake ili kuakikisha nyumba zote zinarudishwa serikalini. Kilichofanyika hapa katika hili swala la kuuziana nyumba kilikuwa ni wizi na ujambazi wa mchana kweupe tena bila hata woga wala aibu. Hili linabidi kuvaliwa njuga bungeni ili kuhakikisha nyumba zote kabla ya uchaguzi wa 2010 zinamilikwa tena na serikali.