Business

Developers may not support State housing agenda

Friday, September 20th, 2019 00:00 | By

A national lobby group for property developers is threatening to re-consider its role in the implementation of the Jubilee government’s Affordable Housing agenda due to frustrations by civil servants.

The Kenya Property Developers Association (KPDA) is blaming endless corruption and inefficiency in public service for making the roll-out of housing projects impossible. 

For instance, the building and construction professionals are encountering delays in processing building permits across all the 47 counties. 

KPDA was picked by the government to help oversee execution of affordable housing plans. Members of the association, mostly drawn from the private sector, who feel betrayed by county governments, say the approval process is a nightmare.

The current membership of KPDA is a diverse make-up of all industry players including property development firms, real estate agents and managers, professional firms, industry suppliers, government agencies, institutional investors and managers and financial institutions who are based both in Kenya and abroad.

Heavy losses

Kenya is considered one of the most dynamic and developing nations in Africa as far as construction industry is concerned. With thousands of commercial buildings, real estates and skyscrapers being erected daily, the country presents a wide range of investment opportunities for investors.

Constructing a commercial building in Kenya and, especially in major towns requires a number of permits before the official ground breaking. 

Developers say they are incurring  heavy losses when seeking approval permits from county governments. 

KPDA director, Gikonyo Gitonga, says they may change tack from the State’s Affordable Housing agenda to focus more on construction of middle- and high-end properties. “We will go back to building malls, warehouses, hospitality industry facilities and office space if a solution to this bottleneck is not found,” he told a media briefing in Nairobi.

Another KPDA director, Anne Muchiri, singled out Nairobi County government for placing “serious hurdles” in the permit application process. 

She said enthusiasm by contractors in the private sector whom the State had brought on board to help the public sector implement the affordable housing agenda has since vanished. 

“We are willing to partner with the government to help the agenda succeed, but the delays are very frustrating. Development is curtailed.  “The costs we incur because of the delays are being passed over to clients. It’s a mockery of the affordable housing agenda,” she said.

Process sabotaged

Currently, Nairobi is losing Sh91 million in revenue collection from developers each month, after its e-construction Permit systems collapsed, says KPDA. 

However, Nairobi County Government Housing Minister, Winnie Gathungu has promised the system will be up and running in a “couple of days”. 

She  acknowledged the crisis, but said a World Bank-funded upgrade programme is in the process and a consultant is on site working to revive the computers. 

“No money will be lost since it has to be paid on approval,” she said.

KPDA is of the view that resistance by counties to adopt the automated e-construction-permitting procedures was a deliberate act to sabotage the process regardless of the revenue the devolved units are missing.

Gitonga, who was accompanied by the event host, the President of the Architectural Association of Kenya (AAK) Mugure Njendu, protested at the turn of events that has since seen the counties of Nairobi, Mombasa, Kiambu and Kisumu adopt the technology.

“The construction industry needs a one- stop shop for processing all construction permits and synergies created by the e-construction permit simultaneously and significantly reduced the time to issue development permit,” he said. 

Nairobi and Mombasa counties were singled out for their preference in the application of analogue construction permitting processes.

Grease hands

Developers seeking  services at the city halls have been turned away and reasons for lack of internet given for manual or analogue preference. 

 AAK vice president, Wilson Mugambi said it takes up about 20 to 30 days for a developer to get a permit in Kiambu county, but two months in Nairobi instead of an average period of 14 days. 

“Manual processes have cultural challenges. Human contacts set in a motion to grease hands. 

“The process is slow. Remember investors have loans, deadlines for clients to meet, workers to pay. If the process is slowed down we all suffer, the economy is hurt,” says Mugambi.

 The construction e-permitting system was developed jointly by the county government, the World Bank and AAK, to enhance efficiency and accountability in the processing of construction permits. 

In May 2019, the Nairobi system collapsed when the contract between the City county and the service provider, JamboPay, ended.

Says Mugure: “Industry players —consultants, developers and contractors— are frustrated at the long period it takes for approvals to be processed by various development control units”.

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