Nyayo estate houses were overpriced – report
Thousands of home owners in Nyayo estate Embakasi may have paid more than the original price of their houses.
The final cost of building the 1,810 units in phases three, four and six was Sh550 million more than that quoted by the bidder, China Jiangxi, it has been revealed.
And just like buyers of plots in the now controversial Tassia Scheme are being forced to cough an extra Sh605,000 per plot to cater for the Sh4.6 billion required to put up infrastructure in the scheme, real estate valuers are warning that Nyayo buyers could have paid more to cater for the millions added to the original bids.
A report presented to Parliament’s Public Investments Committee (PIC) by NSSF Managing Trustee Richard Langat showed that more than Sh500 million was added to the original bid to carter for cost of plumbing and electrical works.
Real estate valuer Collins Otieno yesterday said that the increase in the cost of a project would ultimately mean that the prices of the houses also go up.
“NSSF as the client is out to do business and they would not like to see their expected return shrink. This means that it is the buyer who will bear the burden of this increase,” he said.
According to Mr Otieno, the addition in the final cost of the project could come up depending on the type of contracts that the tender specified.
“There are two types of contractors; the building and nominated/specialised contractor.
For NSSF to adjust the prices to include plumbing and electrical, it means that they have accommodated China Jiangxi to outsource for the specialised contractor to do this job,” he said.
Charles Peter Mwangi of Rubyland Limited, a real estate valuation firm noted that the contractual obligations depended on the fine print that both parties signed.
“For any cost adjustments for the project, we also have to expect a cost adjustment in terms of the final selling price. That is normal because NSSF is doing this for returns on investment,” he explained.
From the documents tabled before PIC, EPCO Builders were the main contractor for the flagship Nyayo Estate Embakasi estate built between 1998 and 2000.China Jiangxi took the other phases of the project.
In the first phase of the project, consisting of 1156 houses, and both its second phase consisting of 1349 houses, the final amount was less than the bid amount.
But in all the Chinese firms’ projects, the final sum was revised upwards.
The combined sales proceeds from phase one and two were Sh8.1 billion.
The revalations came up in documents that the NSSF furnished the parliamentary committee looking into Tassia estate scandal that was revealed by the Central Organisation of Trade Unions secretary general Francis Atwoli early last month.