19 Oct 2015

Botswana Housing Corporation (BHC) chief executive officer, Mr Reginald Motswaiso, says while rental income stream has remained stagnant, property holding costs such as maintenance and administration have continued to increase.

That, Mr Motswaiso said, affected the corporation’s financial performance.

Briefing the Parliamentary Committee on Statutory Bodies and State-Owned Enterprises, Mr Motswaiso said BHC had not increased rentals since 2004.

“Stagnant rental also affects our ability to dispose of housing units to sitting tenants as they find it cheaper to rent than to service a mortgage,” he said, adding that also affected their ability to raise money in the financial market because it raised doubts about BHC’s ability to repay borrowed funds.

He indicated that some of the challenges BHC was faced with range from unavailability of land in strategic areas, allocated land was not serviced, unavailability of water in some areas (Kgale View, Molepolole, Kanye, Pilane), unaffordability of housing properties due to high input costs which included infrastructural costs and distance of allocated land from services, among others.

On BHC’s financial performance, Mr Motswaiso said for this year, surplus had decreased from P37.6million to P16.3million because of rental income that had been unchanged at P186.6million compared to P186.7 million in 2012/2013.

“Also our inability to deliver and dispose of some 516 houses at Phakalane due to sewage capacity had an impact,” he said.

Further, he said BHC started its sitting tenants campaign on April 2014 in order to accelerate home ownership.

“The campaign was intended to encourage sitting tenants to purchase the properties there were currently leasing in order to realise the value in these properties,” he said.

He added that envisaged challenges included low affordability levels of their existing customers had been low compared with mortgages the banks could offer.

“Despite these challenges the campaign is expected to yield very positive results which will see home ownership increasing,” he said.

Again, he said BHC had set a target to sell 1036 housing properties in 2013/2014 and properties targeted were located in various parts of the country, but mainly in Phakalane.

“However, the corporation only managed to sell some 290 housing units,” he said.

On social housing projects, Mr Motswaiso said when the SHHA turnkey project was handed to BHC, expectation was that the corporation would deliver 1000 houses annually.

“By March 2014, 627 SHHA houses had been started in various parts of the country,” he said, adding that the project came with its own challenges, among them plot identification, availability of water and sewerage facilities, contract administration.

Mr Motswaiso further informed the statutory body that BHC had a seven year strategic plan (2009-2016) which was reviewed mid-term in 2012 to respond to drastic changes in the operating environment. Ends