Botswana Housing Corporation (BHC) Chief Executive Officer, Reginald Motswaiso has defended his organisation’s decision to backtrack on an earlier commitment regarding the Tsholofelo Housing Project.
BHC had initially said the units would be sold through an Installment Purchase Agreement or rent-to-buy policy.
However, the Corporation has since made a U-turn, with prospective buyers having to source for funding elsewhere to purchase the houses outright.
Addressing the media on Tuesday, Motswaiso revealed the decision to change the method of payment occurred after BHC realised their original offer could lead to cash-flow issues, which would leave them unable to carry out future projects.
In constructing 750 flats in Tsholofelo, BHC had secured a P400 million loan facility which is being serviced for a period of 15 years.
Of the 700 houses that will be launched today (Friday), 250 units have been reserved for the youth while the remaining 500 are open to everyone, including the youth. The other 50 are still to be built.
Each unit consists of two bedrooms, a kitchen, lounge and bathroom and will cost buyers P440, 160 – cash they will have to produce upfront to finance the deal.
“I need to emphasize that the units were built using borrowed funds. Therefore the price is such that BHC is able to recover the cost of construction including utilities, the interest charged on the borrowed money, management fees and so on,” stressed Motswaiso.
Asked if the huge price-tag would not act as a deterrent to prospective buyers, especially the youth Motswaiso told this publication after the press briefing that the move will serve as a test to see if the youth are ‘capacitated’ or not.
Should the Corporation fail to meet the set quota for units reserved for youth, Motswaiso said BHC would be forced to put the units on the open market.
This is because, as he explained, BHC is not allowed by the Act to be a loss-making organisation.