Businessman Suleiman Shahbal has disclosed that he lost Ksh450 billion during the construction of the Affordable Housing Project in Buxton, Mombasa County.
Speaking on the ‘Tubonge With Chris the Bass’ podcast, Shahbal, the main developer of the project, explained that he lost the money because his firm had not considered multiple key factors when taking up the project.
The businessman intimated that he thought the real estate development was a walk in the park, only to be met by the harsh reality on the ground.
“Within nine months, we lost Ksh450 million in Phase 1 of the Buxton Point Affordable Housing. That was our learning point,” he stated.
Shahbal stated that despite putting up the housing units, his firm had to dig into their pockets to ensure critical amenities were available, or the project would fail.
“We built the houses only to realise that there was no water nor a sewerage system, which the county was supposed to cater for, but they did not have the capacity.
“We ended up building the sewerage system, since people cannot move into 520 houses without it. Ksh120 million went down the drain,” the businessman disclosed.
He further explained that the area had soft sand, which was not ideal for construction. His firm needed to fortify the area’s foundation, which further increased construction costs by 20 percent.
Other unforeseen circumstances that pushed up the costs of completing the project were the coronavirus and the war between Russia and Ukraine.
“You wonder what the Ukraine war had to do with this; the price of steel went up by 140 per cent,” Shahbal elaborated.
Nonetheless, the businessman decided to proceed with the project, explaining that stopping would dent his company’s reputation, which had been entrusted to deliver the housing units. The loss offered lessons which he took to complete the project.
“Buxton has won an award as the best affordable housing project in Africa, not Kenya. We won architectural and environmental awards – it is a great story,” Shahbal intimated.
