Row over Mbowe Hotels Ltd, NHC spirals

The setting-up of Club Bilicanas without the approval of the landlord as well as inflating costs for renovation and rehabilitation for the building to the tune of 1.3bn/- are among factors that worsened relations between the National Housing Corporation (NHC) and Mbowe Hotels Limited (MHL).

Documentary evidence obtained have revealed that the company had in 1996 claimed to have spent 1.3bn/- on renovations of the building and yet the value of the land and property at that time was just 450m/-.

At this time in question, the NHC had proposed a joint venture agreement to re-develop the building in which each party would have 50 per cent stake but MHL rejected the offer pushing to be awarded 75 per cent shares.

It has as well come to light that MHL had put up the famous entertainment hotspot Club Bilicanas and Casino in 1989 without the approval of the then Registrar of Buildings (RoB), the precursor of NHC.

“The tenant (MHL) has refused to pay rents for many years claiming that he had spent a lot of money in construction of the club and yet he did not have the permit for the extension.

“This was unacceptable and the board of directors directed that he should continue paying rent,” the then Director General of NHC, Mr Haruna Masebu, wrote in a letter to the Minister for Lands, Housing and Urban Development at that time, Mr Edward Lowassa, in a letter dated September 5, 1994.

As if that was not enough, MHL had way back in 2007 made major facelift on the club which it later apologized for through a letter on July 28, 2009 written by the company’s Managing Director, Dr Lilian Mbowe, to the DG of NHC.

“We wish to bring to your attention that the property has just undergone massive renovations and refurbishments. However, allow us to regret and apologize for embarking in the project without seeking your full and specific consent.

“Besides the fact that no explanation will justify this oversight sufficiently, it was erroneously assumed by our project manager that regular renovations and maintenances require specific consent,” Dr Mbowe wrote.

She admitted that the project was not a regular renovation but a ‘massive and expansive investment’ that would have require permission of the landlord before it commenced.

Mr Lowassa has been implicated for pushing the then management of NHC to enter into the shoddy agreement in 1997 in which MHL pledged to re-develop and expanding the building to put a three-star hotel, conference and cinema facilities, among others.

However, years passed afterwards and MHL did not honour its pledges and this prompted the housing corporation to terminate the agreement in February, last year.

At that time MHL faced rents arrears amounting to millions of shilling and after repeated reminders it failed to settle the debt after which NHC issued it with a notice to terminate the lease agreement which comes to effect this week towards eviction from the building.

MHL is among seven tenants residing in the building, located along Mkwepu and Indira Gandhi (Makunganya) in Dar es Salaam’s central business district. Investigations by this paper have revealed that the company occupies 1,390.75 square metres, translating to 71.2 per cent of the building.

The company, owned by National Chairman of Chadema, Mr Freeman Mbowe, started occupying the building in 1973 after it was relocated from the then Splendid Hotel at the site of the Ex-telecoms building along Samora Avenue.

Efforts to get comments from Mr Mbowe were not successful yesterday. He was however quoted by the media last week claiming that the debt was “politically motivated to silence him.”

The Director General of NHC, Mr Nehemiah Mchechu, has however, denied such claims, stressing that the corporation has been evicting all defaulters including government institutions.

Source:DailyNews