Billionaire businessman Suleiman Shahbal has revealed how he lost Sh450 million in nine months during the construction of affordable housing units in Buxton, Mombasa County.
Speaking on the ‘Tubonge With Chris the Bass’ podcast, Shahbal attributed the massive loss to some unforeseen circumstances that pushed construction cost higher, leaving some key parts of the construction incomplete.
According to him, the construction site 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.
The businessman revealed he was forced to dig into his pockets to clear the arrears since the County government was unable to.
“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. Sh120 million went down the drain,” the businessman disclosed
“Within nine months, we lost Sh450 million in Phase 1 of the Buxton Point Affordable Housing. That was our learning point,” he added.
Shahbal further added that the Russia-Ukraine war hugely affected the project’s construction. According to him, the price of steel went up by 140 percent. Despite the challenges, he pushed on to prevent the project from failing.
Shahbal Profile
Shahbal is a Kenyan politician and businessman. He is the founder and chairman of GulfCap Group of Companies, a diversified conglomerate with interests in finance, real estate, energy, and hospitality.
Before diverting into entrepreneurship, Shahbal worked in various fields, including the banking sector.
The University of Nairobi Finance graduate worked across several countries, including Yemen and the Gulf countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, the United Arab Emirates (UAE), India, Bahrain, and Saudi Arabia.
He later quit employment to start his own businesses, which include the Gulfcap Group, an investment company in the UAE, and Gulf Energy which was later sold to Rubis in 2019.
Through GulfCap Real Estate, Shahbal won a Sh13 billion contract to construct affordable houses in Starehe Constituency.
The proposed development will comprise 2,000 social housing units retailing at Sh1.155m, and a total of 4704 one-bedroom, two-bedroom, and three-bedroom units ranging from Sh2.5m to Sh3.5m.
The holistic project will be complemented by the construction of social amenities such as swimming pools, food courts, green spaces, LPG and ICT connectivity among other supporting internal infrastructure such as cabro paved driveways.
GulfCap Real Estate also developed Buxton Point in Mombasa.
Also Read: Step-by-step guide to buying affordable housing units, features and charges
