This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 DJIBOUTI 001006
E.O. 12958: N/A TAGS: ECON EAID ETRD EFIN DJ PGOG SUBJECT: INAUGURATION OF HODANE CITY, AN 842 SOCIAL HOUSES COMPOUND IN DJIBOUTI
1. (U) Summary: President Guelleh inaugurated October 11 Djibouti's first social housing complex designed to greatly improve the housing situation in Djibouti. The 842 residences, consisting of apartments and villas cost USD 24 million and was co- financed by the Arab Fund for Economic and Social Development (AFESD) and the Abu Dhabi Fund for Development (ADFD). The residences will be leased on a rent-to-own basis or can be directly purchased. The development is equipped with a modern waste drainage system and will be supported by schools and a mosque. Guelleh described the project as his government's way to facilitate housing ownership for citizens in order to avoid a growing disparity in housing between poor and rich. Hodane City is to be followed by Hodane City II, with 1,000 residences, financed by both AFESD and ADFD for a total of USD 28 million. End Summary.
2. (U) Ambassador, along with her colleagues in the diplomatic corps, and members of international organizations in Djibouti, participated in inaugural events October 11 for Djibouti's new social housing complex called Hodane City. Initiated by the Government of Djibouti in 1999, Hodane City comprises 842 habitations built by a Dubai- based company and funded by Arab development agencies.
3. (U) The project of Hodane City was originally planned for the construction of 2,000 low-income residences. A large parcel of land was later prepared for construction with assistance from France and the World Bank, within the framework of urban development of Djibouti, which made available 3,600 plots of land. Hodane City is built on that same spot, located at Balbala, on the outskirts of Djibouti City. The site stands on high ground, close to National Road no. 1. It offers a good view of the Gulf of Tadjourah and the Port of Doraleh but most importantly, waste and rainwater can be easily drained out. Hodane City includes 842 low-income residences, a large Mosque, a school, a clinic and a market. Two and three bedroom units are available in villas or duplexes, and four bedrooms in apartment buildings. Space is available in villas and duplexes to accommodate one or two extra rooms if necessary. These houses are leased on a rent-to-own basis or can be directly purchased. It is important to note that Hodane City is equipped with Bio Pak, a modern wastewater drainage system. This environment-friendly drainage system is unique in Djibouti.
4. (U) The Arab Fund for Economic and Social Development (AFESD) co-financed the project with the Abu Dhabi Fund for Development (ADFD) for a total amount of US$ 24.45 Million. The GOD obtained this loan at a 3% rate for twenty years with a grace period of five years. Dubai based Lootah Building & Construction won the tender and was awarded the construction work engineered by the Kuwaiti Pan Arab Consulting Engineers. This major project, a first in Djibouti, had a positive impact on the economy of the country. This project revived the construction sector, which was experiencing serious difficulties, by creating hundreds of jobs. Lootah Building & Construction and the locally subcontracted companies (more than 40) completed the project in 32 months as planned. It is important to note that the work master is the "Societe Immobiliere de Djibouti (SID)," a government real estate agency that oversaw the project, and will manage Hodane City. SID has managed the creation of several other housing complexes including Arhiba City (832 houses), Einguela City (804 habitations), Wadajir City (106 houses) and Luxembourg City (92 lodgings).
5. (U) In his speech inaugurating Hodane City, President Guelleh said the project is a reality today but it is the product of hard work, patience and perseverance on the part of those who participated in the construction of this "beautiful work of art." He explained that the government was not trying to compete with private initiatives but simply facilitating house ownership for citizens in order to avoid a growing disparity in housing between the poor and the rich. President Guelleh stressed that the government will make sure that the same opportunities are offered to fellow citizens in other regions of Djibouti. President Guelleh stated a house is not a luxury but a right the government should guarantee to all citizens, no matter their conditions. Finally, he took the opportunity to comment on the decentralization process recently initiated by the government and added that social housing for district inhabitants is an important part of his decentralization plan.
6. (U) In an interview, the Minister of Housing expressed his appreciation for Hodane City but at the same time deplored the existing difficulties in the housing sector in Djibouti. He said that 2,500 additional houses are necessary to lodge the 3% population growth every year. He added that in spite of the reduction of construction material custom duties, the cost of building remains high because most of the material is imported and labor cost is high. Also, high interest and strong guarantees imposed by the banks make it very difficult for average Djiboutians to obtain loans. According to the Ministry of Housing, urbanism, only 34% of houses are made of permanent material, 50% of households own the house they occupy, and rent represents 40% of a household's expenses.
7. (U) Hodane City is soon to be followed by Hodane City II, with 1000 residences, located at the same site. Hodane II, which is in preparation phase, is also being financed by AFESD and ADFD for a total amount of US$ 28 Million.