After three years in the red - HAJ projected to return to profitability this year
The Housing Agency of Jamaica Limited (HAJ) is projected to realise a profit for its financial year ending March 31, 2017, the first time in three years, fuelled largely by sales of houses at its latest development, the Vistas in Runaway Bay, St Ann.
It is projecting to make a profit of roughly $60 million following a $900 million loss in its previous financial year, newly installed acting managing director, Gary Howell said.
Last week, Minister Without Portfolio in the Ministry of Economic Growth and Job Creation Dr Horace Chang was quoted as saying that the agency "will lose $900 million this year". However, the agency has since clarified that the year to which Dr Chang referred, during the open house and launch of the Vistas, was for financial year ended March 31, 2016.
Howell said the the agency is on target to once again become profitable, noting that up to October 31, 2016, the agency managed to reduce its losses to $4.8 million.
"Initially, our budget was showing that we would have been at a loss position of $163 million, but as at October 31 the position is different," said Howell, referring to measures being undertaken by the agency to ensure its viability.
He told Sunday Business that some 80 houses have been placed on the market, with another 150-170 to be built at the St Ann site.
The Vistas will feature serviced lots and a cluster of houses called The Savannah, which are now being sold.
Sales from the Vistas and other projects in St Ann, Howell said, will change the fortunes of the state housing provider.
About 80 houses have been completed - 50 two-bedroom town houses, and 30 two-bedroom bungalows.
The HAJ has taken deposits on four houses since its launch just over a week ago, Howell said, noting that he agency was on target "to cover our costs".
About $800 million was invested in the project, and the units have been priced at between $13 million and $14.5 million each.
Howell was tapped for the post of acting managing director earlier this year when five senior officials were dismissed.
Alongside the board's mandate to overhaul the Agency, Howell said his personal mandate will be to tackle slow-moving projects while ensuring proper project management.
Work on the Vistas began last year.
HAJ said the cluster of homes is the first of 250 houses to be delivered in that development. Each unit features solar panels, solar water heater and a solar grid tie system, and amenities in the gated community will include a clubhouse with pool and gymnasium, jogging trail and tot lots.
"This project is expected to generate significant revenue for us. We have another project in Runaway Bay in which we are selling serviced lots that will also bring in much-needed revenues," Howell told Sunday Business.
Three clusters are being developed, one of which will be serviced lots, work on which will begin in 2017 after the close of the current financial year, he said.
"We are also going back to Luana to do an additional 150 serviced lots, priced at $2.2 million to $2.5 million. These should be ready by summer next year," said Howell.
He was referring to the Luana Gardens development in St Elizabeth on which the HAJ is projected to lose $700 million.
"We have made sure that we have proper project management in place, and we have ensured that our costs are adequately accounted for," he said of the Agency's future plans.
Overall, the HAJ "won't be doing any project on which we are not able to recover the costs while generating a positive return," he said.
HAJ expects at least a 20 per cent return on investment on the next phase of Luana, Howell said.
Only three units remain to be sold of the 70 built in Luana, the acting managing director said.