VZCZCXYZ0022
PP RUEHWEB

DE RUEHLGB #0534/01 2201417
ZNR UUUUU ZZH
P 071417Z AUG 08
FM AMEMBASSY KIGALI
TO RUEHC/SECSTATE WASHDC PRIORITY 5518
INFO RUEHBS/AMEMBASSY BRUSSELS 0274
RUEHJB/AMEMBASSY BUJUMBURA 0369
RUEHDR/AMEMBASSY DAR ES SALAAM 1184
RUEHSB/AMEMBASSY HARARE 0298
RUEHKM/AMEMBASSY KAMPALA 1953
RUEHKI/AMEMBASSY KINSHASA 0504
RUEHLO/AMEMBASSY LONDON 0284
RUEHNR/AMEMBASSY NAIROBI 1282
RUEHFR/AMEMBASSY PARIS 0545

UNCLAS KIGALI 000534 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BEXP BTIO ECON EFIN EINV ETRD PGOV RW
SUBJECT: NEIGHBORHOODS FLATTENED TO MAKE WAY FOR URBAN 
DEVELOPMENT 
 
1.(U) Summary: In implementing its vision of a modern Kigali, 
the city government has begun demolishing poor neighborhoods 
in Kigali city center.  Evicted residents complain they are 
being treated poorly, and unfairly compensated for their 
expropriated properties.  While the city is offering evicted 
residents new housing options, the distance, the cost of the 
housing and lack of employment opportunities in the new 
location make relocation unattractive for many of the 
displaced residents.  End summary. 
 
¶2. (U) On Sunday morning July 20, bulldozers began 
demolishing homes in "Kiyovu Pauvre" (Poor Kiyovu). The 
warren of mud brick houses and shops lying adjacent to posh 
"Kiyovu Riche" (home to foreign embassies, up-scale homes and 
many of Kigali's better restaurants), was targeted as prime 
real estate in Kigali's urban development plan.  Many of the 
64 families evicted from the area complained that they were 
not given ample time to relocate and were not adequately 
compensated by the developer (government-owned Rwanda Social 
Security Fund - RSSF) for their property.  The Kigali City 
Council advised residents last year of the intended 
expropriations, but updated legislation governing property 
valuation is still pending in Parliament.  Local residents 
claim RSSF offered compensation based on old laws which 
consider replacement cost of the structures rather than the 
market value of the property. 
 
¶3. (U) The RSSF plans to install basic infrastructure and 
construct commercial buildings on the site which will then be 
sold to private investors.  As part of the planned urban 
development, the RSSF and the City of Kigali agreed to 
provide alternative housing to evicted residents in the 
Batsinda housing development on the outskirts of Kigali. 
However, residents claim that the cost of the new housing 
exceeds the compensation offered by the RSSF for the 
destroyed homes, thus obliging displaced residents to assume 
a mortgage, which many cannot afford. 
 
¶4. (U) Embassy local staff who live near the site noted that 
members of the community with larger homes (about 10-15 
percent) were particularly upset with the amount of 
compensation offered by the RSSF.  Their counter-offer based 
on market valuation was rejected by the RSSF as being too 
expensive.  Residents appealed to the Land Commission in the 
Ministry of Land and Natural Resources but, before the 
Ministry could investigate, the City ordered the destruction 
of the homes, residents allege.  The draconian action by the 
City Council provoked outrage among the displaced residents 
and even drew criticism from the normally pro-government New 
Times and FOCUS newspapers. 
 
 
You Can't Make an Omelet Without Breaking Eggs 
--------------------------------------------- - 
 
¶5. (U) Kigali Mayor Aisha Kirabo Kakira asserted to the press 
that the demolished homes were dilapidated and lacked basic 
sanitation facilities, running water and electricity.  While 
acknowledging that the process was painful, she claimed that 
the City advised residents a year ago about the impending 
evictions and stated "it was a positive change and should be 
welcomed."  The mayor stressed evicted families were not left 
out in the cold and were given the option of relocating to 
the Batsinda housing development. 
Qthe Batsinda housing development. 
 
 
Build It and They Will Come 
--------------------------- 
 
¶6. (U) The Batsinda housing development is a pilot project 
undertaken by the RSSF, Kigali City and the Military Engineer 
Regiment to provide affordable housing to low-income 
residents evicted from expropriated land in Kigali.  As of 
the end of July 2008, an initial 250 units were completed, 
with an additional 1000 units in various stages of 
construction.  The development is located on the outskirts of 
Kigali, approximately 5 miles from the city center via  a 
dirt road.  Each house has a living space of 200 square feet 
including a kitchen, bathroom and two small bedrooms (which 
critics assert are too small for larger Rwandan families). 
 
¶7. (U)  Although small, the units are well-constructed 
 
(compared to the demolished homes) with hydro-foam block and 
corrugated steel roofs on a cement slab foundation. 
Amenities include a cistern fed by rainwater and a septic 
tank/biodigester that provides biogas cooking fuel. 
Electricity is provided through the electrical utility 
company.  Alternatively, residents are offered the option of 
purchasing a solar panel subsidized by the City of Kigali 
that would power several lamps for up to 5 hours. 
 
¶8. (U)  At $7,000 per unit, the cost of the new housing is 
substantially higher than the average of $600 in compensation 
offered for the expropriated properties in Kiyovu, and a 
fortune for most residents of Kigali Pauvre, who make less 
than $1 per day.  Rusura Ephaim who is managing the Batsinda 
development, told emboffs that the RSSF would provide 
residents with low cost loans to purchase the properties but 
admitted that the loan terms were still being negotiated and 
he did not know how much they would have to pay in monthly 
mortgage for their new homes.  Ephaim also agreed the lack of 
nearby services, transportation and employment were a major 
concerns.  Only ten percent of the new residents have jobs 
and the site lacks such infrastructure as shops, schools and 
medical clinics, he acknowledged. 
 
¶9. (U)  The issue of property valuation is a major impediment 
to urban development in Rwanda.  Property titles are 
virtually nonexistent, there are only a handful of qualified 
real estate appraisers and legislation governing property 
valuation (drafted with the assistance of USAID) has yet to 
be signed into law.  A number of developers such as Stippag 
have suspended property development projects due to the 
uncertainty of land ownership, the high cost of construction 
materials (the cost of cement doubled within one year) and 
inflated property costs arising from speculation. 
 
 
The Road to Batsinda is Paved with Good Intentions 
--------------------------------------------- ----- 
 
¶10. (U) Comment: The GOR and City of Kigali have good reasons 
to quickly implement urban development projects.  Kigali is 
one of the fastest growing cities in the world and the 
problems it faces today from urban growth will be tenfold in 
a few years' time.  The low cost housing project in Batsinda 
is in many ways a commendable effort to offer affordable 
housing options to Kigali's displaced poor.  However, in its 
haste to implement these projects the GOR is running 
roughshod over the legitimate concerns of expropriated 
property owners and ignoring real hardships faced by 
displaced residents.  As the country seeks to modernize its 
capital city, the increasing divide between rich and poor 
will become more evident as low-income families are forced 
further from the city center and its economic opportunities. 
End comment. 
SIM