No STX in sight

As Bagbin’s July prediction falls flat

SEVEN months after the flamboyant sod-cutting ceremony by President Mills for the commencement of the proposed construction of 30,000 housing units for security personnel in the country and coupled with the prediction by the Minister of Water Resources, Works and Housing, Alban Bagbin, that “physical houses will be seen sprawling at the various sites by July”, not even a single block has been laid on the site for the STX housing project to take off.

It is recalled that Alban Bagbin, on the 12th of May 2011, in an interview with Joy FM’s Araba Koomson on the sidelines of a workshop on “Improving access to housing in Ghana”, stated categorically that “project handlers have finished the feasibility study on the sites and clearing of the land will begin next month (June), to pave way for commencement of the project”.

The Minister further went on to add that, “We have been blamed for not starting the STX housing project early but it is because we want to do things properly. By July physical houses will be seen sprawling at their various sites”.

However, a visit by the New Statesman to the proposed sites for the project revealed there was no physical effort underway for actual construction work to start, as we were only met with weeds blossoming freely on the land.

The issue of funds is certainly not the problem as the Honourable Minister stated on the floor of parliament, on the 5th of July, that funds totalling $1.5 billion have been secured from Barclays Capital, the investment banking division of Barclays Bank PLC of UK, serving as the lead bank of a consortium of banks, with the Finance Ministry, on behalf of government, also issuing a Sovereign Guarantee.

Alban Bagbin also revealed that the necessary arrangement for the transfer of the money has been made and “a dedicated account has also been opened at the Bank of Ghana for the necessary transactions.”

Despite all these developments intending for the commencement of the project in July, nothing, in terms of construction, has yet been seen on the project sites at Atomic Energy, Burma Camp, Air force Station and Tesano Police Depot, all in Accra, and Nagoyam in Tamale.

The STX deal, brokered by Vice President John Mahama, is for the construction of 200,000 houses in Ghana within a period of five years. The Government of Ghana is to acquire ninety thousand (90,000) units of the houses representing 45% of the housing project. Out of the 90,000 units, 30,000 units would go to the security agencies with the remaining one hundred and ten thousand (110,000) housing being operated by Home Finance Corporation.

The Minority in parliament, together with civil society organisations such as the Danquah Institute and IMANI, have long held the view that this deal is fraught with monumental fraud and seen as a conspiracy to fleece this poor country of hundreds of millions of dollars.

Arguments have also been made pointing to the fact that the cost of $50,000 per house is inordinately high, considering the fact that the Government of Ghana is providing the land, permits, tax exemptions on imported materials and machinery, corporate tax exemptions, as well as paying for expenses of STX.

The provision of $265 million political risk insurance for the $1.6bn suppliers’ credit facility has also come under question by the minority in parliament, with the Danquah Institute describing the fees and insurance premium for the facility as “a total rip-off”.

The 17.34% insurance premium covering the credit facility has been described as “very fishy”, which should not have any place in any credible and important financing agreement with a developing, democratic nation like Ghana.

It has been argued that Government can save the nation more than $200 million if it opts for the kind of political risk insurance cover offered by MIGA, a member of the World Bank Group, for developing states like Ghana.