$1.5bn STX Housing project is for holistic community dev't -Bagbin

By: Justice Lee Adoboe

Minister for Water Resources, Works and Housing has asserted that the US$ 1.5 billion project is meant for the development of holistic communities, and not just housing units.

Mr. Bagbin also denied the assertion that each of the housing units would cost US$ 60,000

He said the project will construct “Green Satellite communities” with roads, schools, clinics, shopping malls and other amenities from the same amount. Hon. Bagbin who said this in an interview with the Financial Intelligence (FI) last Friday therefore wondered why people had chosen to indulge in simplistic analysis of dividing the US$ 1.5 billion project cost by the 30,000 houses to arrive at a $ 60,000 per unit figure, which was not supported by facts on the ground.

He gave the assurance that government knew the pedigree of the company and so made an informed decision in dealing with STX of Korea to provide 30,000 affordable houses for the security services all over Ghana at the cost of US$1.5 billion.

According to him, the international ratings of STX is A- while Ghana had a B+ rating, therefore placing the company miles ahead of other competitors. The minister who was responding to criticisms from a section of the public over the proposed project said government had carried out its due diligence on the company and were satisfied with what they had found out about them. “We have so much experience from the past, so we will not repeat past mistakes,” adding, “the government had taken time to delve deep into the background of STX Korea Ltd.” Mr. Bagbin disclosed that after the initial discussions, government invited the chairman of STX to be quizzed thoroughly by President Mills, and also went to Korea to meet with the Korean Business Association with the Korean Prime Minister present,”

“The Korean president has given us the assurance that his government was solidly behind STX,” Alban Bagbin revealed.

In addition to government’s own due diligence, Mr. Bagbin disclosed that the parliamentary select committee, which included Minority Members of Parliament (MPs) on housing had visited Korea and Dubai to take look at the track record of STX and had been overwhelmed by their expertise. “They are a conglomerate involved in ship building, energy and many other fields with a solid track record,” he added.

He said government’s contribution was to release lands currently in the hands of the security services to STX for the construction, adding that the current houses would make good and economic use of the lands by constructing 4-storied buildings. He said local materials and local expertise will mostly be employed to deliver the houses, disclosing that there were a number of local and foreign companies also engaged in other housing projects.

“The problem with our local companies is that they are not able to access concessionary loans as their foreign counterparts do,” Mr. Bagbin added, lamenting the fact that the current housing needs of Ghana are “120,000 annually, but we are able to provide only 40,000.”

Chief Executive Officer (CEO) of STX Ghana, and Managing partner of STX Bernard K. Asamoah said STX plans to build a number of houses designed to meet all income brackets of Ghanaians, which would include provision of compound houses to those interested.

"STX presence in Ghana would send signals to the investment world to do business in Ghana."

He said South Korean Contractors Association had decided to establish a branch in Ghana, he noted, discounting allegations in the media to the effect that his mother company was bankrupt and could therefore not deliver the housing deal it cliched with Government.

"A company that is broke cannot be listed on Korean Stock Exchange,” he told Xinhua, adding, “STX is Triple A rated company against Ghana’s B-rating. This means that the investment grade of STX is very high.”

He explained that STX was funding the 1.5 billion-dollar project and all that the government of Ghana would do was to guarantee the payment of the contract, which would span 20 year.

He said there is value for money for Ghanaians if the project takes off adding that the College of Architecture and Planning of the Kwame Nkrumah University of Science and Technology (KNUST) had produced a blue print for the project. "KNUST is designing and planning the architectural design for the project and has just completed the first draft. Mr Asamoah said Ghana needs more than one million houses and STX is only providing 200,000.

"This means that any company interested in the housing sector has room to operate. STX produced a proposal to government and won the bid because we have the ability to source funds for the project.

According to Mr. Asamoah, STX has transformed into STX Ghana, meaning the company is not wholly Korean, with HFC bank representing the interest of Ghana in the deal.

"Any other company with strong economic backing or credit rating can do the same under the Public-Private Participation." Mr. Asamoah contended.