Saglemi Housing: Contractor misappropriated US$159m - Atta Akyea discloses

The Minister of Water Resources, Works and Housing, Samuel Atta Akyea has said Messrs Construtora OAS Ghana Ltd, a Brazilian company which was awarded the contract for the Saglemi Housing Project near Old Ningo in the Greater Accra Region, has allegedly misappropriated an amount of US$ 159 million.

The Minister made the statement whilst answering a question by Hon Frank Annoh-Dompreh MP for Nsawam/Adoagyiri who wanted to know the state of the Saglemi Housing project and when Ghanaians will benefit from it.

Hon Atta Akyea said the ministry of Water Resources, Works and Housing (MWRWH) on 4th January 2013 signed an Engineering, Procurement and Construction Agreement with Messes Consrutora OAS Ghana Ltd to construct 5,000 affordable houses at a contract sum of US$200 million, after Parliamentary approval granted on 31st October 2012.

However, the Minister said the then sector Minister, Hon Collins Dauda by his own authority reviewed the agreement with the Brazilian company to reduce the number of houses to be constructed to 1,502 housing units at the same contract sum of Ghc US$200 million.

"On the 21st day of December 2016, 14 days after President John Dramani Mahama has lost his position in the elections, the then Chief Director, Alhaji Ziblim Yakubu and the contractor reviewed the first amended and restated agreement and signed the Second and Restated Agreement in which the scope of the works were reduced to 1,024 instead of the Parliamentary approved 5000 housing units, 388 to be finished completely externally and 90 units to be left at foundation or lintel levels. This brings the total units to be constructed to 1, 502 units at a revised contract sum of US$ 181, 519, 000," Samuel Atta Akyea added.

He also said the Chief Director of the Ministry of Works and Housing reviewed the Second amended restated agreement and signed the Third Amendment and Restated EPE Agreement to extend the period to December 2017, to allow the contractor complete the project.

According to the Minister, the scope in the Second and Restated Agreement was maintained but the contract price was reviewed further downwards to US$181, 018, 000.

Hon Atta Akyea said as soon as the ministry released a sum of US$80 million to the Brazilian contractor for mobilization when actual work had not started, the contractor transferred abroad US$ 40 million, which according to the minister led to the bankruptcy of the Saglemi Housing project.

"In accordance with articles 35 (7) of the Constitution, the Akufo-Addo government pledges to complete the botched Mahama Saglemi Housing project. When we surmount these challenges, we can positively inform this August House as to when my ministry will deliver the 5,000 housing units with full amenities for the benefit of our hard-working workers," the Minister stated.

He said currently the contractor has completed only 636 housing units without water and electricity and 388 other housing units which are at various stages of completion.

The Minister said total payment made by the Ministry to the contractor till date amounts to US$ 179.8 million. He said a value - for - money audit is being carried out on the project by the Ghana Institution of Surveyors after which civil action shall be used to recover monies lost to the state.

The Speaker of Parliament Rt Hon Prof Aaron Mike Oquaye referred the matter to the Joint Committee of Works and Housing and the Committee on Legal and Parliamentary Affairs of Parliament for consideration and submit a report in two weeks to Parliament.