Bagbin: NPP is jealous of STX deal

Dr. Akoto Osei (left), Hon. Alban Sumani Bagbin (right)

THE MINISTER of Water Resources, Works and Housing, Hon. Alban Sumana Bagbin has described the approach of the opposition New Patriotic Party (NPP) to the STX Korea Housing deal as 'naked jealousy'.

He also accused the party's minority in parliament of creating fear among the public, even though they were part of a delegation, which was led by Vice President John Mahama to see practical examples of how a similar project was implemented by STX in Abu Dhabi and further assess its capacity and quality of work.

He further explained that the first foreign trip included a delegation of some Members of Parliament from both sides of the House and the private sector, to hold discussions with the STX Group.

Hon. Bagbin, however, expressed shock at the turn of events, noting that the same NPP delegation, which came back to the country from their Abu Dhabi trip with high praises for the Korean construction firm, could now engage in what he described as double talk.

Addressing journalists at the usual meet-the-press series at the Ministry of Information in reaction to issues surrounding the infamous STX housing project in Accra yesterday, he said it was unfortunate that the bold decision taken by the National Democratic Congress (NDC) to manage the nation's enormous housing deficit, using STX Korea's $1.5 billion housing project was being down played.

According to the sector Minister, he was amazed at the strenuous efforts by some members of Parliament, especially from the opposition NPP to needlessly demonize this very important national project, which could serve as a boost to the economic development of the country.

The inclusion of the Minority in all the trips, as stated by Hon. Bagbin, was to amplify the transparent governance promised by the President Mills led government, and to allay the fears of the Ghanaian populace.

Hon. Bagbin therefore questioned why the Minority MPs were now opposing the STX housing project, after showering profound praises.

He stated that Article 181 of the 1992 Constitution enjoins government to obtain Parliamentary approval of the terms and conditions of a loan before they could come into force.

He disclosed that the terms and conditions of the STX housing project were laid before Parliament since May 4, this year, through the select Committee on Finance for consideration and subsequently report back to the house.

The Minister argued that the committee was not only made up of NDC MPs but also members from the minority side.

They were then given the necessary documentations relating to the project, as part of the deliberation process.

The Minister noted that at the end of the committee's work, both members of the political divide agreed on a consensus report and recommended the approval of the $1.5 billion Suppliers Credit facility by Parliament.

He said, 'one might, therefore, ask what then went wrong'? 'Why were the report of the committee and the motion withdrawn from the debating floor?'

Giving reasons for the withdrawal, the Minister pointed out that when the debate commenced on the adoption of the report and the subsequent approval of the terms and conditions of the loan, some members, notably Hon. Anthony Akoto Osei and Hon. Joe Ghartey reiterated some of the concerns that had been deliberated upon at the committee meetings, and agreed on consensus.

He outlined references to the STX Engineering and Construction firm as a lender, over securitization of the loan, the waver of sovereign immunity, the waver on taxes and other terms of the draft Suppliers' Credit agreement as some of the concerns raised.

Referring to a similar deal, Parliament, according to Hon. Bagbin passed a Suppliers' Credit agreement between the government of Ghana as the 'borrower' and China International Water and Electric Corporation, as the 'lender' for the supply and installation of materials and equipment under the self -help electrification programme.

He said the lender being the China International Water and Electric Corporation was not a financial institution, but agreed to lend to the borrower, which is the government of Ghana, an amount of $81.0 million.

According to him, current data indicated that the country's housing deficit stood at about a million housing units and that during the 2000 Population and Housing Census, less than one-half were classified as houses, out of the four million housing units recorded in the country.

As much as 58 per cent of the houses, the Minister continued, were of poor quality and made of mud, laterite brick, wattle and daub, and earth.

He said over 74,000 kiosks and containers were used as houses while about 50 per cent of the Ghanaian populace slept in single rooms and the statistics, he admitted, were not any better in 2010.

In frantic efforts to tackle these housing deficits, Hon. Bagbin indicated that 'we have been working with a number of investors both foreign and local to help provide secure, decent and reasonably priced housing for the Ghanaian people.'

In addition, he said his outfit had so far signed Memorandum of Understandings (MoUs) with several foreign and local investors including Messrs Goodwill International Group of Companies, which is to build 14,360 affordable housing units of various kinds to be distributed in all the regional capitals.

Others include Messrs Agu Resources Ltd., a local company in partnership with African-Asian Financial and Properties Holding Company LLC of USA, Messrs Italconstruct International Ltd. and, Messrs Swiftforms Systems Ltd., the State Housing Company Ltd.

'In all, a total of about 145,800 safe, decent and low-income and affordable housing units of various types are to be constructed and delivered by th ecompanies mentioned above,' he noted.

The STX Engineering and Construction Ghana Ltd., is expected to erect 200,000 housing units out of which government is committed to taking 90,000 units.

On completion, 30,000 would be released to the security services and 60,000 for public servants while the remaining 110,000 units would be offered to the general public via the housing market.

Hon. Bagbin said the cost of construction and insurance is valued at $1.5 billion with a two per cent flat interest rate. 'The first repayment will fall due after the 30,000 housing units have been provided.

The remaining balance will be paid by installments in the next 15 years, after the first payment. More importantly, there is a grant component of 36.93 per cent, which translates to about US$480m,' he explained.