body-container-line-1
12.04.2012 General News

Ghana Government To Recover Assets From STX Korea

By Enoch Darfah Frimpong - Daily Graphic
E. T. Mensah - Minister of Water Resource, Works and HousingE. T. Mensah - Minister of Water Resource, Works and Housing
12.04.2012 LISTEN

Government has decided to repossess all assets advanced to STX Engineering and Construction Limited in respect of the construction of 200,000 housing units in Ghana.

Housing Minister, E.T. Mensah said the decision followed a breach of the contract between STX and the Government of Ghana by the Korean company.

The assets to be repossesed according to the Minister, includes 15 land sites dotted across the country which was handed over to STX by the government and the withholding of any benefits that are to accrue to STX, in respect of the sovereign guarantee granted the company by government for the financing process of the project.

The US$1.5billion dollar STX housing project was approved by Ghana’s Parliament in 2010 despite stiff opposition from the minority MPs.

Almost two years after the deal was approved to allow STX to start with the first component of building 30,000 housing units for Ghana's security forces, not a single block has been laid at any of the sites allocated for the project.

This is due to long winding boardroom wranglings between the Koreans (STX Korea Limited) and their Ghanaian partners (G.K. Airport Limited).

Addressing a news conference in Accra Wednesday, on the status of the project, Mr E. T. Mensah said government was ensuring that the interest of Sovereign Ghana was not compromised in any way under the deal.

He said actual grounds work by STX should have started in July 2011, yet nothing has been done as of now.

“Currently there is no binding contact between us. We are taking steps at the Attorney General’s office to tidy up the loose ends. We entered into the deal with clean hands and they have not performed their part of the bargain”.

Asked whether the government would be pursuing STX for other claims for breaching the contract, Mr E. T. Mensah said, “… for now we are taking the lands from them. I don’t want to go into other things since the matter is still in court with regards to changes in shareholdings in the company and other counter accusations of fraud and impropriety among the partners”

“We cannot wait for them to finish in court. We want to make sure that we deliver some houses to the public and are therefore calling on other investors to come on board”.

“If there is any criminality it would be dealt with dispatch afterwards”, the Minister said.

Mr Mensah said the government wants to clear the air now so that people who want to come forward with new proposals could do so.

“We performed our side of the bargain, hence we are free to draw back if the other partner has not performed”.

On the way forward he said, a Housing Project Management Committee has been set up with a mandate to receive and review new proposals on housing as a first step.

He said the committee has come out with guidelines and criteria for selecting potential investors. The criteria include proof of legal existence of investors, company profile, financial capacity, financing terms and technical proposals.

This information, according to the Minister would allow the committee and the Ministry of Finance and Economic Planning to do due diligence before any dealings are initiated.

He said so far the Ministry has received 40 proposals, out of which four have been identified as credible.

The Ministry has initiated negotiations with these four companies, the Minister announced.

He said in due course, government will present to the public the specific steps that are being taken to ensure that the housing required for the security personnel are provided.

“We are not going to deal with anybody on the sidelines, all proposals that come up, we would allow our technocrats to assess them”.

Touching on the affordable housing project started by the NPP administration which has also stalled, the Minister said a task force was looking into it and preparing a report on the way forward.

He said it has come out that some contractors collected monies for mobilisation and have not shown up on site.

He also mentioned that the Ministry had received proposals from some people who want to complete the affordable houses and it was being studied.

Enoch Darfah Frimpong/graphic.com.gh

body-container-line