Over US$200m Saglemi Housing Project
The Akufo-Addo government, is preparing the minds of Ghanaians to embark on another criminal trial of appointees of the John Mahama administration, over the 5,000 Saglemi affordable housing project, started by the previous government.
After several weeks of media reports, radio and TV appearances by the Minister of Works and Housing, Samuel Atta Akyea to get Ghanaians to appreciate that there is something wrong with the project, an advice by the Attorney-General calling for criminal investigations, has emerged, setting the stage for a possible criminal prosecution.
The project began during the tenure of Alhaji Collins Dauda and his deputy, Sampson Ahi.
Already, Mr Atta Akyea, has interestingly distanced himself and hanged the Chief Director of the Ministry of Works and Housing, Alhaji ZiblimYakubu, over some payment made to the contractor of the project, Constratora OAS Gh. Ltd.
The payment happened under Mr Atta Akyea as Minister. Indeed, there is a video of an interview he granted, whiles touring the Saglemi project in 2017, praising the project to the heavens.
During, the visit to the Saglemi project site, Atta Akyea, had expressed satisfaction with the quality of work done and vowed to further engage the company for more housing projects in Ghana.
Many, are, however, shocked to hear now hear him, describing the same project as a scam after the Minority National Democratic Congress (NDC), complained about the delay of the project.
Interestingly, aside the criminal investigations, the Attorney-General, is advising the Ministry of Works and Housing to reject a contract termination request by the contractor, saying the contract, cannot be terminated, because the contract had already expired in 2017, rendering the contractor’s request null and void.
To start with, only 1,412 houses, have been completed within the duration of the contract from January 3, 2014, to June 2017.
The agreement approved by Parliament, according to the Akufo-Addo government, has also been varied several times. First on February 27, 2014, nearly two months into the contract, the number of houses to be built was now stated as 1,502 houses.
The next amendment would come on December 21, 2016. This time the 1,502 houses were to be built in three different stages.
In all the variations, one thing remained unchanged. The cost of the project – $200million.
By the time government changed hands in January 2017, the contractor had been paid $179.9m. Even the revised target of 1,502 was not met, according to the Akufo-Addo government.
Constratora OAS Gh. Ltd has written to government expressing disinterest in continuing the project. It is now only interested in compensation for unfulfilled government obligations.
In a March 8 letter, the Directors of the company, Charles Maia Galvao and Ricardo Rocha Ulm da Silva, said they suffered from additional costs after government variations to the constructions.
The additional costs were the result of the disruptions caused by tax exemptions not fully conceded by government which eventually caused delays in project execution.
But government has been advised to rather seek compensation from Constratora OAS Gh. Ltd.
The letter from Attorney-General read in part that the Ministry may seek “refund of all overpayments as well as interests subject to the conduct of value-for-money-audit.”
It is not immediately clear how much government may request in compensation or how much the contractor will demand in compensation.
Accra-based Joy FM reports citing a document signed by Attorney-General and Minister of Justice, Gloria Akuffo, said all the variations in the original agreement did not have Parliamentary approval and could not have been legally binding.
She also faulted the Chief Director at the Works and Housing Ministry, AlhajiZiblimYakubu, for approving the variations without authorization by the Minister as provided by State Property and Contracts Act.
The A-G said it had received no valid explanation for the contract variations and noted crimes may have committed in the government-financed scheme to make housing affordable.
She has advised that the controversial project be referred to criminal investigations organs of government.
Another housing project contract has ended with buildings uncompleted.
Under President John Agyekum Kufuor, a similar project, began in 2006 and was to be completed by December 2007 at a cost of $300m.
There were several other project sites, Kumasi in the Ashanti region, Koforidua in the Eastern region, Borteman and Kpone in the Greater Accra region.
Some 1,640 low-cost housing units, were to sit on 300 acres of Kpone land. The works on the two other sites, were to bring the total housing project to 4,700 units.
Funds for the project from the Social Security and National Insurance Trust (SSNIT) as well as HIPC funds for the project have run out.
It is reptiles and squatters, who have run in since a change in government in 2009.The Mahama government, did not continue the project. It started a new one.
The new one has come to a standstill. But government has secured $51m to now complete the old one started under Kufuor administration.
The housing deficit was thought to be around 500,000 housing units. It is now believed to be 1.7m.
Meanwhile, people familiar with the project have discounted the Minister’s claims.
Firstly, they insist that his claim that Parliament, approved an amount of $200 million for the development of 5000 housing units, which was later reduced by Collins Dauda to 1502 housing units without Parliamentary approval is mischievous.
His assertion that the Escrow Management Agreement provided for an amount of $200 million to be used to develop a total of 5000 housing units also is false.
According to them, it is instructive to note that, the expression which was used in the agreement is; up to 5000 units. In other words, the loan amount of $200 million approved by Parliament was for the development of up to 5000 units and not 5000 units as Atta Akyea is suggesting; saying that “5000 units” and “up to 5000 units” are not the same.
Fact is, $200 million is inadequate to construct 5000 housing units with road infrastructure and other amenities. This is the reason the project was divided into 3 Phases and with the main idea of using proceeds from the sale of Phase 1 for Phase 2 in that revolving manner. Therefore the loan amount of $200 million approved by Parliament was not meant for all the 5,000 housing units at a go. Rather, it was to commence the process of developing *up to 5000 housing units*. This is why the loan facility agreement and the escrow management agreement used the expression *up to 5000 housing units*
*Thus, the decision of the NDC government to develop 1502 housing units with the sum of $200 million under phase one is in line with what Parliament approved. As a matter of fact, both the local and foreign consultant for the project, i.e. AESL and VHM worked on and approved the detailed cost breakdown and designs for the project.*
According to them, there are facts to show that, the Akufo-Addo government paid an amount of $5.6 million to OAS, the contractor of the project in March 2017.
The queried “the question is, if the Saglemi contract is a scam and Ghana has been shortchanged, to the tune of $140 million as claimed by Atta Akyea, why did he pay $5.6 million to the contractor in March 2017? Doesn’t fraud vitiate all?
In short, the erstwhile NDC Administration did nothing wrong in the award and execution of the project. The 1502 units we commenced under Phase 1 of the project is within the remit of what was approved by Parliament *(up to 5000 units)*. Phase 1 is 90% complete according government’s own consultant, RMS.
Under the contract, the provision of electricity, water etc. to the site is the obligation of government and not part of the scope of work of the contractor. Government and Atta Akyea must stop the lies and blame game and focus on ensuring that this is done to complete the project and make the facility habitable.
In short, Ghana was not shortchanged in the execution of the Saglemi Housing Project as claimed by the minister, adding Atta Akyea, simply lied.
They reveal that documents, including the Escrow Management Agreement and the final report of the consultant, RMS, submitted to the Ministry in February 2018, on are the project, are there to show that there is nothing wrong with the project.