STX Housing Project in Danger

Posted on: www.dailyguideghana.com

By William Yaw Owusu

Thursday May 2, 2011.
The controversial STX Housing project which sparked intense debate before deal was approved by Parliament appears to be stalling as the Ghanaian and Korean partners virtually trading punches.

The partners are battling it out in court over the sourcing of funds for the project, while the government panics as the dream of building the supposed 30,000 houses for the country security agencies fizzling out.

The National Democratic Congress (NDC) government reached an agreement with STX Engineering & Construction Limited, Korea through its subsidiary in Ghana for the construction of 200,000 houses in Ghana within a period of five years estimated at $10billion and in August 2010, parliament approved an initial off-take agreement for 30,000 housing units for the security agencies at a proportionate cost of $1.5 billion.

However, the sources of funding for the project as well as the alleged attempt by STX Korea to remove the Ghanaian Directors from the company has cast serious doubt on the take-off of the project, five months after the ground breaking by President Atta Mills amidst fanfare.

STX had promised to bring the money from Korea as captured in the agreement, but that has not happened, leading to the government and the local partners to look else where for cash.

According to DAILY GUIDE sources, the sovereign guarantee issued by the Ghana government to STX to enable it to raise loan has allegedly been given to B.K. Asamoah, the man who facilitated the deal to source for funding in financial market without reference to the Koreans.

This side stepping is what has infuriated the Koreans, prompting them to go to court to dismiss the Ghanaian directors.

Even though the government is trying feverishly to make things appear as if all is well with the project, as Minister of Water Resources, Works and Housing, Alban Bagbin says the parties have been spoken to.

When Mr. Bagbin was asked by Joy FM about additional sources of funding for the project he simply said “the money is available so it is not an issue of funding. I won’t disclose the source of additional funding but the money is coming into our account at the bank of Ghana.”

He continued “there is no difficulty in sourcing funds. Funds have been sourced and the Ministry of Finance and Economic Planning can confirm that money is available.”

Mr. Bagbin said since the Bank of Ghana issued sovereign guarantee to cover the project, there is mad rush by banks to provide financial support for the project.

He also said the government is committed to the project saying “it is government’s project and not STX project. Government definitely has a plan B to continue with the works the parties are in court we can deal with the technical team.”

He said the problem between the directors was as a result of breakdown in communication and that government had another strategy to ensure that the project still continues even if the standoff is not resolved on time.

B.K. Asamoah is credited largely for bringing about the STX Korean deal that the Mills administration is hoping would provide accommodation for many Ghanaians but sensing that the Koreans are planning to remove him from the company through emergency board meeting, he went to court in Accra to stop the move.

In the motion, Mr. Asamoah wants the court to declare as illegal and wrongful, notices of an impending extraordinary meeting where he and another Director, J. B. Asafo Boakye would be dismissed.

Recently for instance, Danquah Institute (DI), a policy analysts group raised red flag over the implementation of the project because of what it calls “the government’s ambiguity, changes and re-arrangements with sources of funding of the project”.

A fellow at IMANI Ghana, Kofi Bentil has also challenged Bagbin’s claim that there is funding for the project and stated that evidence available clearly showed that there is no funding for the project.

He further challenged the Minister on Joy FM to come out with the details of the names of organizations which have provided the money and the amounts involved.
He said such details should not be concealed and treated as though it was a national security matter.

He reiterated his belief that the STX project is a misplaced priority which government should have avoided.

According to him, money for the project will be of better use if channeled towards solving the perennial water problems the nation faces.