Ghana@50 Mansions: Defaulters in Trouble

GOVT TO PURSUE DEFAULTERS

The government would soon pursue defaulting private developers and purchasers of the mansions that were built during the Ghana@50 celebrations for sums due to and owed government with interest.

The action by the government is in response to the findings of the Ghana@50 Commission of Enquiry that recommended that the government must take over the mansions.

The Ghana@50 Planning Committee and the Secretariat, with a loan arranged between the Social Security and National Insurance Trust (SSNIT) and the African Union Development Consortium Limited (AUDCL), constructed 30 identikit mansions for the celebrations at La Wireless and the Cantonment in Accra. The government also accepted the Commission’s recommendation that it has to recover the sale of the remaining mansions: the value of the of the land, which in 2007 was valued at $75,000.00 per plot, totaling $ 2,250.000.00, for the 30 plots, as well as the amounts expended by the government on the project, which totaled as much as GH¢8,288,452.12, as well as GH¢983,716.80 owed to contractors, consultants and suppliers in respect of the La Wireless, Cantonments projects and also the cost of the furnishing totaling GH¢5,604,153.40.

The government, by a whitepaper, accepted recommendation by the Ghana@50 Commission of Enquiry to the effect that the ban on the issue of leases at La Wireless and Cantonment should be lifted and requested the Lands Commission to prepare leases in favour of private developers and lessees who prove full payment of rent payable to government in respect of their respective leases, in the absence of a court injunction against the government on the site. The government stated that it accepts the recommendation by the Commission that the actions of Dr, Charles Wereko-Brobby, Chief Executive Officer of the Ghana@50, and Mr. Kwadwo Okyere Mpiani, Chairman of the National Planning Committee of the Ghana@50, amount to contempt of Parliament because the loan was obtained from SSNIT and AUDCL without Parliamentary approval.

However, the government accepted the recommendation of the Commission that Dr. Wereko-Brobby and Mr. Mpiani should be pursued for causing that loss, because considering the terms and conditions of the loan from SSNIT and the arrangement between AUDCL and the Ghana@50 Secretariat, it is unlikely that the government can recover the amounts and this would amount to a loss to the state.

The Commission, in its findings, observed that in view of the poor financial status of government and the financial problems that were encountered, particularly in timely payment of contractors on the project, the decision to construct the identikit mansions was an imprudent one.

The Commission observed that government is the appointing authority of the managers and trustees of SSNIT funds and that government, as the trustee, should not have appropriated the loan it arranged between SSNIT and AUDCL. “This conduct is contrary to all well known principles of Law of Trusts which require the trustees to jealously guard the interest of the beneficiaries and not seek any personal benefit from the trust funds,: it stated.

According to the Commissions findings, the loan to AUDCL from SSNIT, as at the end of July 2009 had risen to GH¢12,029,695.44 inclusive of interest, and it is still rising.

The Commission observed that certain lands at North Ridge owned by SSNIT were taken over by the AUDCL for the construction of presidential mansion. SSNIT failed to negotiate and agree on the price of the land before allowing AUDCL to take possession as required of a trustee, SSNIT therefore failed to protect the interest of the beneficiaries of the trust fund.

The government, by the whitepaper, also accepted the recommendation of the Commission to direct SSNIT to take immediate steps to enforce the default clauses in the agreement executed with AUDCL and its guarantors.

According to the Commission’s findings, 15 of the 30 mansions have been sold at GH¢8,250,000.00 per unit. Out of the sum, an amount of GH¢4,350,000.00 has been received.

“The proceeds have been appropriated by the Secretariat and a portion used to pay some of the debts owed to contractors, suppliers and the consultants. GH¢2,000,000.00 of the sum was paid to the AUDCL which in turn paid it to SSNIT as part payment of the loan.

“The AUDCL has taken over the remaining 15 mansions at La Wireless, Cantonments and commissioned Messrs. Amalgam Consult to renovate them at a cost of GH¢20,000.00 per mansion, the estimated cost as at April 2009, to sell each mansion at $600,000.00 for a commission to recover the sums due and owing by purchasers of the mansions.

“Payment of commission to Amalgam Consult will increase the costs of the project thus reducing government’s income from the sale of the mansions,” the Commission observed in its findings.

The Commission observed that Margins Suppliers Company Limited (MSC), one of the purchasers of the mansions, sued government over a debt of GH¢2,705, 186 owed it for the supply of calendars for the Ghana@50 celebrations.

The MSC took over four of the mansions in lieu of the debt owed to it by the Secretariat. The MSC paid a deposit of GH¢100,000.00 for each of the four mansions and unilaterally took over a fifth one the price of which stands at $600,000.00. The debt outstanding for the four is GH¢1,800.000.00. The government has negotiated a settlement with MSC for the payment of the calendars and has paid MSC an amount of GH¢4,009,401.62.