Minority demand documents on STX housing deal

Accra, July 15, GNA - Members of Parliament (MPs) on Wednesday could not reach a conclusion on the debate over adoption of a Suppliers Credit Financing agreement between the government of Ghana and Korean company, STX Engineering and Construction Ghana Limited,
The discussion was thus suspended till Thursday, July 15, 2010.
A heated debate which originated from the Minority argued that the off-taker document must be made available to all members to appreciate the contents before they ventured into its ratification.
A report by the Finance Committee stated that over the next five years 200,000 housing units to be built in all the ten regions in Ghana, 45 per cent of which the government would become an off-taker to meet some of the accommodation needs of security services in the country.
The report stated that Home Finance Company would become an off-taker, a mortgage finance provider of the remaining 55 per cent.
STX Company is to provide government with an amount of $1,525,443,468.00 for the construction of 30,000 Units of houses out of 90,000 units as duty post for security agencies representing 45 per cent as off-taker agreement between government and the STX company.
The estimated cost of the overall project is 10 billion US dollars.
The terms and conditions of agreement include, total contract amount up to 1,525,443,468 US Dollars, Grace period of five years, Repayment period of 15 years (semi annual payments), Maturity period of 20 years, Interest rate 2 per cent fixed annum, arrangement fee, 0.75 flat, management fee of 0.5 flat and grant element of 36.93 per cent.
Mr Cletus Avoka, Majority Leader, however, said he was surprised at the stand of the Minority because there was a consensus among them about how the debate would be approached.
He said government was very transparent with the deal and was not hiding anything.
Papa Owusu-Ankomah, member for Sekondi, said he was disappointed about the comments of the Majority leader.
He said if he continued in this way he would retard the progress of the business of the house.
The Chairman of the Finance Committee, Mr James Klutse, put forth the motion and was seconded by Mr David Tetteh Assumeng, member for Shai Osudoku
The committee's report noted that a letter from the Korean Ambassador to Ghana indicated that the Korean government had identified Global Infra fund as part of sources from which the Korean government was supporting the STX group which is providing the finance and was partnering STX Ghana for the project.
The report also stated that the group's current financial standing was over 25 billion US Dollars turnover per annum and it was eligible to obtain any credit facility without Korean government support in Korea and any part of the world.
It said, "it is particularly so when the repayment is well guaranteed by the government of Ghana, which was a pre-requisite for acquiring credit facility for project.
The amount and the sources of funding however generated a heated debate between both the minority and the majority.
Dr Anthony Osei Akoto, member for Old Tafo, argued that it was not clear if STX was a finance company and if not how was it going to provide the amount, adding that World Bank indication was that the financing of the project was not legally binding on the World bank and that he was a member of the committee but had made reference to any joint agreement and moved that it should not be adopted.
Mr Alban Sumana Bagbin, Minister for Water Resources, Works and Housing, said the report before the house was a draft adding that all feasibility studies on the project had been carried out and was now awaiting members' approval to start the project.
Mr Seth Terkpeh, Deputy Finance Minister, said that the nature of business of STX included project finance and infrastructure and was therefore the lender in this deal.
Mr Joe Ghartey, member for Esikadu/Ketan, said certain portions of the draft was blank and had not even been signed and urged members not to adopt it.
Mr Joe Adjaho who could not rule on the issue decided to suspend the debate.