General News of Tuesday, 11 September 2012
Source: Daily Guide
A Nigerian businessman at the head of the repackaged $200 million housing project, a replacement for the ill-fated STX Korea initiative, is at the centre of a litany of corruption-related cases in a number of states in the northern and southern parts of the oil-rich country.
Snecou Group of Companies has been contracted by the Ghana Government to construct 4000 houses at the outrage cost of $200million, and a Parliamentary approval has been sought, even though the company has a dodgy background.
Minister of Water Resources, Works and Housing, E.T. Mensah laid the documents in Parliament last Friday.
A top-notch policy advocacy grouping, Imani Ghana, made the disclosure over the weekend in a statement raising objection to the deal, especially against the backdrop of the shadowy background of the chairman of the Snecou Group of Companies, Prince Nicholas Uwachukwu.
The Snecou chairman reportedly used four of his companies to loot $40 million belonging to the northern state of Nasarawa, Imani cautioned Ghanaians, especially the authorities.
Besides the shadowy integrity of the Nigerian group of companies, the unit cost of the houses, according to Imani, was exorbitant and therefore not in the economic interest of the country.
“Clearly, the average cost of a unit ($77,000) is exorbitant in this scheme of things. In cost terms, the deal is worse than the STX one,” Imani stated. The advocacy grouping pointed out that while it supported ventures which were in the interest of the nation, it stood for “the judicious use of public resources, and a greater commitment to due diligence on the part of public purse holders”.
While referring to the Order Paper already laid before the current session of Parliament, Imani pointed out that “it should not have advanced from committee level in the first place much less laid before the full House.”
According to Imani, the report of the Joint Committee on Finance and Works & Housing which referred to a Supplier’s Credit Agreement between the Government of Ghana and the corruption-enveloped Snecou Group of Companies, as well as details of the project, was the same instrument used to design the ill-fated STX deal.
By the terms of the deal, Imani explained, Snecou would raise $77.3 million for the construction of 1000 houses for the police and military as government settled the emanating debt.
Imani pointed out that “in October 2010, the Economic & Financial Crimes Commission (EFCC) of the Republic of Nigeria indicted the Chairman of Snecou, Prince Nicholas Ukachukwu, of using four of his companies to loot $40 million of public funds belonging to the State of Nasarawa. The 171-count charge (charge sheet – FHC/LF/CR/8/2010) preferred against Prince Ukachukwu in the Federal High Court in Lafia contains several references to Snecou. The EFCC accused Snecou and its Chairman of collecting huge sums of money from the state for various projects and failing to execute. In total, $80 million of embezzled funds were evidenced in the report.”
In another southern state of Bayelsa, the group of companies has been cited in a number of multi-million dollar abandoned projects. “Similar concerns have been raised about Snecou in connection with billions of Naira in construction contracts in Bayelsa state. In one case, Snecou won a contract to build a hospital valued at $120 million in the state. After huge payments had been made to the company, the project was finally abandoned,” Imani posited.
The advocacy grouping, in view of the foregone, counselled that the report, now before Parliament, be returned to the committee for the appropriate diligence to be conducted into the background and track record of Snecou and its chairman, Prince Ukachukwu.
Turning to a Buyer’s Credit Agreement between the Republic of Ghana and Italconstruct Limited, a local real estate company, for the supply of 4000 houses at a cost of $200 million, the terms of the offer did not improve on the one made by STX, according to Imani.
“At $50,000 base cost per unit, it is likely that the final price per unit will hit $60,000 or more. This is considerably above the ministry’s own threshold of $10,000 for affordable housing in Ghana.”
Imani pointed out that Italconstruct offered two-bedroom houses for sale on its website at just a little above $25,000 and therefore wondered why “the company should be quoting more than $50,000 per unit for a large-scale project whose capital costs are being fully underwritten by the state”.
DAILY GUIDE has been reliably informed that the affordable houses initiated by the Kufuor-administration had been sold out. An anonymous person told DAILY GUIDE that “when I went to the Works and Housing Ministry to make an enquiry, a notice was pasted to that effect.”