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Business News of Wednesday, 6 July 2011

Source: GNA

Barclays bank leads consortium to finance STX housing project

Accra, Jul, 5, GNA- Water Resources, Works and Housing Minister Mr Alban Sumana Bagbin on Tuesday said Barclays bank was the syndicating financial institution leading a consortium of banks to finance the Ghana's STX housing project. The project which sod cutting ceremony was performed in January 27, 2011 would commence fully at the end of July 2011, according to the minister.

Mr Bagbin was responding to strings of questions during questions' time in Parliament on the famous STX Housing project. Ms Cecilia Abena Dapaah, NPP member for Bantama, had asked the minister to brief the House on the status of the execution of the STX agreement.

The Ghana Government and Management of Korean Construction Firm STX, signed two agreements for the construction of 30,000 housing units for the first phase of a proposed 200,000 units for the next five years. The agreements are Suppliers' Credit and Engineering, Procurement and Construction (EPC).

The Minority members who have dismissed the housing agreement as a bad deal, crowded the minister with many supplementary questions especially on the source of funding, the amount spent so far, the amount in the dedicated account and the issue of sovereign guarantee. He said there were three companies involved in the project 96 the STX Engineering and Construction GH Limited as the parent company holding a share of 10 per cent and STX Korea 90 per cent share holder and that Ghana Airports that hold no share.

On the local content, the Minister said the 10 per cent local provision and the 90 per cent labour would be strictly adhered to. Asked why the project delayed, Mr Bagbin said many administrative bottlenecks cropped up and delayed the project especially seeking permission from the Environmental Protection Agency. When asked what were the legal difficulties that arose and how they were resolved, he said there were no legal difficulties apart from the Attorney General requesting for the agreement to make inputs as the legal officer of the government.

He said the NPP Affordable Housing project which was still on its knees also delayed so many months after sod cutting before it finally took off. He said the NPP Affordable Housing project was funded by the HIPC fund of GH C40,000.00 but was not completed adding, they also came to Parliament for another GH C30,000.00 but the project was only 60 per cent complete. The Minister announced to the House that the rivalry between the Chief Executive Officer and the Koreans was over as the legal tussle was dropped and attempts by Ghanaian counterparts to convene a board meeting to prevent the Koreans from sacking him were all resolved.

When asked who the sovereign guarantee was handed to and what was the value, the minister said, it was handed to STX. "The Ministry of Finance and Economic Planning has on behalf of the government of Ghana issued the Sovereign Guarantee and made the necessary arrangements for the transfers of the money," he said. He noted that: 93A dedicated account has also been opened at the Bank of Ghana for the necessary transactions." He stated that the project would start in Accra at Burma Camp, Air Force Base, Tesano and some other places adding, 4720 houses would be completed first as directed by the President John Atta Mills. "STX Engineering and Construction GH Limited per their programme of implementation will start land preparation this July and are currently mobilizing to send equipment to the sites," he said.

Mr Bagbin told the House that after the approval by Parliament of the various agreements on the National Housing project, the Ministries of Finance and Economic Planning, Justice and Attorney General and Water Resources Works and Housing in collaboration with the Parliamentary Service duly executed the programme.

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