The Minister of Works and Housing, Samuel Atta Akyea, has told Parliament that the Saglemi Housing project has become a botched one.
According to the Minister, some government officials who were entrusted with state funds amounting to US$159,040,000 to ensure the execution of the project allegedly diverted the money.
The said money, he noted, ended up in those individuals’ pockets, informing the legislature that criminal charges will soon be brought against the culprits.
Furthermore, civil action “shall be used to recover monies lost to the state” moments after an audit meant to provide the government with additional information is concluded.
Atta Akyea’s comments follows a question that was posed to him by the New Patriotic Party (NPP) Member of Parliament (MP) for Nsawam-Adoagyiri, Frank Annoh-Dompreh, at a siting on Thursday, June 4, 2020, on the state of the Saglemi Housing Project and when Ghanaians may have the benefit of it.
Explaining to the lawmakers how the Saglemi Housing Project has become a botched one, Atta Akyea said the State under then President John Dramani Mahama on February 27, 2020, granted executive approval to the MWRWH for the construction of 5,000 affordable housing units by Messrs Construtora OAS Ghana Limited for sale to workers through a mortgage arrangement via Ghana Home Loans.
Messrs Construtora OAS Ghana Limited was to utilize a buyer’s credit of US$200million for the project. The executive approval also permitted the then MWRWH to present to Parliament for approval, the exemption of stamp duties, taxes, duties, levies and other charges relating to the execution of the project.
According to the Minister, the deal received Parliamentary approval on Wednesday, October 31, 2012, with the legislature further approving by resolution on December 1, 2015, the request for waiver of Import Duty, Import VAT, Import NHIL, ECOWAS Levy, EDAIF and other project-related imports amounting to US$40,171,308.21 on materials, equipment and services to be imported and or produced locally under the Agreement between the Government of Ghana and Construtora OAS Ghana Limited.
Furthermore, on January 4, 2013, MWRWH signed an Engineering Procurement and Construction (EPC) Agreement with Messrs Construtora OAS Ghana Limited, to undertake the construction of the housing project at a contract price of US$200million on the land acquisition of the Saglemi Housing Project.
However, on February 27, 2020, the then Minister for Water Resources and MP for Asutifi South, Works and Housing, Collins Dauda, according to Atta Akyea, on his own motion, “rubbished the parliamentary approval and reviewed the original agreement and signed his own First and Restated Agreement with Messrs Construtora OAS Ghana Limited to downsize the number of houses to be constructed to 1,502 units with the same contract sum of US$200million.
“Rt. Hon. Speaker, on the 21st day of December, 2016, 14 days after President John Dramani Mahama has lost his position in the elections, the then Chief Director, Alhaji Ziblim Yakubu, and the Contractor, reviewed the first amended and restated agreement and signed the Second and Restated Agreement, in which the scope of the works were reduced to 1,024 instead of the parliamentary approved 5000 housing units, 388 to be finished completely externally and 90 unites to be left at foundation or lintel levels. This brings to total units to be constructed to 1,502 units at a revised contract sum of US$181,519,000”, he noted in his address to Parliament.
He added “on the 31st day of July, 2017, the Chief Director of the Ministry of Works and Housing, reviewed the Second amended and restated agreement and signed the Third Amendment and restated EPC Agreement. This was to extend the period to December 2017, to allow the contractors complete the project. The scope in the Second and Restated Agreement was maintained but the contract price was reviewed further downwards to US$181,018,000”.
With Collins Dauda and the Chief Director having no authority to amend the agreement as approved by Parliament, an amount of US$80million, representing 40% of the contract sum was paid as mobilization to the contractor by MWRWH, according to Atta Akyea.
“Immediately the sum of US$80million was released to the contractor, when the actual work had not started, the contractor transferred abroad US$40million. I submit that the seed of bankruptcy of the Saglemi Housing Project was sown by this dubious Act. This racket was so strong that the Ministry did not demand a performance bond as necessary prerequisite before the release of US$80million”, Atta Akyea told the lawmakers in his submission.
The contractor, the Minister added, started actual construction works at the project site in early 2014 and only delivered 636 housing units, which he described as “unfit for human habitation because the necessary amenities like water and electricity have not been fixed and the entire project lack on-site infrastructure, especially a drainage system”.
A total of 388 housing units, he added, are at various stages of completion.
Despite the review in the units to be delivered, a total amount of US$195,854,969.52 was released by the Ministry of Finance out of which the contractor received US$179,904,757.78 out of the reviewed contract sum of US$181,081,000, representing 99.39%.
“Mr. Speaker, for the purposes of argument, let us credit the contractor with having constructed 1,024 housing units. Holding all factors constant, that translates into US$40,960,000 given the fact that the contract sum of US$200,000,000 was to roll out 5000 housing units. Mr. Speaker, the contractor has misappropriated the sum of US%159,040,000”, he explained.
He further told the House that the said contract has lapsed, according to the opinion of the Attorney-General delivered on May 8, 2019.
“The Attorney-General asserts a strong position in law that all the contracts purported signed by Hon. Collins Dauda, MP and thereafter some wayward Chief Directors after the original contract had received parliamentary approval, are void ab initio and have no legal consequence.