Additional US$32million required to complete Saglemi Housing project

AUDIO: Additional US$32million required to complete Saglemi Housing project

Kweku Zurek Apr - 27 - 2021 , 14:11 5 minutes read

The Ministry of Works and Housing has said it will require about US$32 million to complete the abandoned 5,000-unit Saglemi housing project started by the previous government.

It said a technical audit by the Ghana Institution of Surveyors (GIS) of the project, which initially had an output target of 5,000 units at a total cost of US$200 million, had estimated that additional funds would be required for its completion.

Addressing a press briefing in Accra yesterday, the Minister of Works and Housing, Mr Francis Asenso-Boakye, said the unavailability of water and electricity had limited the utilisation of the housing units.

"Although the financing of the project had largely been exhausted, an initial technical audit by the ministry revealed the key primary infrastructure still outstanding includes water supply and electricity,” he said.

Rising cost

According to Mr Asenso-Boakye, the original output target of the Saglemi project of 5,000 units at a total cost of US$200 million, as stipulated in the financing agreement presented to and approved by Parliament, had surreptitiously and drastically reduced to 1,502.

Of that number, 1,389 units had been completed, without a commensurate reduction in the overall loan financing.

He said currently, an amount of approximately US$197 million, representing 98 per cent of the financing cost, had been expended on 1,502 units, as against the planned 5,000 units.

"The ministry tasked the GIS to conduct a cost and technical audit of the contract executed by the contractors in the context of the variety of agreements and commitments made by the parties to the project. Upon completion of the audit, the GIS estimated that an approximate amount of $32 million would be needed to complete the project," he said.

The minister indicated that he had directed the Architectural and Engineering Services Limited (AESL), an agency under the Ministry of Works and Housing, to validate the report of the GIS and "advise accordingly".

Validation timelines

When quizzed on why he had commissioned the AESL for another report on the Saglemi housing project, given that his predecessor (Mr Samuel Atta Akyea) had commissioned a similar report, Mr Asenso-Boakye said that report "was done some time ago, and it has time implications, so we did this just to validate it and make sure that everything is on point before you proceed".

He added that the AESL report, which he expected in a month's time, would decide when the ministry would begin raising funds to complete the project and when contractors would return to the site.

"After receiving the report, we will know the next line of action to take; basically to raise the financing to resume work on the site. So it is difficult at this time to talk about timeline; once you have the money and you engage the contractor, then you can be specific in terms of when you can complete the project," he added.

Mr Francis Asenso-Boakye addressing the press briefing.

Status of CID probe

Mr Asenso-Boakye further said the ministry was committed to securing funds to complete the project, regardless of the outcome of the ongoing criminal investigation by the Criminal Investigations Department (CID) into alleged anomalies in the contract which had led to "a significant short-changing of the state, running into tens of millions of dollars".

He said although he could not share the details of briefings he had received on the police investigations, he had been informed that the report would soon be sent to the Attorney-General's Department for action.

Unsafe for habitation now

Mr Asenso-Boakye urged the public to disregard the call for people to occupy the uncompleted facility because it had consequences for their own health and safety.

"A cursory inspection of the current state of development belies the fundamental challenge of the absence of the primary infrastructure the site suffers, for which reason a further investment is required.

“For now, it is not safe for anyone to forcibly claim and use any of the facilities. That will certainly be putting their safety and health at risk,” he advised.

Listen to the press briefing below;

Bra Zurich · Asenso-Boakye Press Conference on Saglemi Housing Project

Background

Former President Mahama had, on August 15, 2012, granted Executive approval to the Ministry of Water Resources, Works and Housing to construct 5,000 affordable housing units, to be executed by Messrs Construtora OAS Ghana Limited, for sale to workers through a mortgage arrangement via the Ghana Home Loans.

The contractor was to utilise a buyer’s credit of $200 million from Credit Suisse International for the project, which was christened the Saglemi housing project.

In 2018, the then Minister for Works and Housing, Samuel Atta Akyea, invited the Attorney-General to scrutinise the agreement, after it emerged that some of the contract documents were missing or had inconsistencies.

Mr Atta Akyea also alleged that the original agreement for the Saglemi housing project was altered without recourse to Parliament.

He claimed that after Parliament had passed the original agreement in October 2012 for the construction of 5,000 housing units, the then Minister for Works and Housing (Collins Dauda) reviewed the contract, scaling down the number of units to some 1,500 and later to 1,024, after another review in 2016.

The first phase of the project, with 1,500 housing units, which was inaugurated by Mr Mahama in 2016, has been left unused.

During a visit to the site in March 2021, the Director of Housing at the Ministry of Works and Housing, Dr Theresa Tuffour, said out of the 1,502 units at the Saglemi project site, the contractors had completed 1,389, pending the installation of utilities.

She said 386 units were at various stages of completion, while 139 town houses had been completed, awaiting the provision of utilities.

Below is a drone footage of the Saglemi Housing project