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General News
STX housing deal may be abrogated - NDC MP 6/5/2011
The Chairman of the Finance Committee of Parliament, Mr James Avedzi, says he is concerned that eight months after the STX Housing project agreement was signed, nothing concrete has yet been done.

He said it was his wish that construction works on the 30,000 housing units would have started by now. He was speaking on Joy FM’s Newsfile Saturday.

Mr Azedzi was answering questions on the inability of STX Korea and their local partners to raise the needed funding to start the project despite the fact that the government has signed an off-taker agreement with the company.

He rejected suggestions STX Korea was having difficulties sourcing the necessary funding for the project because a provision allowing the company to claim oil if the country ever defaulted on its payment has been removed from the agreement.

“As far back as three months to the time we approved it (agreement), we made known to them that we were not going to use the oil as collateral; that portion of the agreement - we made it known to them – we were going to delete it. If they had any concern about that they would have notified us but they didn’t so it means they accepted our proposal,” he said.

He said the government would have to abrogate the contract or seek a new supplier if after one year, STX Korea fails to put any structures on the ground.

For New Patriotic Party (NPP) Member of Parliament for Okaikoi South, Nana Akomea, the state of the project is a déjà vu.

He said the problems currently confronting the execution of the project pointed simply to the lack of due diligence preceding the approval of the agreement.

For him, the entire project was imprudent and was not in the interest of the state.

Under the project which will see Ghana spend 1.5 billion dollars on 200,000 housing units, a one-bedroom flat will cost almost 13,000 dollars.

According to Nana Akomea, a two-bedroom flat under the project will cost $32, 000 – a situation he believes is inconceivable. “The addition of one bedroom to make it two-bedrooms takes it to $32,000; more than twice of the cost of the one-bedroom house. In any case, what are you going to add to the second bedroom that takes the cost of the one-bedroom to twice the cost.”

Nana Akomea also had a difficulty understanding why the government is scrambling to start a new housing project when close to 4,000 housing units at various stages of completion initiated under the previous government have been left to rot.

“They (the buildings) are sitting down rotting and you are going to look for $1.5 billion to give to a Korean company to [start a new housing project],” he stated.

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