STX housing project limbo

Standard Chartered Bank Ghana remains neutral as to whether it is leading a syndicate to contribute to raising US$1.5 billion to fund the STX Housing projects in parts of the country. Last week the Minister of Water Resources, Works and Housing, Mr. Alban Kingsford Sumana Baggbin, claimed that two large banks, Standard Chartered Bank and another bank in the United States of America (USA), had committed to releasing funds for the project. He will not state how much each of the banks will be releasing, but named the banks as Standard Chartered Bank, Ghana, which he said was leading the syndicate, He also named the Bank of America, which was prepared to release some amount in support of the project. When reached for further details on the syndication, officials of Standard Chartered Bank in Ghana were tight-lipped on the role of the bank in the STX Housing project.

According to Nii Okai Nunoo, Area Head Corporate Affairs of the Bank in charge of West -Africa, Standard Chartered Bank had over the years been providing support for many state projects and initiatives that have brought enormous benefits to the people and the economy of Ghana.

“We have also worked with governments and international clients on various projects, but we cannot comment on transactions between us and our clients and potential clients,” he added.

Although the Comments from the bank were not specific as to whether the claims by the Minister of Works and Housing is true or not, other sources within the bank told the Graphic Business that if the bank was able to fund about 40 per cent of the funds used in the Jubilee oil fields that enabled Ghana to pour its first oil in time, syndicating funds for another project that would positively impact on the lives of the people should not be a challenge.

The source was also cautious about the choice of words, but indicated that

“We win Corporate Social Responsibility, awards for many years running because of our commitment to ensure that initiatives that bring lasting benefits to the people to better their lives are supported.”

Mr. Bagbin said on a radio station in Accra that there were also positive moves to access some funds from the Global Infra Fund to execute the project which he believed was going to be executed according to time.

Efforts to reach officials of the Bank of America for comments have proved futile, but what is clear that the bank has a history of supporting such huge projects.

Since the debate in Parliament to endorse the project, a former Minister of State at the Ministry of Finance and Economic Planning, Dr Anthony Akoto Osei, had raised issues about the funding sources and on the same programme with the minister on radio, also challenged the sources of funding mentioned by Mr. Bagbin.

He maintained that the project had stalled because the nature of the project with its ambiguities did not make it likely for the company behind the project to raise funds for the project.

Dr Akoto also wondered why the project, when brought to Parliament, mentioned that the interest rate for the loans was two percent when the source had not been identified at the time of the debate.

But Mr. Magbin remained resolute and insisted that nothing was going to get the project delayed because all was on course according to the plan.

He said land preparation for the actual works to begin on three of 15 sites identified would start next month.

“Presently, the surveying and mapping on the site are ongoing because we have now managed to secure all the lands with the appropriate land tittles to avoid any disputes when the project starts,” he noted.

The first phase of the US$10 billion project will see the construction of 30, 000 housing unit meant to address the perennial housing challenges for the security services.

The initial phase of the project is intended as part of the off-taker by the government for the security services whose accommodation problems have been of dire concern to the government.

It is expected to be secured through a 20-year Suppliers Credit concessional facility in the form of sovereign guarantee to be issued by the Ministry of Finance and Economic Planning. Estimate for this particular phase of the project have been put at US$1, 525, 443, 468.

The second phase of the project agreement, which witnessed a lot of rancor in parliament since the beginning of last year, will comprise the construction of 60,000 affordable housing units for the various assemblies.

As per agreement, the third phase of the project, will see the construction of the remaining 110, 000 units of houses. Ace montage financier, HFC Bank, will partner the STX to provide them to the private sector.

Apart from the first phase of the project where the government is expected to provide sovereign guarantees to cover the cost, the second and third phase will not be subject to any such guarantees.

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