Bagbin Fights Jake Over STX Deal

Posted: Daily Guide |Wednesday, 28 July 2010

The Minister for Water Resources, Works and Housing, Alban Kingsford Sumani Bagbin, yesterday took time off his obviously busy schedule to brief the media about the much-talked-about $10 billion STX Korean housing deal which has been a subject of heated controversy, taking the matter to the door-steps of the National Chairman of the opposition New Patriotic Party (NPP), Jake Obetsebi-Lamptey.

With television and radio stations carrying live feeds to the homes of millions of Ghanaians, Bagbin described Jake as a “property looting chairman”, to the amazement of media personnel gathered at the event.

The Mills-led National Democratic Congress (NDC) government has been working on the US$10 billion housing deal with STX Korea for the construction of 200,000 houses across the country in the next five years, putting the average cost of each house at $50,000.

The agreement, which was initially placed before Parliament, was quickly withdrawn by the government upon realising that the loopholes in it included the non-provision of a lender for the $10billion funding.

Though government claims the deal is the best answer to the over one million housing deficit in Ghana, the NPP and some stakeholders including civil society organizations, such as the Danquah Institute and the Imani Centre, have all raised issues with the terms of the agreement.

No costing was made for each of the housing unit, raising questions about its transparency.

But in his almost two-and-half hour presentation, Bagbin, Member of Parliament for Nadowli West, sought to justify why he thinks all Ghanaians including the NPP must stop bickering and buy into the housing deal.

The Minister used the meet-the-press to launch scathing attacks on Minority Members of Parliament (MPs) and NPP Chairman Jake Obetsebi-Lamptey for accusing him and other ministers- Attorney General and Finance and Economic Planning- of trying to kill the local real estate industry.

“Now let’s be clear here. I must state that these widely publicized claims are not only false but are motivated by mischief and I daresay naked jealousy,” he said, describing Jake as a “self-confessed property-looting chairman”.

The Minister said he could not understand why the NPP Chairman could liken the STX housing deal to “another M&J scandal in the making”.

Bagbin, who until his appointment as a Minister not too long ago, described Prof Mills as slow, was full of praise for the President this time around, with regard to the housing deal.

Bagbin said: “It is the aim of STX Korea to use Ghana as the launch pad to an integrated building and construction industry in the West African sub region.”

Sounding more like a Public Relations Officer of the company, the Housing Minister said, “Indeed, under this housing venture, STX Korea has proposed to build major cement, steel and power generating plants/factories here in Ghana to anchor the economy in its movement to the middle income status”.

Apart from supplying building materials to support its construction project in Ghana, “the operations of STX Korea in other African countries will be anchored largely on the cement and steel factory to be located here in Ghana,” he noted, stressing, “Indeed, the planned construction of the cement factory is expected to create over 40,000 jobs in Ghana alone.”

To his Minority MPs, Bagbin said: “I am fully aware we haven’t agreed much on every issue on this huge housing deal.

And I know there are certainly times in the future where we will part ways on how to best tackle the dire housing needs of our people”, describing the deal as the largest and single most ambitious project in the country.

The STX deal, according to critics, would lead to the eventual mortgaging of Ghana’s yet-to-be-explored oil.

On May 4, 2010, the Government of Ghana sought to push through several loan agreements under a certificate of urgency when Parliament was on recess.

One was a Suppliers Credit Financing Agreement between the Government of Ghana and STX Engineering and Construction Limited (a subsidiary of the STX Group, Korea) for an amount of $1,525,443,468.00 to construct 30,000 housing units for the Security Services - with 20,000 units for the Police Service (including 10,240 units), and the remaining 10,000 to be spread among the other security agencies, including the Military and the Prison Service.
Vice President John Dramani Mahama led a government delegation to South Korea to complete agreement formalities on the housing project and sign another MOU on an infrastructure establishment project with STX, targeting Ghana's oil.