July 16, 2010

The twice-postponed debate in parliament of the controversial STX housing deal got to a heated start Wednesday, and into another postponement.

Consistent with debates on such sensitive matters, the opposition to the deal by the minority NPP was unanimous and the support from the majority side of the House was conversely total and absolute.

The Minority lined up former Finance and Economic Planning Minister, Osei Akoto as the lead attacker, supported on the wings by former Attorney-General and Minister of Justice, Mr Joe Ghartey, with Minority Leader Osei Kyei-Mensah-Bonsu providing rear artillery guard.

On the Majority side, the Chairman of the Finance Committee of Parliament Mr James Klutse Afedzi served as the vanguard, with Deputy Finance Minister, Seth Tekper doing the goalkeeping in parrying the attacks of the Minority.

Mr Osei Akoto started his submission by quoting from a letter from Woori Bank which he said had been presented to suggest that STX was going to secure funding for the project from the bank.

But he said the content of the letter betrayed the purpose for which it was intended.

“This letter is not intended to amount to an offer or a legally binding commitment,” he quoted the letter as saying and then asked, “who are the lenders?”

Dr Osei Akoto said another letter purported to have come from the Korean government does not state a clear willingness of that country to finance the project for STX.

He said the letter insisted that feasibility studies be conducted and that that did not amount to South Korea promising to provide the funding for the construction of 30,000 housing units for the security agencies.

The former Finance Minister also took issues with the provision of a sovereign guarantee to STX for the loan to finance the project while at the same time paying an insurance of $250 million.

For him, given Ghana’s credit rating of B+, there was no need to pay a whopping $250 million as insurance for the credit facility.

But Mr Tekper said the insurance was for political and commercial risk given the perception that Africa is a risky place to invest in.

MP for Esikado, Joe Ghartey took the floor and raised tonnes of questions bordering on the lack of transparency and value for money aspects of the $1.5 billion deal.

He said according to the documents available to members of the House, although the STX had been described as a lender, “we have not been told whether STX is a bank, a discount house or what?”

He said it was of utmost importance for clear information to be made available to members of the House on such critical matters as where the money is coming from.

“There is not much information to help us determine whether we are approving an illegal deal,” he noted.

Quoting from page five of the memoranda submitted to the MPs, Mr Ghartey said according to the agreement, the money will be used to fund projects whose specifications are on Schedule II.

But Schedule II, he contended, is blank. He asked how MPs could be asked to approve a loan for projects whose specifications had not been stated.

The Minority demanded an off-taker agreement which was not part of the documents.

This forced the First Deputy Speaker of Parliament, Mr Doe Adjaho, who presided over the debate to adjourn proceedings to Thursday.
He directed that the documents in question must be made available to members of the House to help them make informed debate on the matter.