News:
July 13, 2010
The Member of Parliament for Manhyia says Ghana will be heading back into comity of Highly Indebted Poor Countries if the housing deal with Korean Construction firm, STX is ratified.
Matthew Opoku-Prempeh told Joy FM’s Super Morning Show host Kojo Oppong-Nkrumah on Monday that the deal is not sustainable and the financial strain it puts on the country will undoubtedly draw the country back into HIPC.
The government of Ghana signed a Memorandum of Understanding (MOU) with the Korean company, committing Ghana to a $4.5 million deal for the construction of 200,000 housing units payable in the next 20 years.
But Dr. Opoku-Prempeh said the Finance Committee of Parliament should have done a better job.
“If they (Finance Committee) had done a cursory check they would have realized that in five years when the moratorium of the principal expires, Ghana will be paying almost equally the amount of money that took us into HIPC in 2001,” he stated, adding that this deal is not sustainable.
“Never in the history of the developing world has a developing country funded a large country or a developed country as Ghana is going to fund South Korea,” he emphasized.
Parliament is scheduled to consider the passage of a $1.5 billion agreement, being the first part of the deal which will lead to the construction of 30,000 units of houses.
He said the deal is a complete rip-off given that GREDA, the local construction outfit in Ghana has pledged to build the same number of unit houses at a relatively cheaper cost.
He adds that GREDA has built a solid track record in construction in Ghana, as compared to STX who only started construction in 2007.
“If Ghana Parliament passes the bill, we would have sold Ghana to a foreign entity,” he noted, accusing some members of the Finance Committee of succumbing to the whims and caprices of the powers that be in exchange for favours.
But the Chief Executive Officer of the STX Ghana, Bernard Asamoah, said the deal is faultless.
On the contrary, he said funding for the deal is coming from the Korean government.
According to him there is a “global fund,” put at the disposal of Korean companies abroad by the Korean government which STX is going to access.
He said STX will source $400 million for a period of five years to aid the construction of the houses.
Mr. Asamoah also noted that there is going to be enough local participation as “it is not possible” for STX alone to execute the project.
Dr. Opoku-Prempeh said arguments that the Korean government was fully backing STX and therefore there was no cause for alarm were hollow and untenable.
“STX is a big enough company to raise its own financing and besides it can even do it because government of Ghana is giving a sovereign guarantee, so you can read from the letter of the Korean government that they are actually not supporting this deal with anything,” he said.