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Gov’t To Let Private Developer Complete, Sell Off Saglemi Housing Project

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The Minister for Works and Housing, Francis Asenso-Boakye (MP) has announced the Government’s decision to explore the possibility of selling the Saglemi Housing Project, covering the 1,506 housing units, at the current value to a private sector entity to complete and sell at no further cost to the State.

Furthermore, proceeds from the sale will come to the state and be reinvested into the government’s affordable housing programme.

To facilitate the processes, the sector Minister said, a Technical Working Team made up of professionals and experts has been set-up to oversee and spearhead all engagements required for the completion of the project. This, the Minister noted, is being done with the aim of ensuring transparency and accountability, while guaranteeing value for money in the completion of the project.

The Minister made these known at the Minister’s Briefing Programme to update recent developments in the Works and Housing sector today in Accra.

The Saglemi Affordable Housing Project which was initiated in 2012 for the delivery of 5,000 housing units at a total cost of US$200,000,000.00 under an Engineering-Procurement-Contracting (EPC) Agreement with Messrs Construtora OAS Ghana Limited saw its original contract amended three times, effectively reducing the project scope to 1,506 housing units, despite $195,854,969.52, representing 98% of the project funds having been expended. That notwithstanding, none of the 1,506 housing units were habitable, as the project was at various stages of completion and lacking basic amenities, such as water, electricity, and other related amenities.

Meanwhile, a technical assessment report by the Ghana Institution of Surveyors in September, 2020, valued the total cost of works on site at US$64,982,900.74.

As part of Government’s commitment to forestall further deterioration of the project, Asenso-Boakye said the Ministry has been engaging Cabinet, the Ministry of Finance, the Office of the Attorney-General and Ministry of Justice on the best viable options to complete the project.

Following a comprehensive assessment of the project, the Sector Minister disclosed that government will have to allocate additional financing of approximately US$46 million to provide off-site infrastructure such as water, electricity, and storm drain, in order to make the housing units habitable.

“Additionally, there is the need to invest approximately US$68 million to complete the buildings, and other essential on-site infrastructure works”. The Minister added.

Owing to the huge discrepancies with the funds expended on the project, Asenso-Boakye disclose of government’s intent not to further sink tax-payers money towards the completion of the project.

While reiterating the sector Ministry’s commitment to ensuring a robust and sustainable development of public works and housing infrastructure, the Minister called for greater regard for rules and regulations governing the country’s settlement planning, and development control, while admonishing citizens to be more intentional in managing household solid waste.

Touching on the review of the Rent ACT, 1963 (ACT 220) and the Rent Control Law, 1986 (P.N.D.C.L 138), Asenso-Boakye said Cabinet, after extensive engagements on the draft Rent Bill, 2022, at its last meeting on 27th October, 2022, gave approval for the draft Rent Bill, 2022 and recommended same for the consideration of Parliament.

The Minister expressed the belief that Parliament will soon commence its engagements on the Bill to culminate in its successful enactment.

STATEMENT BY THE HONOURABLE MINISTER FOR WORKS AND HOUSING, FRANCIS ASENSO-BOAKYE (MP), AT THE MINISTER’S PRESS BRIEFING

[Sunday, November 13, 2022 @ The Conference Room, Ministry of Information @ 1pm]

Hon. Minister,
Hon. Deputy Ministers,​
Chief Directors,
Directors, Heads of Departments and Agencies,
Friends from the Media,
Distinguished Ladies and Gentlemen,
Good afternoon,

1. It is a pleasure to be back here, once again, to update the good people of Ghana, on key developments within the works and housing sector of the economy. Over the years, these engagements have continued to remain important to our governance system.

2. Personally, I do not take these engagements lightly, considering the fact, that, it has formed the basis of our democracy, by strengthening the transparency and accountability in our governance system.

3. I extend the compliments of the Ministry to our esteemed viewers, who have joined this briefing, via various social media and virtual platforms.

4. Our engagement today, will focus on two key areas:

1. Review of the Rent Law; and
2. The Saglemi Housing Project.

REVIEW OF THE RENT ACT, 1963 (ACT 220) AND THE RENT CONTROL LAW, 1986 (P.N.D.C.L 138)

5. Ladies and Gentlemen, one subject area that has dominated the housing space for decades is the regulation of the rental housing market in Ghana. As I have mentioned in recent times, the existing law was passed by Parliament fifty-nine years ago, and therefore, its relevance has been outlived by the current population growth and urbanization, housing availability, rental rates, housing redistribution and eviction controls, amongst several other attendant difficulties, that have engulfed the housing sector.

6. The review is intended to safeguard the rights of vulnerable tenants who have been out priced by the uncontrollable hikes in the cost of renting accommodation.

7. Additionally, the review seeks to remove inherent constraints and offer incentives, which will stimulate private sector investment in the rental housing sector. This will ensure that, property developers are not discouraged from investing in the housing industry by rigid rent control mechanisms, which suppress chargeable rent to artificial levels.

8. Furthermore, the Rent Bill provides that a landlord who demands the payment of rent in advance for more than one month in a monthly tenancy, or a tenancy which is shorter than one month, or more than one year in a tenancy, which exceeds one year, commits an offence, clearly identified in the Bill.

9. After some extensive engagements on the draft Rent Bill, 2022, Cabinet at its last meeting held on 27th October, 2022, gave approval for the draft Rent Bill, 2022 and recommended same for the consideration of Parliament. It is expected that soon, Parliament will also commence its engagements on the Bill to culminate, hopefully, in its successful enactment.

10. I want to take this opportunity to implore on all well-meaning Ghanaians to take particular interest in these engagements and contribute to its adoption. This can be done by sending your views and expectations to your respective Members of Parliament, as the House is about to consider the draft Bill.

COMPLETION OF THE SAGLEMI HOUSING PROJECT –

11. Distinguished Ladies and Gentlemen, as you may all know, the Saglemi Affordable Housing Project was initiated in 2012 for the delivery of 5,000 housing units at a total cost of US$200,000,000.00 under an Engineering-Procurement-Contracting (EPC) Agreement with Messrs Construtora OAS Ghana Limited.

12. By the end of the stipulated completion date, the original contract of the project had been amended three (3) times, with the project scope reducing from the initial 5,000 housing units to 1,506 housing units, although US$195,854,969.52 representing 98% of the project funds had been expended.

13. That notwithstanding, the 1506 housing units were at various stages of completion.

14. None of these 1506 housing units were habitable, because the project currently lacks basic amenities, such as, water and electricity, and other related amenities.

15. At the same time, a technical assessment report by the Ghana Institution of Surveyors in September, 2020, valued the total cost of works on site at US$64,982,900.74.
16. Consequently, there is an on-going criminal prosecution at the High Court to determine the discrepancies with the funds expended on the project, vis-à-vis the valued cost of works and original project scope.

17. Ladies and Gentlemen, since assuming office, I have had the opportunity to assure the good people of Ghana, that, as a people-centered government, we have not ignored the call for the completion and habitation of the Saglemi Affordable Housing Project.

18. In pursuance of this, and to forestall further deterioration of the project, the Ministry has been actively engaging Cabinet, the Ministry of Finance (MoF), the Office of the Attorney-General and Ministry of Justice on the completion of the project.

THE PROBLEM

19. It is worth mentioning that throughout these engagements, it was evidenced that regardless of the option government takes, government will have to provide additional financing to the tune of approximately US$46 million to provide off-site infrastructure, that is, water, electricity, and storm drain, to make the housing units habitable.

20. Additionally, there is the need to invest approximately US$68 million to complete the buildings, and other essential on-site infrastructure works.

21. Ladies and Gentlemen, what makes the Saglemi Housing Project even more complicated is that, Government has already expended approximately US$196 million on the project as has been enumerated earlier, and upon further consideration, government does not intend to expend additional tax-payers money towards the completion of the project.

22. Thankfully, the State has some equity in the form of the land and assets on site that can be leveraged upon for the completion of the units by the Private Sector.

23. Distinguished Ladies and Gentlemen, after a painstaking period of assessment, verification and consultations, Government has decided to – Explore the possibility of selling the Saglemi Housing Project, covering the 1,506 housing units, at the current value to a private sector entity to complete and sell the housing units to the public, at no further cost to the State.

24. The proceeds from this sale will come to the State and reinvested into Affordable Housing projects.

25. In furtherance of the above, and to facilitate the processes, a Technical Working Team has been set-up, comprising professionals and experts to oversee and spearhead all engagements required for the completion of the project. This is being done with the goal of ensuring transparency and accountability, while guaranteeing value for money in the completion of the project.

CONCLUSION

26. Distinguished Ladies and Gentlemen, I wish to take this opportunity to reiterate my position that as the Sector Ministry, we shall continue to remain committed to the course of ensuring a robust and sustainable development of public works and housing infrastructure, for the benefit of our present and future generations.

27. While doing same, I wish to repeat the call for greater regard for rules and regulations governing our settlement planning, and development control, while admonishing citizens to be more intentional in managing our household solid waste. It is my fervent hope that all will heed to the call and put our nation first, in all our dealings.

28. On this note, I wish to extend my sincere appreciation to you, Hon. Minister for Information and your team, as well as the media, for indulging my Ministry and providing a platform for us to present updates on some of the major happenings of the Sector.

29. May the Almighty God Bless Us All.

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