$200million housing deal worse than STX: Youth group
The Youth Against Corruption (YAC), a leading network of young leaders, professionals and civil society organisations has raised red flag over another affordable housing deal which had been forwarded to Parliament for approval.
The government is asking Parliament to approve a loan agreement of USD$ 200million for the construction of 4,120 affordable houses in the country.
The loan, when approved by Parliament will result in the construction of 4,120 affordable houses by Italconstruct International Limited, a Ghanaian estate development company. The company will intend sell the affordable housing flats or apartments to Ghanaian citizens at an average cost of GH¢ 97,089.
However, the Convener of YAC, Nana Kofi Oppong Damoah told Business Chronicle in Accra that “This is a significant deal because it is one of the first major loans that John Mahama, as President, has caused to be laid before parliament for approval. Our checks indicate that this deal is far worse than the STX deal, in terms of value for money and is an affront to transparency and accountability.”
In terms of value for money, he explained that this deal stinks and that it costs the same Italconstruct International Limited, as published on their website, some US$ 27,100.00 to build a two-bed room house. This price quotation includes free land and other utility infrastructure provided by the government, among some other exemptions.
He further explained to some journalists in Accra, yesterday, that the deal raises eyebrows that the company, though it will receive waivers and free land, has its prices inflated by US$21,443.69 or 80% of the original cost, plus taxes and land cost price.
Mr. Damoah noted that by convention these houses will be mostly two and one bedroom flats or apartments, which are misleadingly being described as houses. How affordable is this, considering the fact that government has pegged affordable housing at $10,000 or less, he stated.
The youth group questioned: “Why is this deal being entered into by the government of the day? This deal is certainly not in the interest of the ordinary Ghanaians to whom such houses are to be made affordable.”
Mr. Damoah alleged that the deal had been bloated by over US$88,348,000. This bloated amount would have been used to build 1,178 brand new six-unit classroom blocks with ancillary facilities.
The government should explain to Ghanaians why in their view, this deal is in the interest of Ghanaians. The youth of Ghana certainly do not agree that this deal is in the public interest, he fumed.
Comparing the current deal with the botched STX deal, he stated: “The STX deal was one that was engineered and pushed for by the then Vice President John Mahama. It is alleged that the deal was bloated by over US$800million and GREDA provided evidence of this when they proposed to deliver the same houses at less than half the price. This price was a whopping US$1.5 billion.”
The Youth Against Corruption says they are more than worried about this deal because of the alternatives forgone.
Mr. Damoah emphasized that “in an economy where the number one problem for the youth is jobs, we wonder why President Mahama, if he was really concerned about the youth, could not have put through his deal and used the $800 million to set up an entrepreneurial fund to give capital to the youth with good business plans”.
He continued, “Assuming that was done, and each entrepreneur was to be given GH¢100, 000 as capital, that would have created about 16,000 youthful entrepreneurs who would have gone ahead to create more jobs for their friends and families.
Assuming each entrepreneur had to employ just 20 people, a total of 336,000 youth would have been given sustainable jobs.
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