Alhaji Collins Dauda, 4 others charged with causing financial loss to the state … in the construction of Saglemi Housing Project

Former Works and Housing Minister, Alhaji Collins Dauda, has been charged for allegedly misapplying $200 million meant for the construction of 5,000 housing units popularly known as the Saglemi Housing Project.

He and four others charged with wilfully causing financial loss to the state, issuing false certificate and dishonestly causing loss to public property may appear in court today.

In all, the state preferred 52 charges against the accused according to the fact sheet signed by Mrs Yvonne Atakora Obuobisa, the Director of Public Prosecution (DPP).

The other accused were Messrs Kwaku Agyeman-Mensah, a former Minister of Works and Housing from April 2015 to January 2017 and Alhaji Ziblim Yakubu, the Chief Director of the Ministry from July 2009 to April 2017.

Others were Andrew Clonacas, the Executive Chairman of Construtora OAS Ghana Limited and Nouvi Tetteh, the Director and the majority shareholder of Ridge Management Solutions DWC-LLC. He is also the director of VHM Ghana Limited.

According to the document, the accused changed the scope of and the application of the $200 million approved by Parliament for the construction of 5,000 housing units.

The fact sheet said that when Mr Dauda who is the Member of Parliament for Asutifi South took office as the Minister of Water Resources, Works and Housing (MWRWS) on February 27, 2014, without Parliamentary approval, the accused reviewed the original agreement and signed the First and Restated Agreement with Construtora OAS, represented by its chairman.

The document said even though a total amount of $196,428,891.66 had been spent on the Saglemi Affordable Housing Project, with the contractor having been paid $179,904,757.78, investigations revealed that the cost of works executed on the site, including consultancy services, is about $64,982,900.77 and that only 651.75 acres of land out of the 2,172 acres of land made available by the MWRWH to the contractor for the project had been developed.

It said investigations further revealed that only 668 housing units were completed by the contractor. 

The document stated that these houses were however not habitable, adding that not a single house under the project had been sold and facility remain unpaid, resulting in huge financial loss to the state.

The facts according to the DPP are that, in August 2012, then President, John Dramani Mahama, granted executive approval to the MWRWH for the construction of 5,000 affordable housing units for sale to workers through mortgage arrangements provided by the Ghana Home Loans to be implemented by Construtora OAS Limited.

The project was to be funded by a Buyer’s Credit of $200 million provided by Messrs Credit Suisse International (Credit Suisse).

On October 31, 2012,  Parliament granted approval for the government to secure a facility of $200 million from Credit Suisse for the construction of 5,000 affordable housing units by Messra Construtora OAS Limited, following a joint memorandum to Parliament by the then Minister of MWRWH, Enoch Teye Mensah and then Minister of Finance and Economic Planning, Dr Kwabena Duffour.

On January 4, 2013, a Facility Agreement was signed between the Ministry of Finance, as borrower, and Credit Suisse, as creditor, for a facility of $200 million for the construction of 5,000 affordable housing units. On the same day, MWRWH through then Minister, Enoch Teye Mensah, signed an Engineering, Procurement and Construction (EPC) Agreement with Construtora OAS Ghana Limited for the construction of affordable housing units at Saglemi in the Greater Accra Region.

The project which was to be executed in four phases on 2,172 acres of land was at a contract price of $200 million, including consultancy services.

An Escrow Management Agreement, a condition precedent to the release of the facility to the borrower, was also signed pursuant to the Facility Agreement and the EPC Agreement, between the Ministry of Finance (Borrower), the MWRWH (Account holder), the Bank of Ghana (Account holding bank) and the Construtora OAS (Contractor).

On January 9, 2013, Credit Suisse disbursed an amount of $198,450,000 representing the $200 million less fees and transaction expenses into the Escrow Account.

On February 27, 2013, an amount of $80 million representing 40 per cent of the contract sum was transferred to Construtora OAS as advance payment.

The contractor however failed to apply the amount towards the purpose for which the payment was made.

On February 27, 2014, Mr Dauda who had then taken office, changed the scope of the project and signed another agreement with Construtora OAS Limited contrary to the executive and parliamentary approval as well as the Facility and Escrow Management Agreements.

On April 15, 2013, the Architectural and Engineering Service Limited signed a contract with Vito Hugo-Coordenacao Gestao De Projectos (VHM) subcontracting their consultancy services under the EPC Agreement to the company for $500 million over a period of 24 months.

This was the amount provided under the EPC Agreement for the consultancy services for the construction of the 5,000 housing units. And under the agreement between AESL and VHM, a maximum amount of $2,987,750 was to be paid CHM for their services.

On December 21, 2016, Alhaji Yakubu, who was then the Chief Director of the MWRWH, on his part, without recourse to Parliament reviewed the First Restated Agreement and signed the Second and Restated Agreement and that this led to a further reduction in the scope of works to 1,412 housing units at a revised contract price of $181,018,000.00 and extended the completion period of the contract to July 31, 2017 without any basis.

Between March 2014 and January 2015, an amount of $46, 131,153.41 was paid to the contractor, Construtora, OAS, whilst a total of$3,386,916.08 was paid to AESL and VHM when no works had been duly executed by the contractor.

These payments the prosecutor said was without any evidence of specific project milestone achieved by the contractor as required under the EPC Agreement.

Again, Director of Public Prosecution said that there was no justification of the appropriate use of the advance payment of $80 million earlier made.

In addition, the prosecutor said that between June 2015 and January 2017, a further amount of $54,066,768.16 was paid to the contractor of the project when no works had been duly executed.


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