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The NDC administration had to make a hasty retreat last week in withdrawing from Parliament, a $1.5 billion housing deal between Ghana and STX Korea, for the construction of about 30,000 housing units for the country's security agencies after the Minority group had pointed out some inconsistencies in the deal.

Government indicated before the withdrawal that it was going to bring the deal to Parliament for possible approval before the House goes on recess on August 3, 2010.

However, addressing a press conference yesterday on why NPP called for the withdrawal of the deal to allow proper due diligence, the Minority Leader, Osei Kyei-Mensah-Bonsu warned that there would not be any “shortcuts in the STX deal”, emphasizing that the people of Ghana would be cheated if all the agreements were approved.

He reiterated that NPP would support any deal that would provide affordable houses to Ghanaians including the security agencies, particularly with the appalling nature of housing deficit in the country, but would not approve an agreement that would not be in the interest of the people.

The STX Housing project is a joint venture agreement between Ghana, STX Engineering and Construction Ghana Limited and HFC Bank Ghana Limited (HFC), in which the parties intend to build 200,000 housing units in 10 cities in Ghana, over a five-year period, at an estimated cost of $10 billion.

Out of this, Ghana intends to off-take (own) 90,000 of the units which will cost the nation about $4.5 billion.

According to Mr Kyei-Mensah-Bonsu, all the risk-bearing was placed on Ghana and STX was getting a free ride on the back of Ghanaians.

He frowned on government giving the Korean company an insurance cover of over $250 million in the deal, after the country had granted a sovereign guarantee.

In addition, government would have to pay, within 10 business days, all expenses incurred including but not limited to legal valuation and accounting fees, travel expenses and other out-of-pocket expenses and any VAT on all expenses for STX Korea.

The Minority also raised questions about funding for the housing project, as well as the capacity of STX to undertake the project in five years.

“No questions are being asked of it's capacity to build 200,000 units since the largest contract STX Korea, the backbone company itself, has obtained in building housing units is for 27,000 units in China to be built over 8 years,” the Minority Leader indicated.

According to Mr. Kyei-Mensah-Bonsu, a Chinese contract was secured in 2008 for an average yearly production of about 3,475 housing units. He pointed out that two-and-a half years into the contract, the company woefully delivered just over 3,000.

Osei Kyei-Mensah-Bonsu, who was part of the parliamentary delegation to Korea when the STX contract was entered into, said the STX, upon probing, had not been able to clearly and unequivocally identify its source of funding.

This is so because STX Ghana first identified Woori Bank of Korea as a potential lender.

The Minority said the documentation provided by the bank indicated that the term sheet was "not legally binding" and the government therefore rejected and withdrew this offer.

Again, the Korean government only indicated its willingness to provide support through its entity known as the Global Infra Fund, a fund set up to assist Korean companies.

“In the circumstance, can anyone claim that there is a credit facility of $1,525,443,668 available for the project? So what was Parliament being asked to approve? Funding for feasibility studies?”

He emphasised that if the feasibility stage was not over, then Parliament cannot approve a credit facility of $1.525 billion.

STX construction, Osei Kyei-Mensah-Bonsu hinted, presented itself in the agreement as the lender of the facility to the Ghana Government. However, he said checks at the Registrar-General's department did not indicate that STX Engineering and Construction Ghana was incorporated as a lender of money since it had not been licensed by the Bank of Ghana as a financial institution.