The Saglemi Housing Project in the Ningo Prampram District could cost over $400 million for the construction of just 1,506 units, exceeding initial estimates.
The project was designed to build 5,000 homes on 2,172 acres of land with a $200 million loan, a two-year grace period, and a five-year repayment period with a 12.5% interest rate per annum on the cedi equivalent of the dollar loan amount based on the dollar cedi exchange rate fixed at drawdown.
According to sources, the total debt to be serviced is $249.6 million, and the sale of 5,000 units was to generate $257.27 million.
However, the bank deducted $1.550 million as charges and paid $198.45 million into an escrow account. The $196.4 million spent on the project yielded only 1,506 units, instead of the proposed 5,000.
The 2-bedroom units are to be sold for $29,000, and 3-bedroom ones for $57,000. An additional $114 million investment is required due to a demand for compensation by the contractor, Construtora OAS Ghana Limited, which terminated its contract with the government on February 18, 2019.
The contractor requests a sum of $68 million to complete housing units and other on-site infrastructure works.
The cost also includes $30 million for water supply, $8 million for electricity supply, and $5 million to provide storm drains. Additionally, the cost of the project could rise to $310.4 million.
Overall, the total cost of the Saglemi Housing Project, including interest, would be $371.27 million, and if the interest on the additional $114 million is also secured at the same 12.3%, the construction costs would exceed $400 million for the 1,506 Saglemi housing units, a development that has led to prosecution of some actors.
By Vincent Kubi