Saglemi Housing Scandal 2 Mahama Ministers, Others Get $322m Bail

Alhaji Collins Dauda, Dr. Kwaku Agyeman-Mensah

The Attorney General, Godfred Yeboah Dame, has charged five people including two former ministers who served in the John Mahama-led National Democratic Congress (NDC) administration, for their alleged involvements in the $200 million Saglemi Housing project scandal.

On the charge sheet, Alhaji Collins Dauda, who doubles as the NDC MP for Asutifi South in the Ahafo Region is the first accused person, with Kwaku Agyeman-Mensah, who was the Health Minister under Mr. Mahama’s NDC administration and later became the Minister for Water Resources, Works and Housing in the same regime, the second accused person.

Alhaji Ziblim Yakubu, Chief Director at the Ministry for Water Resources, Works and Housing when the deal was prepared and signed is the third accused person, Andrew Clocanas, the Executive Chairman of Construtora OAS Ghana Limited who had entered into the agreement with the NDC government to construct Affordable Housing Units at a contract price of US$200 million, is the fourth accused person.

Nouvi Tetteh Angelo, the Chief Executive Officer and owner of Ridge Management Solutions Ghana Limited, a private entity that was involved in the Saglemi Housing project, is the fifth accused person.

 

Key Issues

The state was able to pump about $200 million into the project which Mr. Mahama’s administration initiated, but the housing units were never completed even though the funds had been exhausted before Mr. Mahama and his NDC left office in January 2017.

The initial agreement ratified by Parliament was for the construction of 5,000 housing units but by the time the project was being executed, only 1,502 housing units had been earmarked for construction without recourse to Parliament.

Interestingly, the contract amount of $200 million was spent when even though the 1,502 housing units could not fully be completed as only 668 was done and those are not even habitable.

Early this year, the Ministry of Works and Housing said it would need additional $32 million or more to be able to complete the project.

52 Counts

All the five personalities, per the charge sheet signed by the Director of State Prosecution Mrs. Yvonne Atakora Obuobisa on behalf of the Attorney General, are facing a total of 52 counts of Intentionally Misapplying Public Property contrary to Section 1 (2) of the Public Property Protection Act, 1977 (SMCD) 140, Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29), Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58 and Dishonestly Causing Loss to Public Property contrary to Section 2 (1) of the Public Protection Act 1977 (SMCD) 140.

Specific Charges

Collins Dauda alone is facing one count of Intentionally Misapplying Public Property contrary to Section 1 (2) of the Public Property Protection Act, 1977 (SMCD) 140.

He is also facing 10 counts of Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29) as well as another three counts of Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58.

Collins Dauda and Ziblim Yakubu again are facing another charge of Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29).

 

More Counts

In the case of Kwaku Agyeman-Mensah, he has been charged with two counts of Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29), and another two counts of Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58.

Kwaku Agyemang-Mensah has also been charged alongside Ziblim Yakubu with 18 counts of Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29).

Furthermore, Ziblim Yakubu alone has been charged with six counts of Willfully Causing Financial Loss to the Republic contrary to Section 179A (3)(a) of the Criminal Offence Act, 1960 (Act 29) and three counts of Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58.

In the case of Andrew Clocanas, he has been charged with one count of Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58 and another count of Dishonestly Causing Loss to Public Property contrary to Section 2 (1) of the Public Protection Act 1977 (SMCD) 140.

Nouvi Tetteh Angelo has been charged with two counts of Issuing False Certificate contrary to Sections 1 and 2 of the Government Contracts (Protection) Act, 1979, AFRCD 58 and another two counts of Dishonestly Causing Loss to Public Property contrary to Section 2 (1) of the Public Protection Act 1977 (SMCD) 140.

 

Case Facts

The 1st accused Alhaji Collins Dauda, is a Member of Parliament and a former Minister of the Ministry of Water Resources, Works and Housing (MWRWH) from February 2013 to March 2015. The 2nd accused Kwaku Agyeman-Mensah was also a Minister of the MWRWH from April 2015 to January 2017. The 3rd accused, Alhaji Ziblim Yakubu was the Chief Director of MWRWH from July 2009 to April 2017. The 4th accused Andrew Clocanas was the Executive Chairman of Construtora OAS Ghana Limited whilst the 5th accused Nouvi Tetteh Angelo is a director and the majority shareholder of Ridge Management Solutions DWC-LLC. He is also a director of VHM Ghana Ltd.

In August 2012, the then President, John Dramani Mahama, granted executive approval to the Ministry of Water Resources, Works and Housing (MWRWH) for the construction of 5,000 affordable housing units (the Saglemi Affordable Housing Project) for sale to workers through mortgage arrangements provided by Ghana Home Loans to be implemented by Construtora OAS Limited.

The project was to be funded by a Buyer’s Credit of US$200million 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 Messrs Construtora OAS Ghana Limited, following a joint memorandum to Parliament by the then Minister for MWRWH, Enoch Teye Mensah and the then Minister for Finance and Economic Planning, Dr. Kwabena Duffour.

 

Facility Agreement
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 housing units. On the same day, MWRWH through the then Minister, E.T. Mensah, signed an Engineering, Procurement and Construction (EPC) Agreement with Construtora OAS Ghana Ltd represented by 4th accused 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 US$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 Construtora OAS (Contractor).

The purpose of this agreement was to ensure that the $200 million facility would be properly applied towards the development of the 5,000 housing units. The agreement therefore required payments under the contract to be effected only when specific works had been duly executed, verified and certified by the consultants of the project, the Architectural and Engineering Services Limited (AESL).

The EPC Agreement provided for an advance payment of 40% of the contract price to the contractor within five working days of the receipt of the facility in the Escrow Account. The advance payment was to be applied towards specific works set out in the contract.

The remaining amount of the contract price was to be paid to the contractor based on the fulfilment of specific project milestones.

The contractor was required under the agreement to set out the details of the achieved project milestones, which had to be verified and certified by the consultants before receiving payment.

Facility Disbursement
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% 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, Collins Dauda who had assumed office as the new Minister for MWRWH, without any parliamentary approval, reviewed the original EPC and signed the First and Restated Agreement with Construtora OAS, represented by its Executive Chairman, Andrew Clocanas.

 

Changing Agreement

In the process, he changed the scope of works and the application of the $200 million approved by Parliament for the construction of 5,000 housing units.

This new agreement required the contractor to execute the project in three phases over a site of 1,272 acres whilst the $200 million was now to be applied towards the execution of only the first phase of the project comprising just about 1502 housing units, contrary to the executive and parliamentary approvals as well as the Facility and Escrow Management Agreements.

On April 15, 2013, the AESL signed a contract with Vito Hugo-Coordenacao e Gestao De Projectos (VHM) subcontracting their consultancy services under the EPC Agreement to the company for $500,000,000 over a period of 24 months.

This was the amount provided under the EPC Agreement for consultancy services for the construction of the 5,000 housing units and under the agreement between AESL and VHM, a maximum amount of $2,000,000 was to be paid to AESL, whilst not more than $2,987,750 was to be paid to VHM for their services. The contract also provided for 40% advance payment.

In April 2015, whilst the AESL and the VHM were still providing consultancy services under the contract, the MWRWH entered into another contract for consultancy services with Ridge Management Solutions DWC-LLC (RMS), represented by its director and majority shareholder, Nouvi Tettey Angelo, for a period of three months at a contract sum of $5.6 million and it was done at a time RMS was not registered in Ghana as a company.

 

Advance Payment

The ministry was required to make an advance payment of 40% of the contract sum and the contract was completely outside the EPC Agreement.

Investigations revealed that Nouvi Tettey Angelo, who is the majority shareholder of RMS, is also a Director of VHM Ghana Ltd.

In August 2016, Kwaku Agyeman-Mensah entered into yet another consultancy agreement with RMS, this time for what was referred to as ‘marketing implementation services’ for a sum of $2,502,198.00 and once again, the ministry was required to make an advance payment of 40% of the contract sum. All this while, the AESL and the VHM were purportedly performing the game consultancy services for the project, their consultancy agreements having been extended at various times by Agyeman-Mensah and Ziblim Yakubu.

 

Post-Election Deal
On December 21, 2016, Ziblim Yakubu without recourse to Parliament reviewed the First and Restated Agreement and signed the Second and Restated Agreement. This led to a further reduction in the scope of works to 1,412 housing units at a revised contract price of US$181,018,000.00 and extended the completion period of the contract to July 31, 2017.

 

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 and the payments were authorised by Collins Dauda, Agyeman-Mensah and Ziblim Yakubu without any evidence of specific project milestones achieved by the contractor as required under the EPC Agreement.

 

Further, there was no justification of the appropriate use of the advance payment of $80 million earlier made.

 

More Payments
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 and there were no milestone reports supporting the payments.

Further payments were also made to the three consultants; AESL, VHM and RMS, far in excess of the $5,000,000 stated as consultancy fees in the original EPC Agreement without any evidence of work they had done as there were no verification and certification of actual work done by the contractor as required under the EPC Agreement.

Even though a total amount of $196,428,891.66 has 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. Only 651.75 acres of land out of the 2,172 acres of land made available by the ministry to the contractor for the project had been developed.

Investigations revealed that only 668 housing units were completed by the contractor. These houses are however not habitable. Not a single house under the project has been sold and the facility remains unpaid.

 

Gibril Abdul Razak