Parliament approves US$100,000,000 loan for Military Housing Project


Parliament has finally approved a US$100,000,000 commercial agreement between the government and Poly Changda Overseas Engineering Company Limited and Poly Technologies for the execution and completion of the Military Housing Project for the Defence Ministry.


Presenting the report of the Parliamentary Select Committee on Defence and Interior, the Vice Chairman for the Committee, Mr. Collins Owusu Amankwah, indicated that the objective of the Project is to help provide the Ghana Armed Forces with decent and modern accommodation, to enable them perform their core function of defending the territorial integrity of country.

The Vice Chairman, who doubles as the Member of Parliament for Manhyia North, pointed out that the Defence Minister, Mr. Dominic Bingab Aduna Nitiwul, presented the commercial agreement to the House on Thursday, March 21, 2019, for deliberation.

In moving for the adoption of the agreement, Mr. Owusu Amankwah stated that pursuant to Article 103 of the 1992 Constitution and Orders 158 and 169 of the Standing Orders of the House, the agreement was referred to the Committee on Defence and Interior and the Leadership of the Finance Committee for consideration and report.

He reiterated that the Committee on Defence and Interior and the Leadership of the Finance Committee subsequently met and deliberated on the Agreement with the Minister for Defence, Mr. Dominic Bingab Aduna Nitiwul, and Deputy Minister for Defence, Major Rtd. Derek Oduro as well as officials from the Ministry of Defence and the Ghana Armed Forces.

Reactions from Ranking Member of the Committees

In seconding the motion on the adoption of the commercial facility, the Ranking Member of the Parliamentary Select Committee on Interior and Defence, Mr. James Agalga, averred that the report was solely put together by the Interior and Defence Committee.

The Ranking Member who doubles as the Member of Parliament for Builsa North pointed out that the Finance Committee failed to appear to make inputs during the Committees deliberations.

He told the House that the previous government made some efforts at solving the housing challenge of the Ghana Armed Forces by embarking on several projects across the country.

Mr. Agalga noted that the construction of the military buildings in Sunyani and some parts of northern Ghana could have been designed to storeys, and that those designs could have saved pieces of land for other projects.

Observations of the Committee on poor conditions at the barracks

The Committee observed that over the years, Officers of the Ghana Armed Forces (GAF) persistently face housing deficiencies, owing to the unavailability of enough housing options, to meet the growing demand of servicemen and women.

The Committee was informed that senior officers, including Majors and Lieutenant Colonels are currently residing in single rooms that were initially designed to serve as temporary housing options for young and unmarried Officers.

The Committee was informed that the facilities to be constructed under the specific project provided in the agreement are 160 Soldiers two-bedroom half compound house, 176 two-bed flats, a two-storey building Military Academy Classroom Block, a Military Academy Administration Office Block with 48 offices and conference rooms, a Military Academy Hostel with 240 Self-Contained Rooms, a Military Academy Auditorium seating 640 people, a Platoon Commanders Block containing 4 two-bedroom flats per floor, and a fence wall around the entire perimeter of the Ghana Military Academy at Teshie in Accra.

Sole-sourced facility

Through a communication dated January 24, 2019, issued by the Public Procurement Authority (PPA), the Committee observed that the facility was approved as sole-sourced.

The Minister for Defence explained to the Committee that the facility is essentially a Sellers Credit, hence it is sole sourced in nature.

The Minister explained that in compliance with the procurement laws therefore, approval had to be sought from the Public Procurement Authority.

Local experience of the Poly Group

The Committee was informed that the Poly Group has indeed executed projects successfully for the Government of Ghana over a period of about fifteen years and therefore has the experience in executing the project in question.

On the source of the Project funds, the Committee noted that the project will be implemented with funds from the contractor without a Government of Ghana counterpart funding.

It was indicated to the Committee that the funds for the project would be sourced by the contractor from the Guangzhou Branch of the China Construction Bank, and the Government of Ghana would pay later according to the terms of the approved Sellers Credit Agreement.

Local content

The Committee observed that per clause 4.1 of the Agreement, at least 20 percent of the project is required to be subcontracted to local contractors.

The said clause stipulates that “the Contractor shall subcontract up to US$20 Million of contract works to qualified subcontractors to be nominated by the Employer and certified by the Contractor”.

The Minister for Defence assured the Committee that Cabinet has directed that the provision with respect to the 20 percent should be strictly complied with as the minimum local content level, and that, where there are opportunities for further local participation, the contractor would be encouraged to explore same.

He further explained that apart from the 20 percent which will be directly given to local subcontractors, most of the construction materials such as sand, stones, timber and labour among others would also be sourced domestically.

Waiver of taxes and duties

The Committee noted that Clause 14.1 of the Agreement provides that “the Contract Price is US$100,000,000.00 excluding taxes and duties.The Contract Price shall remain fixed for the Construction Period”.

The Committee reiterated an advice to the Ministry of Finance to endeavour to bring a formal request for the waiver of the necessary taxes and duties to Parliament for consideration and approval in time to enable the Project to be executed without delay.

Anticipated variations

The Committee enquired whether or not the Ministry of Defence was contemplating making variations to the Contract and the project designs.

The Committee was informed that the sub-structure designs could be varied based on the type of soil and other unforeseen conditions at each site of the project.

Given however that the project designs had been based on the worst-case scenario of the sites, the Ministry does not anticipate any significant variations to the sub-structure designs.

Source: GhanaJustice/S.Ayisi


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