[ 2010-07-30 ]

STX – Acting before we think
When we initially raised concerns about STX, we
were ignored, persistence however paid off and now
people realize what a bad deal we were being run
into. Even the minority in parliament was
criticized for not flagging the obvious problems
earlier; well they finally got it and succeeded in
getting it withdrawn. However, there is more.
The problems with STX are myriad, whichever way
you look at it STX is such a bad deal, it casts a
very bad shadow on us as a people, especially on
our leaders ability to analyze and judge right. In
raising issues however we had to be selective to
ensure we pointed out pertinent actionable
details, hence our resort to pointing out the
incomplete documentation, the Oil Swap, the
bloated price etc. these however do not take away
the biggest and most serious problem we couldn’t
raise in the earlier in order not to complicate
things.
We have noted with surprise government’s intention
to re introduce STX, and wonder what the fetish is
about this deal which makes the government
prepared to sacrifice everything for it, we are
also surprised that government seems incapable of
even simple analysis or seeing the horrible
problems bedeviling this deal, and is determined
to implement it. Very little analysis would reveal
that this deal is almost incapable of being
implemented successfully.
Financially and technically it is a mess, and as a
national priority it will come after the more
serious problems of Water, Health etc, even when
it comes to the real issue of whether to house
security agencies such as Police, (not Army), in
barracks or not, the thinking is pointing clearly
to a reversal of that paradigm, it is not smart to
remove police from the communities they are
supposed to police; even the colonial authorities
who did that here, (in order to break social links
and facilitate the use of police against their own
people) don’t do that in their country!
It is also interesting to note that The Government
has stated in the 2010 budget, that it will build
‘tent cities’ in the communities to house Police,
and bring them closer to the people! Why take the
people from the communities and then spend money
to build tents to take them closer to the
communities? Who said every police recruit doesn’t
have a home before applying to join the police?
Well, back to STX, The problems are many, exposing
only a few led to the withdrawal. Some mentioned
issues were not even fully exhausted, for example,
issues such as value for money, repayment and
retirement of the sovereign guarantee, have not
been fully gone into. There is still what I
believe is the fundamental issue, -Where does STX
feature in our National Development Plan or
strategy? Do we have, and use Planning at all?
How does a country enter an agreement, which is
one of the biggest in its history, when it is not
part of any long, medium or short-term plan? No
previous plan captures this project; it is not
featured in any national strategy. One would
expect that a project, which could potentially
have serious effects on our economy, would be well
thought through before it would even pass Cabinet,
but apparently even Cabinet did not see this
project in detail.
Note that these houses won’t be sold so they are
sunk costs to be charged on the national purse.
There is no plan for funding this project by
government, i.e. there is no plan as yet to raise
the money to pay for the security houses (if there
is, Government owes it to the public to disclose
how), it means this $1.5 billion will end up in
our national debt in the next 5 years, and have a
serious effect on our currency, prices and the
whole economy, it can trigger a serious
depreciation which will make the whole
redenomination exercise totally useless.
On the other hand, if we properly structure this
project it could be a stimulus to the economy, but
we must admit it must be very different from the
current plan.
We must also note the following:
There are currently no plans with the utilities to
extend utility services to a new settlement of
30,000 homes (the size of Sakumono). Indeed it is
not possible to extend water and electricity to
this new settlement under current situation, and
if government forces the utilities to do so, it
would seriously disrupt ongoing projects and
plans.
It must also be noted that government doesn’t have
the funds to deliver on its commitments under this
deal. Given our current revenues and obligations,
the state cannot fund the offsite infrastructure
required under the STX deal. It is important for
government to explain how it would do this.
We must note that the structure of the deal is
such that if government doesn’t do these things,
it is grounds for repudiation of the whole deal by
STX. In other words, STX can do a third of the
works, and then demand the infrastructure or
refuse to continue; pack off to Korea, and leave
us to pay the money borrowed on our Sovereign
guarantee, and we can do nothing, no Insurance
covers this! The other option would be for
government to ask STX to build the offsite
infrastructure and bill for them, this would allow
STX to bill on extremely high handed terms, which
would make this deal even worse for the economy.
We would like government to show where it would
raise the funds to build the off site
infrastructure it is agreeing to do.
Why would we sign a deal we cant afford, which we
cannot honor, when we have not thought through it,
and when it has serious potential to disrupt our
economy? Why would we do this just because a
private foreign firm with an agent of no
significant track record has asked us to? Or is
there more, why is STX even an issue?
It has been said earlier that STX seems like a
stimulus package for a distressed Korean company,
which required a gullible country to underwrite
it; and Ghana seems to fit the need. That is very
offensive to straight thinking Ghanaians, why do
we entrench our poverty to be some people’s ladder
to wealth?
It is even more baffling that when it comes to
building Barracks and affordable homes we don’t
need any help, so why have we not thrown this STX
irritation away, and if we really need to build
houses as a matter of urgency, why not call our
Construction and Real Estate people and get them
to work as we did with all the other estates in
Ghana?
In many ways STX is a test of the leadership and
people of this country, let’s see how we fare.

Source - Imani

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