[ 2012-07-13 ]

ET Mensah, Minister for Water Resources, Works and Housing

More trouble for STX Ghana as govt withdraws sovereign guarantee
The government has withdrawn its sovereign
guarantee for STX Ghana following its decision to
exit from the STX housing project, the Minister
for Water Resources, Works and Housing, Mr Enoch
Teye Mensah, has said.

Consequently, the government, on May 5, 2012,
directed the Ministry of Finance and Economic
Planning and Barclays Bank Ghana to suspend the
guarantee in respect of the housing project.

In an interview in Accra Thursday, Mr Mensah
advised managers of STX Ghana to desist from its
public posturing that it still had a binding
contract in connection with the $1.5 million
concessional facility meant to finance the
project.

But Mr Bernard Kwame Asamoah, one of the partners
of STX Ghana, dismissed the statement made by the
minister, saying that no communication had been
made to him regarding the government’s withdrawal
of its sovereign guarantee for the company.

“I was out of the country and just returned.
Therefore, I may have to cross-check the
information you are relaying to me,” he told Daily
Graphic.

A sovereign guarantee is an undertaking given by
host countries to assure project lenders that the
government will take certain actions or refrain
from taking certain actions affecting the
project.

The government provided a sovereign guarantee to
serve as a financial backbone for STX Ghana in the
execution of the government’s housing project
meant to provide some 30,000 housing units for the
security services.

Mr Mensah said the off-taker agreement entered
into with STX Korea had since ceased to exist,
following the Cabinet’s decision to back out of
the deal.

According to him, the project became stillborn
because of changes in the shareholding structure
of STX Ghana, a development which prompted the
Korean partners to drag their Ghanaian partner, Mr
Asamoah, to court over alleged falsification of
corporate documents and unlawful reconstitution of
the board.

“Government’s position is that since there is no
binding contract, STX Ghana should stop parading
itself that it still possesses the $1.5 million
guarantee to execute the project,” Mr Mensah
said.

“The managers only came to waste everybody’s time
by holding the nation to ransom in connection with
the deal,” he added.

The minister said lands allocated to the company
for the housing project had since been repossessed
by the government.

He said the government was patiently waiting for a
report from the Attorney-General’s Office in
connection with claims it could make of the
aborted project.

Mr Mensah also charged government functionaries to
avoid according managers of STX Ghana platforms
relating to the project which had since ceased to
exist.

The government, in April this year, announced its
decision to pursue STX Korea for the recovery of
all government investments, as well as assets, it
provided for the intended execution of the
abandoned STX housing project.

President John Evans Atta Mills, on January 27,
2011, cut the sod for the commencement of the
project, which at the time was expected to be the
biggest investment made by the government in the
housing sector.

The project was, however, fraught with problems
resulting from the Korean and Ghanaian partners
engaging in a turf war over ownership and control
of the company.

Source - Daily Graphic

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