President Nana Addo Dankwa Akufo-Addo has approved a framework for negotiations with the successful bidder(s) in the ongoing resolution of the Saglemi Housing Project. The approval was in response to a request sent to the President by the Minister for Works and Housing, Kojo Oppong Nkrumah.
Sources familiar with the development say under the framework, the current value of work done at Saglemi will be treated as government equity in the project. In contrast, the completion cost will be treated as the equity of the selected partner in a Special Purpose Vehicle (SPV) to be established for the completion of the project.
Proceeds from the sale of the houses when eventually completed will be shared between the government and the private partner in accordance with their stake in the SPV. Originally designed to deliver 5,000 affordable housing units, the Saglemi Housing Project received approximately $200 million in government financing. However, by the time the project was halted, only 1,506 units had been partially completed, with the development deemed uninhabitable due to the absence of essential infrastructure such as water, electricity, and sanitation.
A subsequent valuation conducted by the Ghana Institute of Surveyors estimated that an additional $100 million would be required to complete the 1,506 unfinished units; financing which the government could not provide. The Cabinet then approved sourcing private-sector financing and technical expertise to complete the project. A Request for Proposals (RFP) was issued in April this year to achieve this objective.
To ensure a fair and transparent process, the government engaged Deloitte Ghana as the Transaction Advisor to evaluate bids submitted by Afro-Arab Properties Ltd, Quarm-LMI Consortium, Dredge Masters-Titanium, Broll Ghana Ltd, and Masiltin Group on July 8, 2024.
According to the timeline, the Transaction Advisor will present the preferred bidder(s) to the Ministry of Works and Housing by mid-September. Once presented, the government will negotiate to establish terms favourable for setting up a Joint Venture between the two parties. The SPV formed through this partnership will be responsible for the construction and operationalization of the 1,506 housing units.
The President’s approval of the framework clears the way for negotiations to begin, pending the completion of the evaluation and the submission of the preferred bidder(s) by the Transaction Advisor.
Source: Citi Newsroom
