Saglemi Housing Scandal: Collins Dauda, Others granted Bail

Alhaji Dauda granted self-recognisance bail

A Criminal Court at the High Court Division in Accra granted Alhaji Collins Dauda, a former Minister of Works and Housing, self-recognisance bail.

Court orders Alhaji Dauda to deposit his passport with the court’s registry

The court, presided over by Justice Mrs Comfort Tasiame, ordered Alhaji Dauda to deposit his passport with the court’s registry.

Alhaji Dauda, Member of Parliament (MP) for Asutifi North, has additionally been charged for intentionally misapplying public property.

Dauda, together with another former Minister for Works and Housing, Dr Kwaku Agyeman-Mensah; Alhaji Ziblim Yakubu, chief director of the ministry; Andrew Clocanas, a businessman; and Nouvi Tetteh Angelo, are also facing the charge of issuing a false certificate.

Clocanas and Tetteh have also been additionally and jointly charged for dishonestly causing financial loss to the State.

52 Charges

They are facing 52 charges for various roles said to cause the State to lose money it borrowed to construct 5,000 housing units.

They are expected to reappear on October 13.

Godfred Yeboah Dame

Mr Godfred Yeboah Dame, the Attorney General and Minister of Justice, earlier informed the Court that the state was not opposed to bail and drew the court’s attention to the fact that Dauda was the only one holding public office.

As a result, Mr Dame said he should be granted self-recognizance bail subject to the deposit of Alhaji Dauda’s passport at the Court’s Registry.

In the case of the other accused persons, the Attorney General said the amount and condition of bail must commensurate with the specific sums of money of which they were standing trial and they must also deposit their respective passports at the Court’s Registry.

He explained that the basis of praying the Court to request the accused persons to deposit their passports was that they would have to notify the court before travelling.

Lawyers of the accused persons, took turns to apply for bail for their clients.

Thaddeus Sory is lawyer for Alhaji Dauda

Mr Thaddeus Sory, who represented Alhaji Dauda, informed the court that his client was a member of the Pan African Parliament and that he was required to make consistent travels outside Ghana.

He noted that from the submission of the Attorney General Dauda was not a flight risk.

Godwin Edudzi Tamakloe is lawyer for Dr Agyeman-Mensah and Alhaji Yakubu

Mr Godwin Edudzi Tamakloe, who represented Dr Agyeman-Mensah and Alhaji Yakubu, said his clients had complied with Police from the time investigations commenced.

He prayed the court to admit the two to bail similar to the one given by the Police, adding that Dr Agyeman-Mensah was over 72 years.

Reindoph Twumasi Ankrah is lawyer for Clocanas

Mr Reindoph Twumasi Ankrah, who represented Clocanas, said his client had complied with every directive of investigators hence Clocanas should be granted bail without any justification.

Ziyerli Agambilla is lawyer for Angelo

Ziyerli Agambilla who represented Angelo, said his client was a single parent with two toddlers and therefore should be granted bail.

Circumstances leading to the award of the contract

The AG’s office, in the court documents, recounts the circumstances leading to the award of the contract and what investigations have revealed.

Ex-president John Mahama granted executive approval in August 2012

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.

Credit Suisse offered Buyer’s Credit of $200m

The project was to be funded by a Buyer’s Credit of $200 million provided by Messrs Credit Suisse International (Credit Suisse).

Parliament granted approval on October 31, 2012

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 Enoch Teye Mensah, and the then Minister for Finance and Economic Planning, Dr Kwabena Duffour.

Facility Agreement signed on January 4, 2013

On January 4, 2013, a Facility Agreement was signed between the Ministry of Finance, as the borrower, and Credit Suisse, as the creditor, for a facility of $200 million for the construction of 5000 housing units.

EPC agreement signed on January 4, 2013

On the same day, the then minister, E.T. Mensah signed an Engineering, Procurement and Construction (EPC) Agreement with Construtora OAS Ghana Ltd, represented by the 4th accused for the construction of affordable housing units at Saglemi in the Greater Accra Region.

2,172 Acres of land

The project, which was to be executed in four phases on 2,172 acres of land, was at a contract price of $200 million, including consultancy services.

Escrow Management Agreement

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), Works and Housing Ministry (Account holder), the Bank of Ghana (Account holding bank) and Construtora OAS (Contractor).

Proper application of funds

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.

Payments be effected only when specific works are duly executed, verified and certified

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, Architectural and Engineering Services Ltd. (AESL).

EPC Agreement provided for an advance payment of 40%

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

Contractor required to set out details of the achieved 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.

Credit Suisse disbursed $200m on January 9, 2013

On January 9, 2013, Credit Suisse disbursed an amount of $198,450,000, representing the $200 million Jess fees and transaction expenses into the Escrow Account.

2 years grace period, 5 years repayment period at a 12.5% interest rate per annum

Per the agreement, the $200m has a grace period of two years and repayment period of five years at a 12.5% interest rate per annum on the cedi equivalent of the USD loan amount based on USD:GH¢ exchange rate fixed at drawdown.

$249.6m was estimated total debt to be serviced

The total debt to be serviced was estimated to be $249.6 million while total sale proceeds of the 5,000 housing units will bring in $257.27 million.

2-bedroom for $29,000, 3-bedroom for $57,000.

According to the agreement, the 2-bedroom unit is to be sold at $29,000 while the 3-bedroom unit is to be sold at $57,000.

$80m paid contractor on February 27, 2013On February 27, 2013, an amount of $80 million, representing 40% of the contract sum, was transferred to Construtora OAS as advance payment.

The contractor is, however, said to have failed to apply the amount towards the purpose for which the payment was made.

$196.4m spent on the project

A total amount of $196.4 million ($196,428,891.66) has been spent on the project.

$179.9m paid contractor

But according to the documents filed in court, the contractor who executed the Saglemi project was paid $179.9 million ($179,904,757.78) despite executing work worth $64 million ($64,982,900.77).

651.75 acres out of the 2,172 acres of land developed

Out of the 2,172 acres of land released to the contractor, the contractor is said to have developed just 651.75 acres.

Alhaji Dauda reviewed the original EPC without any parliamentary approval

On February 27, 2014, Alhaji Dauda, who had assumed office as the new minister, without any parliamentary approval, reviewed the original EPC and signed the First and Restated Agreement with Construtora, represented by its Executive Chairman Andrew Clocanas.

Alhaji Dauda changed the scope of works

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

Project divided into 3 phases

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 1,502 housing units.

This was contrary to the executive and parliamentary approvals, as well as the Facility and Escrow Management Agreements.

668 Housing units completed

The Attorney General said none of the completed 668 housing units is habitable, creating a situation where none has been purchased, loan facility remaining unpaid and causing a huge financial loss to the state.

Additional $32m required to complete the project

Current Works and Housing Minister, Francis Asenso Boakye early this year announced that an additional $32 million would be required to complete the controversy-ridden Project.

Alhaj Yakubu reviewed the First and Restated Agreement

However, on December 21, 2016, Alhaji Ziblim Yakubu, without recourse to Parliament, reviewed the First and Restated Agreement and signed the Second and Restated Agreement.

Scope of works further reduced at revised contract price of $l81m

This led to a further reduction in the scope of works to 1,412 housing units at a revised contract price of $l81 million ($l81,018,000) and extended the completion period of the contract to July 31, 2017 without any basis.

$46.1m paid between March 2014 and January 2015

Between March 2014 and January 2015, an amount of $46.1 million ($46,131,153.41) was paid to the contractor, Construtora OAS.

Alhaji Dauda and Alhaji Yakubu authorised and approved payments

These payments were authorised and approved by Alhaji Dauda and Alhaji Yakubu without any evidence of specific project milestones achieved by the contractor as required under the EPC Agreement.

No justification of appropriate use of $80m advance payment

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

$54m paid between June 2015 and January 2017

Between June 2015 and January 2017, a further amount of $54 million ($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.

Nonetheless, Agyeman-Mensah and Alhaji Yakubu ordered for the payments to be made.

Further payments were also made to the three consultants: AESL, VHM and RMS, far in excess of the $5 million stated as consultancy fees in the original EPC agreement without any evidence of work they had done.

No verification and certification of actual work done by the contractor

There was no verification and certification of actual work done by the contractor as required under the EPC Agreement.

Consultancy services awarded 3 times

The Attorney General and Minister of Justice also revealed that consultancy services under the Saglemi Housing Project were awarded three times.

$13m paid for consultancy services

The three cost the taxpayer an estimated $13 million, far exceeding the $5 million provided under the Engineering, Procurement and Construction (EPC) Agreement for consultancy services for the construction of the 5,000 housing units.

AESL awarded consultancy services

Document filed by the Attorney General shows that Architectural & Engineering Services Limited (AESL) was awarded the contract for consultancy services.

AESL subcontract consultancy services to VHM

However, in April 2013, AESL decided to subcontract its services to Vito-Hugo-Coordenacaoe Gesto De Projectos (VHM) for a period of 24 months.

VHM – $2.9m, AESL- $2m fees

Details of the contract indicate that a maximum amount of $2.9 million ($2,987,750) was to be paid to VHM while AESL was to receive not more than $2 million.

While VHM and AESL were said to have been providing the services, the Ministry of Works and Housing in April 2015 allegedly entered into another contract for consultancy services with Ridge Management Solutions DEC-LLL (RMS).

RMS paid $5.6m

The new contract was to span a period of three months at a contract sum of $5.6 million, and RMS was represented by its director and majority shareholder, Nouvi Tettey Angelo.

40% advance payment is outside the EPC Agreement

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

RMS not registered in Ghana at the time contract was signed
According to the Attorney General, at the time the contract was awarded to RMS, the company was not registered in Ghana.

Nouvi Tettey Angelo is shareholder, director in both VHM, RMS

In the documents filed in court, the AG’s office disclosed that its investigations revealed that Mr Angelo is also a Director of VHM, the company AESL had subcontracted the same consultancy services to two years earlier.

Dr Agyeman-Mensah signed RMS contract for $2.5m

It was pointed out that in August 2016, then Minister of Works and Housing, Dr Kwaku Agyeman-Mensah also allegedly entered into yet another consultancy agreement with RMS and christened it “marketing implementation services” for a sum of $2.5 million ($2,502,198.00).

Once again, the ministry was required to make an advance payment of 40% of the contract sum.

The Attorney General noted that all this while these consultancy services were being performed by AESL and VHM as per the agreement signed in 2013.

This, the Attorney General claimed, had been extended at various times by Dr Agyeman-Mensah and Ziblim Yakubu, former chief director at the ministry.

The Attorney General revealed that further payments were made to AESL, VHM and RMS far more than the $5 million stated as consultancy fees under the original housing project agreement.

It said these payments were made without any evidence of work done contrary to the contract’s requirement.

Alhaji Dauda and Alhaji Yakubu authorised and approved payments

These payments were authorised and approved by Alhaji Dauda and Alhaji 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.

$54m paid between June 2015 and January 2017

Between June 2015 and January 2017, a further amount of $54 million ($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.

Nonetheless, Agyeman-Mensah and Alhaji Yakubu ordered for the payments to be made.

Further payments were also made to the three consultants: AESL, VHM and RMS, far in excess of the $5 million stated as consultancy fees in the original EPC agreement without any evidence of work they had done.

There was no verification and certification of actual work done by the contractor as required under the EPC Agreement.

Alhaji Dauda authorised payments

Alhaji Dauda approved several payments, including $27.7 million ($27,789,981.73) paid between June and August 2014; $7.5 million ($7,513,451.72) paid in November 2014; $10. 7 million ($10,773,849.16) paid between December 2014 and January 2015; $38.5 million ($38, 563, 830.89) paid between June and January 2015; $1.3 million ($1,350,000) paid between November 2013 and December 2014; $2.2 million ($2,240,812.50) paid between November 2013 and September 2015; $1.1 million ($1,195,100) paid between November 2013 and March 2014, among others.

Dr Agyeman-Mensah and Alhaji Yakubu jointly authorised several payments

Dr Agyeman-Mensah and Alhaji Yakubu also jointly made several payments including $7.6 million ($7,655,077.66) paid between April and June 2015; $7.7 million ($7,762,550.70) paid between March and April 2016; $2.2 million ($2,240,000) paid between April and June 2015; $1.6 million ($1,688,401.32) paid between April and September; $1.6 million ($1,688,405.52) paid between April 2015 and January 2016; $14.4 million ($14, 479, 247.20) paid between October and November 2015; $9 million ($9,013,880.21) paid in December 2015; $3.9 million ($3,941,660.44) paid in July 2016, among other payments.

Dr Agyeman-Mensah authorised several payments

Dr Agyeman-Mensah individually paid $7.7 million ($7,746,574.50) paid between July and August 2015 and $1 million ($1,000,879.20) paid between September and October.

Alhaji Yakubu authorised several payments

Alhaji Yakubu also made several payments, including $1.6 million ($1,614,242.23) paid between April and May 2017; $2.1 million ($2,198,595.06) paid between May 2015 and January 2017; $1.6 million ($1,614,242.23) paid between January and March, among others

Andrew Clocanas received payment of $179m

Andrew Clocanas received payment of $179 million ($179,904,757.78) between February 2013 and May 2017.

Nouvi Tettey Angelo issued certificate for payment

Nouvi Tettey Angelo between March 2014 and July 2017 issued a certificate for payment of $8.6 million ($8,662,029.20) and did the same for payment of $4.7 million ($4,738,182.54) between March 2014 and January 2017.

Source: Elvis DARKO || The Finder, Accra