IMANI, a policy think tank, has questioned the genuineness of the Chinese Development Bank (CBD) loan expected to be used for the Sekondi Industrial Estate project.
According to the organisation, there seems to be some policy confusion regarding the project. It questioned the capacity of China Hasan International Holding of Hong Kong, government�s public-private-partnership partner, to execute the project, whose real value is not known.
Media reports have estimated the cost of the project at $4 billion and $2 billion at different times. In what it termed an alert, copied to the media recently, the organisation noted that the China Africa Development Fund (CADF) -Bosai project received no mention at all in the government�s strategy paper developed for the CDB Master Facility.
It therefore called on government to re-consider the Sekondi Industrial Estate, one of the anchor projects in the Western Corridor Infrastructure component of the CDB loan facility in order to give it the needed attention.
In February 2011, the Ghana Free Zones Board issued a license to China Hasan International Holding of Hong Kong to become the main public-private-partnership (PPP) partner for the project.
�The decision to award the license to China Hasan comes as a bit of a surprise seeing that all public plans, prior to this action, pointed to a partnership between government of Ghana, on the one hand, and the China Africa Development Fund (CADF) and the Bosai Minerals Group, on the other hand, to develop the Sekondi Industrial Estate on the back of a proposed $1.2 billion alumina processing plant.�
It stated that months before the Sekondi Industrial Estate project was drafted for inclusion into the CDB�s Master Facility Agreement with Ghana in August 2011, the official position of the Ministry of Trade & Industry was that the estate was to be anchored on the CADF-Bosai � Government of Ghana (GoG) partnership.
It emphasised: �It would be good for the Ministry of Trade to clarify if the CADF-Bosai funded alumina plant will be going ahead, if it is on course, and whether it will still serve as the hub of the Sekondi Industrial Estate. And if not, to tell us what is the latest status of the alumina refinery.�
�During the signing of the MOU in Beijing at the China � Ghana Friendship Forum, $2 billion was mentioned. In subsequent announcements and media reports, $4 billion was the quoted figure.
�It is very important for government to come out quickly to reassure Ghanaians that it has conducted thorough due diligence on China Hasan and confident of the Hong Kong � based company�s ability to deliver on its promises should the government spend the $100 million it is borrowing from CDB to develop the basic infrastructure for the estate.�
It stated that any failure to undertake due diligence would slow disbursements from the CDB loan facility and undermine the government�s focus on infrastructure in 2012 � 2013. At any rate, due diligence is required to ensure that even disbursed funds are not misapplied.
�For the avoidance of doubt, government is borrowing the SIE subsidiary loan from the CDB on the premise that the infrastructure the borrowed money is going to be spent on is needed as the foundational prerequisite of the industrial estate.
If it turns out that the PPP partner/lead project financier and developer, in this case China Hasan, has no capacity to deliver on its promises, the entire western corridor infrastructure component could be endangered, since the overall Western Corridor infra program is an integrated one.
IMANI has doubts about the capacity of China Hasan International Holding and track-record following its own checks and analysis of the company�s background, pedigree and antecedents.
�Our investigation so far has uncovered scant trace of Hasan�s ability to raise funds from the capital markets, much less accomplish projects of the scale of the Sekondi-Takoradi Industrial Estate.
�Indeed, we have established that Hasan�s much-touted project in Angola, the only one that it claims to have initiated so far, has not progressed much beyond concept stage, probably due to lack of financing.
This matter is easily confused because the name of the project: �Nova Vida� bears the same name as an older and ongoing project started in the late 1990s by the Angolan government that has seen several houses built over two phases. True, private companies like Aurecon have been involved, but financing has come primarily from Angolan public funds. Hasan did not raise the funds for Nova Vida.
�The Hasan Angolan housing concept, which dates to 2009, has therefore from what we have learnt, not yet materialized in Angola. Hasan�s existence, in actual fact, does not appear to pre-date 2009.�
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