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Gov’t Must Explain Its Commitments To rLG’s $10 billion ‘Hope City’ Project   
 
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10-Mar-2013  
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The Danquah Institute, like well-meaning citizens and entities in Ghana, is excited by the announcement made by the Chief Executive Officer of rlg communications, Mr Roland Agambire, that it plans to build Africa's tallest building, and ICT infrastructure to create value-adding jobs and put Ghana at the centre of the global ICT market.

Even more exciting is the fact that rlg has, by this US$10 billion project, called Hope City, made a huge leap to what it announced earlier in December last year, that it was to begin by January this year the construction of a US$100 million technology park in Ghana. See http://www.ventures-africa.com/2012/12/rlg-to-build-100m-technology-centre-in-ghana/

The Danquah Institute maintains that government must be proactive in providing the environment plus other opportunities for the private sector, Ghanaian private sector, especially, to enable them to grow to create wealth, jobs and other opportunities for the greater benefit of society. Also, Ghanaian entrepreneurs, such as Mr Agambire, deserve all the extra legitimate support that government can offer. We welcome public-private-partnerships (PPP) as one of the necessary means of achieving this.

The Hope City project is said to be a PPP project. The brochure launching Hope City says this US$10 billion project is being done “in collaboration with the Government of Ghana, as part of the National Development Policy Framework”.

President John Mahama reinforced the involvement of the government in this project when he stated at the sod-cutting ceremony last week, “I want to assure that government will offer the necessary support to rlg…”

The details, however, of this partnership is extremely scanty. For what would be the biggest ever project to be launched in Ghana, matched only by the miscarried US$10 billion STX deal for the construction of 200,000 housing units in Ghana, the public interest in this PPP must not be belittled.

We, at the Danquah Institute, wish to find out from government and indeed, rLg communications, what is the nature of the commitments, financially and the like, is government making, on behalf of the Ghanaian people, towards this US$10 billion project. The 2013 budget is surprisingly quiet on the Hope City project, which is due to start this year and to be completed in 2016.

While we welcome the fact that this PPP is in support of a Ghanaian-owned enterprise, we cannot ignore the bad negotiation skills that were employed by government in previous transactions, notably, that other US$10 billion project with STX Korea.

It is recalled that the memorandum of understanding between the Government of Ghana and STX, led and witnessed by the then Vice President John Mahama, stated that the Korean company intended to build the houses in furtherance of the “Ghana National Housing Project”, “providing that STX is granted necessary support and cooperation by GOG....”

As it turned out, the necessary support and cooperation meant funding for the project. STX, in spite of all the pre-contractual hype, was wholly dependent on Ghana Government’s sovereign guarantee (preferably supported by oil collateral) in its albeit abortive attempts to raise money for a project, which was to be mostly owned by the private investor, STX.

Like STX, is Government of Ghana required to issue a sovereign guarantee for this new US$10 billion project to build a technology centre? If so, what are the details?

Like the US$10 billion STX construction project, which was in line with the Ghana National Housing Project, this US$10 billion Hope City infrastructural project is, according to rLg, in realization of the ICT component of the “National Development Policy Framework”.

What are the details of this partnership and the cost of the realization of this project to the public purse?

These are legitimate issues in light of the record 12.1% fiscal deficit of 2012; the record of this NDC government (from 2009 to date) to saddle this country with poorly negotiated deals, where little or no serious value-for-money analysis were done and; the lack of clarity in government’s commitment to invest boldly and prudently in what most Ghanaians may consider to be priority areas: tackling the water and electricity crisis.
 
 
Source: Danquah Institute/Ghana
 
 

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