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Saglemi Housing Project To Ballon To $400m

The Saglemi Housing Project in the Ningo Prampram District could cost over $400 million for the construction of just 1,506 units, exceeding initial estimates.

The project was designed to build 5,000 homes on 2,172 acres of land with a $200 million loan, a two-year grace period, and a five-year repayment period with a 12.5% interest rate per annum on the cedi equivalent of the dollar loan amount based on the dollar cedi exchange rate fixed at drawdown.

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According to sources, the total debt to be serviced is $249.6 million, and the sale of 5,000 units was to generate $257.27 million.

However, the bank deducted $1.550 million as charges and paid $198.45 million into an escrow account. The $196.4 million spent on the project yielded only 1,506 units, instead of the proposed 5,000.

The 2-bedroom units are to be sold for $29,000, and 3-bedroom ones for $57,000. An additional $114 million investment is required due to a demand for compensation by the contractor, Construtora OAS Ghana Limited, which terminated its contract with the government on February 18, 2019.

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The contractor requests a sum of $68 million to complete housing units and other on-site infrastructure works.

The cost also includes $30 million for water supply, $8 million for electricity supply, and $5 million to provide storm drains. Additionally, the cost of the project could rise to $310.4 million.

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Overall, the total cost of the Saglemi Housing Project, including interest, would be $371.27 million, and if the interest on the additional $114 million is also secured at the same 12.3%, the construction costs would exceed $400 million for the 1,506 Saglemi housing units, a development that has led to prosecution of some actors.

Credit to Daily Guide

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