Phenomenon of uncompleted projects in Ghana

Why having so many uncompleted buildings and other physical infrastructure is not seen as a blot on our planning in this country is surprising.

The glow in the eyes of any developer saying that their project is at “lintel level” as an indication of “great progress” is always a surprise to me.

It is usually lost on them that the project may be far from completion.

Provisional information in the 2021 Population and Housing Census (PHC) from the Ghana Statistical Service (GSS) shows that 20 per cent of structures counted in the country are uncompleted.

The Ashanti Region leads with the most uncompleted structures above the national average.

Many uncompleted and unusable structures dot our urban and rural landscape.

One such very striking structure is in Tema; the silos that were built in the era of the CPP still sit uncompleted and unused since the 1960s.

Approximately one-third of projects that start (in Ghana) are never completed, consuming nearly one-fifth of all local government capital spending —

The Political Economy of Unfinished Development Projects: Corruption, Clientelism, or Collective Choice?

Martin J. Williams (2016), Clearly though, the phenomenon is not a preserve of the public sector; many private projects remain uncompleted for decades.

Our collective decisions and what has become a sub-cultural practice is the reason why the proposed National Cathedral could be on the way to becoming another uncompleted building project, unless drastic action is taken to secure funds for the whole project.

As a practicing architect, I have some of my major projects still standing uncompleted.

Have we all become comfortable to having uncompleted projects around us?

From experience, while it takes forever for these projects to be completed for public (Government of Ghana) and private uses, same cannot be said about foreign funded projects i.e., World Bank, Africa Development Bank etc.

These projects get completed.

For most of them, the projects must close or the funds get returned.

The strict timelines and rules, which are independent of political interference ensure the completion of projects.

Are there any lessons we can learn from this?

A project is considered to be complete when it is structurally finalised with all the elements and services, such as, water supply, power, firefighting, external works etc., all completed.

Note though that the project could be usable before total completion.

However, statutorily, a completed building project must have a Certificate of Habitation and be on the record of the Metropolitan, Municipal or District Assembly (MMDA), with a Property Number ready to honour its Property Rate.

Uncompleted projects

There are many reasons for delayed completion or abandonment of public projects in Ghana.

It could be because of policy and focal changes of a new government, poor financial planning or lack of funds.

Sometimes, it is simply a political vendetta.

Take the Affordable Housing Project started under President John Agyekum Kuffour, when President John Attah-Mills took over, a key member of the government, Dr. Tony Aidoo was quoted to have tried justifying in 2010 why the projects should be left untouched.

There are many examples on both sides of the aisle that could be cited.

But the most important question to ask is why politicians start projects without the assurance to timeously honour the full payment to contractors?

The mandate that is needed to start a project in the Public Sector is an approved warrant granted by the Ministry of Finance.

The warrant does not necessarily provide guaranteed cash flow for the project, but rather, a recognition by the Finance Ministry that the project is being executed.

This makes the delivery period fluid.

Regularly, a contractor is mandated to provide a Performance Bond or Guarantee and an Insurance to cover the works when signing the contract to execute works.

The employer (Government of Ghana), in these circumstances, is not bound by law to show evidence of capacity to honour payment.

Just as employers demand Performance Bonds or Guarantees, contractors may also request Payment Guarantees or Bonds from Employers, so that they can call on it should the Employer fail to make payment when they become due.

There are a few contract forms that grant the contractor the right to request Proof of Funds when they are in doubt of the employer’s capacity to continue funding a project.

This Proof of Funds is documentation that attests that an Employer has sufficient funds (money) to complete a transaction.

It is typically issued by a commercial bank to provide confidence or assurance to another party, usually a Contractor; that the Employer in question has sufficient funds to complete a signed Contract.

Unfortunately, you hardly come across one.

Maybe, our stock of contractors believe such demands may affect their chances of being invited to carry out future projects.

Nevertheless, we can learn from some practices in other countries.

Construction contracts in Kenya have evolved to minimize risks to the Contractor.

Their contract form ensures that every contract that is signed requires a guarantee from the Employer that they have secured funds to pay for works executed.

The Joint Building Council of Kenya in Association with Architectural Association of Kenya and the Kenya Association of Building and Civil Engineering Contractors have developed a standard agreement used for projects in their country.

This agreement requires that the Employer also signs a Performance Bond.

Ghana could learn from this to help reduce the incidence of uncompleted or projects with protracted completion periods.

This will ensure better financial planning for projects and prevent Politicians taking us for a ride and to guarantee funds for projects.

Again, many contractors over the years have developed pricing strategies for projects to be sure that they do not suffer losses.

Since there is no assurance for honouring of payments, contractors bid with rates above average going rates.

In some contracts, the rates are in hard foreign currency and payment is honoured in local currency at the rate of exchange when the payment is being made.

This is not a very good thing for planning.

Ghanaians are maybe too optimistic with their project scope and yet too poor to fund their dream projects.

Very few clients start their project with funds available either by themselves or funding support.

This accounts for a high percentage of uncompleted project in the country.

For most self-build projects, developers do not carry out estimates prior to the commencement.

In essence, we build by hope and faith.

Blight

When projects are not completed in any area, it does not carry any penalty. Building Permits are valid for five years and after that a developer could renew for a further five years after a Structural Audit or Integrity Report has been carried out by the issuing authority.

Uncompleted structures become a blight, downgrading property value, as most of such structures become havens for deviant characters and vagrants.

It even affects the security of an area.

The Land Use and Spatial Planning Act 2016 (Act 925) Section 103 is dedicated to the restoration of land use, when an area is blighted.

However, the competence of managing blight by the MMDAs is even undermined from the onset.

The MMDAs also have a very huge stock of uncompleted structures.

In the Tema Metropolitan Area (TMA) for instance, they have a new office building project, a 3-storey uncompleted structure sitting next to their offices.

In such circumstances, how does the office gain the moral right to fight the blight of uncopleted structures?

Role, financial institutions

Getting a finance house to fully engage and assist throughout development of projects needs improvement in this country.

Developers need to start carrying out proper feasibility studies for their projects.

Notwithstanding that interest rates are and other financing costs are high, we have refused to properly evaluate the sunken investment in projects.

We also do not count the cost of possible revenue that could have been accrued if the projects were to have been completed on time.

In some cases, projects delay so much that its potential for income generation is affected.

It may not even be fit for purpose when it is completed.

This is where banks need to fashion specific support when it comes to infrastructure, especially for the private sector.

That could mean scaling down the scope and sizes of projects to realistic levels and even facilitating the merger of some individual developers to make them financially viable.

Resumption of works on uncompleted project sites

When projects are left unattended to for a long time, the resumption of work is never straight forward.

It is usually recommended that a detailed audit is carried out before works resume.

The audit has to cover the functional spaces as well as structural, mechanical, electrical and plumbing audits.

In many instances, due to high humidity a lot of steel and copper elements rust or erode.

It may be necessary to rip out all these elements and replace them.

Concrete sometimes becomes porous and water may seep into the elements and attack the reinforcements embedded in concrete.

These audits should be carried out by qualified professionals.

The issue with cost review is also very important.

Here again financial structuring is relevant.

Rates for carrying out the works must be updated and consideration must be given to possible surprises when the structures are opened up.

In circumstances that Contractors are changed, the legal implications of liability due to defective works would have to be navigated carefully when going forward.

Conclusion

For every five buildings in Ghana, one is uncompleted.

It is time to rethink our approaches to construction in Ghana, its scope, funding and even our legal framework in relation to the sector.

The larger portion of materials used towards the completion of projects are imported.

Items, such as, lights, ceiling components etc., are mainly imported and require foreign exchange.

We need to take a critical look at increasing the percentage of local materials in our designs.

Additionally, we need to look at decentralisation of projects all over again.

If a local need assessment is confirmed and the beneficiaries are involved properly, there is a higher probability for projects to be completed.

Until a number of our approaches and policies to construction are changed, we are likely to register an increase in the percentage of uncompleted buildings in the next census.

God bless our homeland Ghana.

Let’s build our nation great and strong.

The writer is an architect