Posted on: www.dailyguideghana.com
By William Yaw Owusu
Wednesday, June 24, 2015
Trade and Industry Minister Ekow Spio-Garbrah’s comment that some “evil politicians” are trying to “rape the country's treasury” in wake of the Bankswitch judgement debt saga is raising eyebrows.
The cancelation of the IT firm Bankswitch contract that brought about GH¢197 million judgement debt continues to generate heated but unending political debate about how some government official take unilateral decisions.
Matters came to a head when Mr Spio-Garbrah on Wednesday June 3, 2015 wrote five Destination Inspection Companies (DICs) with the capacity to contribute $35 million each towards repaying the Bankswitch judgement debt for contracts.
$175m versus GH¢ 197m
It means that the government will receive $175 million from the five DICs should they be able to afford the amount to settle GH¢ 197 million.
With current exchange rate of cedi to dollar at interbank rate as at Friday pegged at GH¢4.27, the NDC government will be raking in GH¢841million far in excess of the GH¢ 197 million judgement debt to Bankswitch.
The ministry in an attempt to parry its critics issued a statement and said members of the NPP government who negotiated and signed the Bankswitch contract, some current NPP MPs, their associates in civil society and friends in the media, “who wish Ghana harm can distort MOTI's action and pretend it is some kind of bribe or scandal.”
The statement said “however, when it is understood that MOTI is rather trying to help save the people of Ghana from an evil plot by some businessmen and politicians to rape the country's Treasury, then right-thinking men and women should sit up.”
DAILY GUIDE learnt that upon assumption of office, powerful NDC personalities wanted the Bankswitch contract canceled but after heads of the various revenue agencies demonstrated to President J.E.A Mills that it was the right step to take, the late Professor agreed.
Reports say even Fifi Fiavi Kwetey, then deputy Minister of Finance in charge of revenue mobilization was impressed with the capabilities of Bankswitch helping to rake in more revenue from the ports.
President Mills is reported to have then ordered Bankswitch to continue working for at least three months for the government to assess their performance but then new Trade Minister Hannah Tetteh allegedly went ahead to call for cancelation a few days later, to the shocking disbelief of President Mills.
Feeling shortchanged after setting up its monitoring centre, Bankswitch in 2014 filed before the Permanent Court of Arbitration, in The Hague, The Netherlands after the cancellation of a contract signed in 2007 to help government mobilize revenue at the Customs Division of the Ghana Revenue Authority (GRA).
Bankswitch demanded the payment of GH¢853 million in damages for the cancellation and according to the rules of court, each party to the case was to appoint an arbiter.
The two arbiters then appointed a third person as president of the Court to hear the case and sources said that Ghana refused to appoint its arbiter forcing the hand of the court to chose one for the country.
When a teleconference was set up in 2014 at the Kofi Annan Center to enable Ghana call its witnesses, no government official showed up to question witnesses.
However, before the judgment was delivered, government filed papers explaining the contract was cancelled because it did not have parliamentary approval.
The Permanent Court of Arbitration rejected the explanation, ruling that a local law cannot be used to relieve Ghana of its international obligation and Ghana was subsequently asked to pay in excess of 197million in judgment debt.
Details Of The Deal
Dr Spio-Garbrah confirmed on Oman FM yesterday, that the contract was awarded by the Kufuor government on 2007 and abrogated by the Mills administration and that brought the debt.
He said details of how the deal with the DICs would work was before the Ministry of Finance and the Attorney General and insisted that he was not acting alone.
“On details of how many years or how much money the DICs are going to make; we are not there yet. We have not signed any contract yet. At this stage it is only an expression of interest.”
He said that the government had started paying the debt to Bankswitch but when the IT firm wanted to renegotiate the deal that could make them receive a whooping GH¢1 billion spread in five years from the state, his ministry decided to intervene.
When asked whether the DICs move was not in contravention of the procurement laws, the minister said he had not broken any law, saying “it is for the avoidance of paying GH¢1 billion that we are engaging the DICs.”
“I have done my part. I have forwarded everything to the Ministry of Finance and the AG to determine whether we should proceed with the deal.
Dr Spio-Garbrah said he did not want to make public backroom discussions on the deal when the host, Fiifi Boafo asked him if he was not jumping the gun in inviting the five DICs to pay $35 million each in exchange for contracts.
Interestingly, Dr Spio-Garbrah wrote to the five DICs at the same time that the government was terminating their contracts at the ports to pave way for the implementation of the National Single Window by September, 2015.
“To pay this debt, government of Ghana is informing all destination inspection companies that any of them who can advance government of Ghana an amount of 35 million dollars would be awarded a contract of 0.35 per cent of free on board values on all Ghana’s imports for at least a period of five years to enable that company recover its investments,” the letter read.
“For the 0.35 per cent FOB payment, any of the companies which make the $35 million contribution will do relevant trade facilitation within the context of the National Single Window and work with West Blue Consulting - which has been identified to implement the single window programme - on aspects of that exercise and said however, that West Blue will be paid separately.
However, Nana Akomea, Communications Director of the NPP said it was strange for Dr Spio-Garbrah to promise the five DICs contracts since the Chief of Staff had already ordered that only one company called West Blue should be given contract to implement the National Single Window from September 2015.
“It is a non-starter. These are procurement laws they are trying to abuse,” he said.
“Spio continues to talk about the debt but he forgets to talk about how the debt has come to hit us in the face. Who canceled the contract? People have to be punished for some of these things.”