Posted on: www.dailyguideghana.com
By William Yaw Owusu
Monday, April 10, 2017
Bright Simons, a brilliant
social innovator and researcher, has revealed that the contract signed between
the Mahama-led National Democratic Congress (NDC) government and the Middle
East Resources Investment Group LLC, also known as AMERI Group or AMERI Energy “might
be the most outrageous swindle this country has seen in the last decade.”
According to the founder and
president of mPedigree, Ghana paid $260 million more in the deal which translates
into 21% per annum, saying, “That 21% effective annual interest rate is the
product either of criminal incompetence or sheer recklessness, which leads many
right-minded persons to suspect underhand dealings.”
Giving the breakdown, he said
his research showed that $110 million went to the people who actually procured
the plant and did all the work - Metka/PPL and $150 million to the broker,
which is AMERI.
Outlandish Claim
Mr. Simons, who is also affiliated
to IMANI Ghana, a think tank, said his analysis of the controversial deal had
been informed by what he called the ‘outlandish’ claims by former Deputy
Minister of Power, John Abdulai Jinapor, under the previous NDC government to
defend the deal.
$510 BOOT
The $510 million Build, Own,
Operate and Transfer (BOOT) Agreement came under the spotlight once again after
the Ministry of Energy had tasked a committee chaired by popular lawyer,
Phillip Addison,to restructure the deal.
The committee recommended to
the government to call back owners of the Dubai-based company (AMERI) for
renegotiation.
It said that in the event
that AMERI Energy refuses to come to the negotiation table “GoG should
repudiate the Agreement on the grounds of fraud.”
It stated, “The Committee
recommends that Ameri Energy should be invited back to the negotiation table to
address and remedy the issues enumerated in this report and for GoG to aim to
claw back a substantial portion of the over $150 million commission.”
NDC Opposition
However, the opposition NDC,
which signed the deal whilst in office, has been speaking strongly against the
new government’s move to get AMERI back to the negotiation table, making many
wonder if the opposition party has Ghana’s interest at heart.
Former Power Minister, Dr.
Kwabena Donkor, who supervised the signing of the controversial deal, and other
NDC ministers together with the minority MPs in parliament, have condemned the
NPP government for taking steps to re-examine the deal.
“The comparable cedi interest
rate is 50% (accounting for the dollar-cedi inflation and exchange rate
depreciation differentials); it is MADNESS for any sovereign state to borrow at
such rates!” Mr. Simons said.
He added, “But that is
effectively what we have done in this AMERI deal! It is an implied loan at a
cut-throat interest rate!
“Do we have even table-top sellers paying that
kind of interest to microfinance companies in Ghana?” he queried.
Total Rip Off
The mPedigree founder said
that had Ghana borrowed $250 million over five years to buy the power
plant-units and pay for the balance of plant auxiliaries, the total cost would
have been $325 million and added that Ghana would have paid $360 million if the
country used a contractor alone without engaging any broker like AMERI.
He said in the end, Ghana
will pay $510 million, because it used AMERI as the broker, saying, “What is so
damn difficult about seeing that a GREAT SWINDLE has taken place? Perhaps the
worst such swindle of the last two decades?”
Cost Of Financing
There are two major aspects
responsible for the confusion, Mr Simons
claimed, and mentioned them as the cost of financing, as well as the integration
of the unit plants into a whole called "balance of plant.”
“Because these are modular,
compact, self-contained plants, the ‘balance of plant’ is also more or less turnkey
and is available on the open market.”
He noted, “This is starkly
different from what is the case when building a normal thermal plant. Dozens of
projects examined show an average of about 10% of total plant cost going to
balance of plant costing (for the Tm2500+) the balance of plant is often
trailer-mounted and can be assembled in a few weeks.”
Tough Negotiator
He said that a tough
negotiator “can bring down the pricing as we have seen in Indonesia and Egypt,
where per MW prices for some of these deals have gone as low as $500,000.
Remember that in AMERI's case we are paying more than $2 million per MW in
capital costs alone!”
Mr. Simons said that General Electric
(GE), which sold the 10 TM 2500 aeroderivative gas turbines with AMERI as the
broker, had also sold thousands of these plants directly and through
engineering partners.
GE Financing
He said GE has a massive
financing arm that enables prospective customers to obtain advice on how to
structure the financing for these plants, adding that Ghana should have taken
that option and not use AMERI as a broker.
“These plants are designed
for delivery during emergencies so GE is very familiar with the financing needs
of customers pressed for time and short on cash, and can recommend solutions.”
“Ghana needed 10 plants, which
are sold for $22 million each, saying we needed 256 MW and obviously wanted a
financing option we could afford. So we went to a company called Ameri to put
together a turnkey project that will help us procure the solution.”
He said, “Ameri went to a
Turkish company called Metka, which bought the equipment from GE. Metka brought
in an affiliate called PPL that supplied the components and engineering
manpower used to integrate the plants into a single whole. The ground works
were executed at Ghana's cost by Engineers & Planners.”
Mr. Simons observed, “Ameri
then signed an agreement with Ghana in which Ghana will pay for the plants over
a period of 5 years in monthly installments of about $9.9 million. Ghana
obviously also pays for the fuel and other operational and other servicing
costs. Think of this as 'hire purchase', or what the taxi drivers call ‘work
and pay'.”
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