By William
Yaw Owusu
Thursday
May 31, 2018
The contract signed between the erstwhile Mahama’s
National Democratic Congress (NDC) administration and the Africa & Middle
East Resources Investment (AMERI) Group, which experts described as a rip-off
of public funds, is beginning to bite the country hard.
This is because after months of deliberations, the
Attorney General, Gloria Akuffo, has stated emphatically that there are going
to be damning financial consequences for Ghana, if the Ministry of Energy wants
the deal abrogated.
The AG has not said the agreement is clean or good,
although she agrees that it is a one-sided and unfavourable agreement the
Mahama government signed on behalf of the people of Ghana.
The
Agreement
The Mahama government signed the Built Own Operate
and Transfer (BOOT) agreement with AMERI in 2015 for the supply of 256mw of
power, but it is evident that Ghana is losing about $150 million as a result of
lack of due diligence on the part of officials who negotiated the deal on
behalf of the people of Ghana.
The agreement had been drafted with “the most
ironclad clauses ever seen in Ghana’s agreements with private entities; and
there is no way the government is not going to suffer if the deal is
truncated,” noted a financial analyst.
Ministerial
Committee
In the heat of the transition, Energy Minister
Boakye Agyarko set up a 17-member Ministerial Committee chaired by Lawyer
Phillip Addison, to look into the previous government’s AMERI deal; and the
committee had recommended to the government that it should call back owners of
the Dubai–based company for re-negotiation and advised that should the company
refuse to honour the invitation for re-negotiation, the government should
renounce the agreement on grounds of fraud.
The whole BOOT Agreement between Ghana and AMERI
Energy was estimated at $510 million, and it involved among other things, the
installation of 10 General Electric TM 2500 aero-derivative gas turbines at the
Aboadze Power enclave, near Takoradi in the Western Region.
Minister’s
Letter
On May 19 and October 31, 2017, the Ministry of
Energy sought legal advice from the AG on the decision by the government to
suspend monthly payments for AMERI; the necessity or otherwise of obtaining a
court order in support of the suspension of payments and also to determine
whether the case should be adjudicated in Ghana or outside.
On November 27, 2017, the AG in a letter sighted by DAILY
GUIDE, provided legal advice and explained the circumstances under
which the AMERI deal could be abrogated.
Payment
Suspension
On the suspension of monthly payments, the AG stated,
“No allegation of either a default or a breach under the BOOT Agreement on the
part of AMERI has been made by the government. AMERI has provided and continues
to provide power for the use of the government in accordance with the
agreement, albeit through its agent, Power Projects Sanayi Insaat Ticaret
Limited Sirket.”
The AG said documents made available indicated that
“the BOOT Agreement was originally purportedly entered into on a sole source
basis.”
She averred, “For the BOOT Agreement to be valid on
the basis of single source procurement therefore, at least one of the
exceptional circumstances provided under Section 40 of Act 663 as amended must
have existed and the procuring entity must have received approval from the
board of PPA.”
The AG pointed out, “It does appear however, that
the then Ministry of Power did not originally follow due process in the
procurement of the services of AMERI as per the BOOT Agreement via single
sourcing.”
Power
Crisis
Ms Gloria Akuffo said there was a power crisis in
the country during the period within which the agreement was concluded and a
decision to proceed under single or sole source procurement process would be
justified under Section 40 (b) of the Procurement Act.
The AG said in her opinion, the Ministry of Power under
Kwabena Donkor, subsequently obtained ratification for the procurement upon
application by the PPA on January 25, 2016, adding, “The otherwise invalid
agreement was rendered valid when it was ratified by the board of PPA.
“In the absence of any default or breaches of any
obligations on the part of AMERI as specified in the agreement, the government
is obligated to make payments to AMERI on a monthly basis under Section 10(a)
of the agreement and non-fulfillment of government’s payments would entitle
AMERI to draw down on the Stand-by Letter of Credit of $51 million per Section
11 (i).”
AG’s
Concerns
The AG said the legal effect of the Stand-by Letter
of Credit issued by the Mahama administration to AMERI “is unfavourable to the
government and overly favourable to AMERI.”
According to Ms Akuffo, “It gives AMERI the
opportunity to call on the full $51 million after collecting the required
payments under the BOOT Agreement, without having to give notice to the
government, even when there is an invoice dispute between the parties.”
The AG said the government’s legal position would
have been better protected if it had signed a Power Purchase Agreement (PPA),
which would have enabled a proper risk allocation.
Financial
Aspect
The AG further said that the government’s main
complaint stems from the financial aspect of the BOOT and related Agreements, claiming,
“Whereas the deferred payment facility agreement provides that the maximum
total cost of the projects over the five-year term is approximately $360 million,
the BOOT Agreement itself provides the cost of the project will be a minimum of
$510, a significant difference of $150 million.”
Ms Gloria Akuffo asserted that the then government
sat down for AMERI - a private entity - to assume a stronger bargaining
position in all aspects of the agreement and the current government has no
option but to follow what AMERI has to say because the agreement was freely
signed between the parties.
Norwegian
Newspaper
“Responsible officers of government executed the
agreement amid calls by a Norwegian and members of the public of the exorbitant
cost of the project. But neither the government nor parliament, which
subsequently granted approval for the agreement, found it necessary to conduct
any due diligence that may have resulted in a better deal for the government.”
No comments:
Post a Comment