The Minority in Parliament has dismissed suggestions that the build, own, operate and transfer (BOOT) agreement between the government and the Africa and Middle East Resources Investment Group (AMERI) LLC is fraught with fraud.
It has, therefore, challenged the government to abrogate the contract or go to court if it feels that the deal is fraudulent.
The Member of Parliament (MP) for Pru East and former Minister of Power, Dr Kwabena Donkor, threw the challenge when he addressed a press conference in Accra yesterday in reaction to an unsigned report by a committee set up by the Ministry of Energy to restructure the AMERI deal.
He cautioned the government that it would incur judgement debt if it dared abrogate the contract because it was an international transaction.
The report, raised some issues with the AMERI deal and claimed that due diligence was not done.
It is said to have been authored by Mr Philip Addison, a legal practitioner; Ms Vickie Bright of the Office of the President and Mr Evron Rothschild Hughes of the Office of the Vice-President.
Denials
Dr Donkor denied the claim in the report that the Volta River Authority (VRA) signed a letter of intent with AMERI Energy on sole sourced basis after a meeting between former President John Dramani Mahama and the Crown Prince of Dubai.
“This is a palpable falsehood and shows the real intention of the lead authors of the report,” he said.
He said the National Democratic Congress (NDC) government went into a contract with AMERI Energy as a developer and indicated that the developer carried all the risks of the project and that whoever the developer brought as a sub-contractor was of no consequence, except where the contract stated that the client must approve the sub-contractor.
Therefore, he said, the committee misled the country by the claim that AMERI Energy was making a commission of $150 million because it had introduced an agreement between AMERI and its EPC contractor into the debate.
Dr Donkor said what was expected of the government was to achieve a good tariff regime for the consumer, noting that in this particular case, the tariff for AMERI at $0.1146 per kilowatt hour was currently the cheapest in Ghana.
Due diligence
He dismissed the suggestion in the report that due diligence was not done, saying that in an emergency situation, the Ministry of Power was happy to leave due diligence to JP Morgan, the international financial giant that confirmed the stand-by letter of credit (SBLC).
He said JP Morgan only agreed to confirm the SBLC after its own due diligence.
Dr Donkor said Parliament also probed the credentials of AMERI and requested for and received the appropriate documentation before approving the power purchase agreement (PPA).
“And it is important to note that the State of Ghana had no exposure to AMERI at this stage because the risk of procuring the turbines was on AMERI and not Ghana,” he said.
He wondered why the committee did not find it necessary to invite either the then Power Minister or his deputy to provide relevant information that would help it in its work.
Takeover agreement
Dr Donkor denied the suggestion in the report that the pay contract structure put the fuel supply risk on the VRA and the government.
He said the AMERI project was not an IPP but a partnership that would result in the takeover of the plant in five years.
Engineers and Planners
He dismissed the suggestion of a breach of contract on the part of Engineers and Planners (E&P) Limited.
He said the sector minister then had to plead with E&P to execute the civil works, which was an obligation on the state under the contract.
Dr Donkor said the government approached E&P, which had not only the equipment and competence but also the critical boulders needed to carry out the works on a day and night basis.
“The contract was thus awarded to E&P by the VRA after the ministry’s intervention, with the approval of the Public Procurement Authority,” he added.
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