Details are emerging about a US$109 million financial loss to the state, occasioned by the former Energy Minister, under the erstwhile Kufuor Administration, Joseph Kofi Adda, and onetime New Patriotic Party (NPP) Member of Parliament for Navrongo Central in the Kassena/Nankana District of the Upper East Region.
A U.S based company, American Tank and Vessel (AT&V), has swindled the Ghana Bulk Oil Storage and Transport (BOST) to the tune of US$109 million.
This bad deal done in 2006, however, when it came to the attention of the then President, John Agyekum Kufuor, he merely fired his Energy Minister, Mr. Adda, without any concrete steps put in place towards retrieving the huge cash or getting the contract executed.
The Ex-Im Bank financing, was meant for the expansion of oil storage capability at the Mami Water Depot from 120,000 metric tons to 230,000 metric tons, and the construction of two 70-kilometer pipelines to transport petroleum product into the interior areas of Ghana.
But those familiar with the transaction told The Herald that, instead of doing an Engineering Procurement Construction (EPC) Contract, the previous government did the deal as a supplier’s credit with BOST, taking a loan to finance the whole transaction supported by a sovereign guarantee.
The American Tanker and Vessel (AT&V) founded and led by William J. Cutts as Chief Executive Officer some 30 years ago, subsequently drew down on the entire line of credit of the US$109 million, without any recourse to BOST, but also supplied the pipelines procured under the contract worth US$70 Million Dollars.
The government of Ghana, through the Ministry of Finance, is currently repaying the loan facility procured from Export-Import Bank of the United States through the Citibank N A, New York, as a result of the sovereign guarantee.
Desperate attempts to renegotiate, have not yielded any success. The government of Ghana (GoG), is exploring the diplomatic option, and has reported to the US Embassy in Accra.
If the diplomatic option fails, the GoG, will then sue American Tank and Vessel (AT&V) in both the US and or Ghana.
The issue came to light on Monday at the Public Accounts Committee (PAC) sitting in Parliament, when a team of officials from BOST and the Ministry of Petroleum, appeared before the committee.
It was revealed that, the American company was paid the amount from a loan facility in 2006, to supply petroleum tanks and build two pipelines between Tema and Akosombo, but it failed to execute the projects.
The acting Managing Director (MD) of BOST, Kingsley Kwame Awuah-Darko, confirmed that BOST, had discussed the matter with the commercial section of the US Embassy, but nothing had been done about the issue.
“As we speak now, the pipelines have not been supplied. They should have finished this by 2008, but has still not supplied the lines. Consideration has passed, but the company has not delivered the projects,” he said.
Mr. Awuah-Darko, said BOST currently owes the Ministry of Finance, because as the guarantor, the Ministry, took up the debt and settled it on its behalf.
It is unclear, whether the 25-Member PAC chaired by the NPP MP for Dormaa Central Constituency, Brong Ahafo, Kweku Agyeman Manu, who was also a colleague Minister of Mr. Adda in the Kufuor administration, will be summoning him as happened in the case of Betty Mould Iddrisu, over her role in the Alfred Agbesi Woyome GH¢51 million judgment debt saga.
The American Tank & Vessel (AT&V) Inc. had reported in June 2007, that the export oil storage tanks and pipelines to the Republic of Ghana, is backed by a $109.5 million loan guarantee from the Export-Import Bank of the U.S.
It mentioned jobs at AT&V that were “expected to be created and sustained by the export sale from Ghana’s Bulk Oil Storage and Transportation Company (BOST). Moreover, the increasing oil storage capacity and improved delivery of petroleum-related products into rural areas, will benefit the U.S. suppliers form Oregon to Alabama”.
The PRNewswire-US Newswire reported that “this transaction reflects two key Ex-Im Bank priorities — expanding support for U.S. small business exports and for U.S. exports to sub-Saharan Africa,” said Ex-Im Bank President and Chairman James H. Lambright. “We look forward to supporting further projects in the growing Ghanaian market.”
“The project brings work to the U.S. in the form of engineering, fabrication and material procurement, as well as sustaining and promoting job growth at AT&V and our suppliers,” said AT&V Vice President W.T. Cutts.
“AT&V’s employees are excited about working with BOST and their Ghanaian counterparts to continue to develop U.S. exports to the sub-Saharan market.” AT&V is a designated small business by the U.S. Small Business Administration.
It explained that, “the Ex-Im Bank loan guarantee covers the $79.4 million export sale, as well as related local project costs in Ghana, capitalized interest during construction, and an exposure fee. The Ex-Im Bank-guaranteed lender on the transaction is Citibank N A, New York, N.Y. The credit will be secured by the full faith and credit of the government of Ghana”.
“The Ex-Im Bank financing, will support the expansion of oil storage capability at the Mami Water Depot from 120,000 metric tons to 230,000 metric tons, and the construction of two 70-kilometer pipelines to transport petroleum into the interior areas of Ghana. Trinity International, Inc., Potomac, Md., arranged the transaction, introducing BOST, a Ghanaian government agency, to AT&V and Ex-Im Bank financing”, it reported.
More to come!