NPP’S US$109 Million “Sole-Source” Contract Uncovered

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Finance Ministry Servicing Loan For No Work Done

The Herald’s sources at Ghana’s embassy in the United States of America (USA), have hinted the paper about the activities of the US-based American Tank and Vessel (AT&V) company, which the Kufuor government through the Bulk Oil Storage and Transportation (BOST) had gone into a US$109 million contract on the basis of “sole-sourcing”.

This paper is informed that AT&V officials, have been storming Ghana’s embassy in Washington DC, begging Ghanaian diplomats to assist the company reach an amicable settlement in the matter, which is likely to end up with some state officials both in Ghana and the US in jail.

Ghana through the Ministry of the Finance & Economic Planning, is currently repaying the US$109 million loan to the US Ex-Im Bank, although work by AT&V, has been put at only US$35 million.

Embassy officials, have mentioned one Skido Achulo, a Deputy Ambassador at the mission as the officer the hitherto belligerent American company is speaking with towards solving their differences over the 2006 contract in which Joseph Kofi Adda and Joseph O.K Addo-Yobo, have been mentioned.

Investigations have been going on in both countries about the US$109 million contract since 2009, however, no amicable settlement has been reached, since AT&V refused to be amenable to any suggestion by the new management of BOST.

The matter has also been reported to the US Embassy here in Accra, with letters cited by The Herald bearing the name of Donald G. Teitebaum, the immediate past US Ambassador to Ghana, David Salpeter of the Citigroup Export and Agency Finance, Katherine Janik, Portfolio Manager, Ex-Im Bank and Richard Park, Managing Director of the Ex-Im Bank.

But The Herald is informed that, Skido Achulo, a Deputy Ambassador, has in these few days been making frantic efforts on behalf of AT&V to BOST led by Kingsley Awuah Darko to get back to the negotiation table.
The Herald, had on Monday reported that 13-years after the jailing of Kwame Peprah, Ibrahim Adams and others in the Quality Grain Scandal, the tables have turned, with a similar scandal brewing with a possible criminal prosecution of some officials who were in-charge of BOST under the John Kufuor regime.

Documents cited by The Herald put a former Minister of Energy in the erstwhile Kufuor administration, Joseph Kofi Adda and Joseph O.K Addo-Yobo, ex-Managing Director of BOST, as having some questions to answer in the US$109 million contract signed with the AT&V company on the basis “sole-sourcing”.

Aside the Supply Agreement documents, sources close to ex-President John Agyekum Kufuor, have revealed that his cabinet did not approval of the multimillion transactions as it was not aware that Mr. Adda and Mr. Addo-Yobo, had gone into the deal.

Additional claims from ex-President’s outfit was that, Joe Ghartey, Member of Parliament for Essikadu-Ketan Constituency in the Western Region, who was the Attorney-General and Minister of Justice at the time, was not informed by his colleague Energy Minister, Mr. Adda. Indeed, it is also doubtful if Parliament approved the US$109 million deal.

Unconfirmed report available to The Herald is that, some US$3.5 million was used by the Ghanaian officials to procure the services of a private law firm in the US to work on the legal technicalities involved in the deal. However, legal brains who have thoroughly reviewed the contract, have described it as a “Disadvantageous Arrangement”.

It also came to light that, although US$109 million was withdrawn from the bank, work done amounted only to US$35 million. These include, two fuel storage tanks built in Akosombo and one built Mami Water in the Volta Region. This means that some American bank officials, also have questions to answer for releasing monies in their custody without proper the documents confirming the quantum of work done. This violated the terms of payment agreed by the two parties.

The documents also disclosed how some state officials slept on their duties and responsibilities thus allowing the AT&V to have an unrestricted access the loan and depleted the loan procured from Export-Import Bank of the United States though the Citibank N A, New York, with Ghana’s sovereign guarantee.

Approvals for payments were not counter signed by BOST officials yet cash was withdrawn in various tranches sometimes. using Letters of Credit (LC) for no work done. This was done in blatant violation of the July 31, 2006 agreement signed by officials of AT&V led by William J. Cutts and BOST led by Mr. Addo-Yobo.

Most of the documents showed how AT&V was made powerful under the Addo-Yobo management at BOST sometimes including deciding who acts as agents of the state institution, and the extent to which those agents were allowed close to the facility and sites of BOST.

For instance, a company called Velosi which is into “..asset integrity consultancy, vendor surveillance, third-party inspection, testing, certification, and recruitment services for the oil and gas, mining, and energy industries” engaged by BOST to ensure quality and timely service delivery, was locked out of the premises of the AT&V while Mr. Addo-Yobo looked on helpless.

Furthermore, the documents showed that no due diligence was done on the America company, before the award of the colossal contract. Some of the documents established that parts of the contract, had been executed long before attempts were made to acquire geological survey, as well as an approval from the National Petroleum Authority (NPA).

Other documents also cited by The Herald revealed frantic efforts by the BOST MD, Dr. Yaw Akoto, who is currently the Chief Executive Officer of Surfline Communications Limited to stop some payments to AT&V by writing to the Export-Import Bank of the US, the American Embassy in Accra, getting a legal representation to sue AT&V, but to no avail.

Terms of payment

The agreement, had said that “Payment terms acceptable to AT&V shall be in accordance with Exim Bank’s terms and conditions which shall be an integral part of this contract. The coming into effect of this agreement is dependent on the existence of a valid Loan-Agreement between Buyer and the Exim Bank of the United States of America”.

It insisted that the “Seller shall be allowed a draw-down of thirty (30%) as progress payment. The draw-down shall be within twenty one (21) days of signing of the Loan Agreement between Exim Bank and Buyer/Guarantor”.

“The reminder of seventy percent (70) shall be paid to the Seller pro-rata to each shipment (equipment shipped from a U.S port) or seller port of origin or issuance of “work completion certificate” (work being done in Ghana) by Seller in accordance with the terms of the LC.

“Every month, after the 30% draw-down, a “work completion certificate” shall be issued with authorized signatures from both parties authorizing draw-down by Seller as described in 3.2. There would be retention of 5% of CIF value until the final issuance of the “completion of work certificate” which signifies the completion of project”.

It mentioned that “in the case of shipments, payments are based upon the presentation of the following pre-shipping documents:

AT&V Quantity and quality Certificate;

Three (3) original of Bill of Lading “Clean on Board” showing Ocean Freight and Insurance pre-paid to Tema, Ghana; and Three (3) copies of the Commercial Invoice. A copy of each of these documents must be submitted to the Buyer within fourteen (14) days for customs formalities after each shipment or before each shipment.

ARTICLE 4-ACCEPTANCE CERTIFICATE:

The Buyer shall, in the presence of the Seller or its authorized representative (s), accept each shipment at the Seller’s premises or port of shipment within seven (7) Calendar days of the arrival of the supplies at the aforementioned premises or port.

ARTICLE 5-DELIVERY SCHEDULE:
Each shipment will be made CIF, Tema-Ghana. Delivery and construction shall take place within 60 months of receipt of letter of credit (L/C) or initial cash payment plus any time identified with changes in scope, delays, force majeure or other impacts.

But most of these were not done yet the funds were released to AT&V.

In April 2003, an Accra Fast Track High Court presided over by Justice Dixon Kwame Afreh, sentenced three former top public officials to various terms of imprisonment for their involvement in the Quality Grain Company case.

Kwame Peprah, former Minister of Finance was sentenced to four years’ imprisonment, while Ibrahim Adam, former Minister of Food and Agriculture and George Sipa Yankey, a former Director of Legal Sector, Private and Financial Institutions of the Ministry of Finance, were sentenced to two years’ imprisonment each.

The Kufuor government, had charged with conspiracy and causing financial loss of US$20 million dollars to the State in a rice project at Aveyime in the Volta Region.

The Quality Grain scandal, revolved around a US woman, Juliet Cotton, to whom the money was paid to produce rice at Aveyime. A US Court also convicted Cotton for her involvement in the project.

The Trial Judge acquitted and discharged, Nana Ato Dadzie, Former Chief of Staff and Mr. Samuel Dapaah, Former Chief Director of the Ministry of Food and Agriculture.

More to come!

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