- denies participating in US$71.6 million Ameri relocation deal
The Attorney General and Minister of Justice, has emphatically denied his participation in the relocation of the controversial US$71.6 million 250 megawatts (MW) AMERI power plant from the Aboadze power enclave in the Western Region to Anwomaso-Kumasi in the Ashanti Region.
Godfred Yeboah Dame, denied being consulted for his opinion on the Engineering Procurement Construction (EPC) Contract, contrary to earlier claims by the Deputy Minister for Energy, William Owuraku Aidoo, to Parliament that the AG’s opinion was secured.
This is a sequel to a series of revelations that contradict the position of the Minister of Energy, Dr Mathew Opoku Prempeh alias “NAPO”.
He has made claims even to Parliament which turned out to be untrue, however, both sides of the House, especially the Minority National Democratic Congress (NDC) whose friendship and support he overwhelmingly enjoys, is yet to probe his claims.
The NDC, has four personalities who in the eight years of the Atta Mills and Mahama administrations, played significant roles at the Energy Ministry as Ministers, Deputy Ministers and spokespersons, and are currently in Parliament.
They are, Dr Kwabena Donkor, the Member of Parliament (MP) for Pru East, Emmanuel Armah Kofi Buah, MP for Ellembelle, John Abdulai Jinapor, MP for Yapei Kusawgu and Edward Abambire Bawa, MP of Bongo Constituency in the Upper East Region.
But in June this year, the Deputy Minister for Energy, William Owuraku Aidoo, represented his Minister, in Parliament to answer questions on the relocation of the power plant which has been pegged at a total of US$71.6 million.
In a direct response to when the contracting process will be concluded, the Deputy Minister stated that the Energy Ministry, had agreed with Mytilineos SA to relocate the Plant to Anwomaso in Kumasi six months after the signing of the EPC contract.
He indicated clearly that, the Ministry had sought PPA’s approval to sole-source this particular contract to pre-financed Mytilineos SA and the legal opinion of the Attorney General has been obtained and being incorporated in the draft contract.
William Owuraku Aidoo, indicated that the Ministry is expected to seek Parliamentary approval for the relocation of the Plant.
He stated that, the contract has indicated the EPC contract will take approximately six months after the agreement, adding the Ministry of Energy and the Attorney General are fine tuning the contract for submission to Parliament for the relocation to happen.
But while The Herald could confirm that, indeed, PPA approval has been secured to execute the contract under sole-sourcing, the AG, has denied any contact with the Energy Ministry on the AMERI power plant, leaving many significantly puzzled about the deal.
A letter dated August 1, 2022 addressed to the African Centre for Energy Policy (ACEP) in response to one dated 7th July stated “We are unable to provide the information requested on account of the fact that the advice of the Attorney-General was not requested for the Sole sourcing of the EPC contract on the relocation on the relocation of the Ameri Power Plant to Kumasi and accordingly the Attorney General did not issue an opinion on the procurement.
Mr Dame’s letter added “we advise that you request for the information from the Ministry of Energy.
ACEP in its letter to the AG had demanded “a copy of the Ministry of Energy’s request for the Attorney General’s legal opinion to sole source the EPC Contract on the relocation of the Ameri Power Plant to Kumasi.
The energy policy think tank had also demanded for “a copy of the Attorney-General’s legal opinion given to the Ministry of Energy for the sole sourcing of the EPC of contract on the relocation of the Ameri Power Plant to Kumasi and all correspondence with the Ministry of Energy on the same”.
The negative response from the AG means that the Minister of Energy, represented by his deputy, told an untruth to parliament.
Parliamentary questions are not impromptu demands. The questions are sent to the ministry responsible in advance. Therefore at the time the answer was delivered, the Minister must have known exactly what he wanted to tell parliament.
Interestingly, the AG’s denial is only one of the evolving revelations and changing narratives by the Minister of Energy.
On July 1, 2022, the Minister (NAPO) appeared before parliament to deny part of what his deputy had told parliament. He denied that the ministry was involved in the EPC negotiations though Owuraku Aidoo had told parliament two weeks prior that the ministry did the negotiations.
However, a leaked letter signed by the Minister confirms that the Ministry of Energy had finalized the negotiation and gotten approval from PPA for about $71.6 million for relocation costs and Operations and maintenance (O&M) for three years.
Again, the Energy Minister, deliberately deceived Parliament of his involvement, although he was fully aware of the ministry’s receipt of the EPC proposal from Mytilineos and negotiated the transaction with his active participation.
A source at the Ministry and close to the transaction laments the Minister’s behaviour; “it is unbelievable that the Minister is behaving like that with such a public project which has traces everywhere. Everyone knows the Minister did the negotiations with his team.
He only wrote to VRA for LC because he knew the Finance Ministry wouldn’t give him guarantees.
The National Executive Council (NEC) of the Volta River Authority (VRA) Senior Staff Association (SSA), had expressed “grave concerns” over the government’s EPC Contract to the Greek company, Mytilineos SA.
Aside from the outrageous cost which they insist is not in the interest of the country, the VRA senior workers were unhappy about the request from their sector minister, Matthew Opoku-Prempeh, for the Authority to support the relocation with the establishment of payment security.
In a protest letter on February 1, 2022, sent to the Energy Minister, the VRA workers, noted “while we applaud the Government for the takeover of the plant and the relocation of same, we however have grave concerns over the EPC contract cost, handing over the Operations & Maintenance (O&M) to Mytilineos SA and the request for VRA to support with the establishment of payment security.
The protest letter signed by Cephas Duse, the National Chairman of VRA Senior Staff Association in the custody of The Herald, revealed how “per a letter dated December 17, 2021 from the Ministry of Energy, the Energy Ministry and Mytilineos SA have reached an agreement for the latter to undertake the EPC works associated with the relocation of the AMERI Plant to Anwomaso at a total cost of US$35,679,025.00.
According to them, after careful scrutiny of the information available to them, they have noted the huge disparity between EPC contract cost offered by Mytilineos SA and the actual EPC contract sum.
The total cost of the project at its current form, will see the state coughing up a whopping US$71.6 million.
“Per the agreement, Mytilineos SA is to also undertake the Operations & Maintenance (O&M) activities at a cost of US$1,000,000.00 per month for 36 months. The letter from the Ministry of Energy further indicates that, the contractor has requested the Government of Ghana (GOG) to provide an irrevocable Standby Letter of Credit (SBLC) to the tune of US$30,000,000.00 for both the EPC and O&M costs.
“Owing to the budgetary constraints of the Ministry of Finance according to the Minister of Energy by a letter dated December 17, 2021 and addressed to the Chief Executive of VRA, requested VRA to consider providing the SBLC on behalf of GOG to facilitate the conclusion of the contract negotiations with Mytilineos SA.
“The EPC contract value of US$35,679,025.00 agreed on between the Ministry of Energy and Mytilineos SA beats our imagination because per a letter dated March 22, 2021 and addressed to the Honourable Energy Minister, Mytilineos had offered to undertake the EPC works at a total cost of US$25,480,000.00.
“Per the Mytilineos SA offer letter, the US$25,480,000.00 EPC cost would cover the dismantling, relocation, installation and commissioning of existing ten (10) TM Units and related 161KV Substation and BOP equipment form Takoradi Power Plant to Kumasi Plant”.
But “as concerned citizens of Ghana and workers of VRA, we think that the decision to entrust the O&M activities to Mytilineos SA instead of VRA is not in the best interest of VRA and the Nation at large in view of the fact that “VRA has the requisite capacity and technical-know-how (knowledge, skill mix, experience, etc.) in hydro, thermal (heavy duty and aero derivative) and solar power generation and can effectively and efficiently undertake the O&M activities of the plant without any challenges. It is only expedient that VRA is allowed to undertake the O&M activities”.
Additionally, “VRA undertaking the O&M activities would lead to lower cost of power (lower tariff) to consumers since VRA’s cost of generation is generally lower than that of the IPPs”.
More so, “VRA undertaking the O&M activities will lead to creation of employment opportunities for Ghanaians instead of the opportunity being given to foreigners (Mytilineos SA)
Furthermore, “if VRA undertakes the O&M activities, any value from it would be for the benefit of Ghanaians and not foreigners (Mytilineos SA). Mytilineos SA is likely to repatriate the money received to their home country and this would have a negative impact on the Ghana’s exchange rate performance.
Added to that “VRA undertaking the O&M activities would lead to the Authority recovering some of the losses (US$11.28 million per month) incurred under the five-year Ameri deal.
They insisted that “VRA undertaking the O&M activities would result in GOG/VRA not paying penalties for O&M delayed payment, reduction in SBLC and any associated fees and charges as well as the avoidance of the exchange losses associated with the O&M payments.
On VRA’s cash flow challenges, “the request for VRA to provide the SBLC on behalf of GOG is likely to have negative consequences on the Authority’s cash flow. At various Management and Staff Groups meetings including the just ended 2021-2022 negotiations, Management complained of Cash flow problems. They indicated that even though the Authority made some profit in 2020, the company is currently confronted with serious cash flow challenges as a result of the implementation of the ‘cash waterfall’ mechanism, huge outstanding receivables etc. Any attempt to compel VRA to take on the responsibility of providing the payment security for the Mytilineos SA contract would only exacerbate the Authority’s cash flow challenges.
