…“Nation-Wrecking Clause” Technocrats exposed
Fresh revelations have emerged concerning the stalled 83-kilometre Tamale to Walewale Road project, pointing to serious flaws in the contract’s design and implementation.
Indian construction firm Kalpataru Projects International Limited, formerly known as JMC Projects (India) Limited, was awarded the $158.62 million contract, but dealt Ghana a hefty blow following the formal termination.
The contractor appears to have been unduly favoured by technocrats within the Ministry of Roads and Highways, enabling the company to exit the country with US$30 million in state funds. A questionable termination clause at the heart of the controversy entitled the contractor to cancel the contract if payments for certified works were not made within 14 days.
This clause, now described by critics as “nation-wrecking”, starkly contrasts with the terms offered to other contractors working on similar projects under the same ministry. Despite going unpaid for over a year, many of those firms have continued to work without raising termination threats.
After collecting the US$30 million of the US$158.62 million, which had changed its name from Kalpataru Projects International Limited to JMC Projects (India) Limited, shortly after getting the deal terminated, hiding behind Ghana’s debt restructuring, Ghana’s attempt to retrieve the money, had the company rushing to an Indian Court to block the effort.
The Minister for Roads and Highways, Kwame Governs Agbodza, last week revealed that the Mahama government is seeking to recover nearly US$30 million paid to an Indian contractor for the Tamale–Walewale dual carriageway project despite only 1 per cent of the work being completed. The Attorney-General is said to be looking into the matter.
Speaking in Parliament on Thursday, June 5, 2025, Mr Agbodza, expressed deep concern over the substantial payment made to the contractor on the 83-kilometre road project, which was expected to be completed in 2025 and funded by the Exim Bank of India.
People familiar with the company’s activities said the quantum of money paid to the company is not commensurate with the work on site. The equipment purchased by the company was also left in the bush.
The equipment was described as old and dilapidated; hence, the Indians abandoned it at the site for weeds and reptiles to take over while they pursued Ghana for additional money.
Kalpataru Projects International Limited rushed to terminate the contract after Ghana’s suspension of external debt affected the disbursement of funds from the project’s financier, the EXIM Bank of India.
However, the contractor had received a US$29.65 million mobilisation payment at the time, backed by a Bank Guarantee issued by Stanbic Bank Ghana Limited.
The $158.62 million Design-Build contract for Phase 1 of the road, spanning Savelugu to Walewale (km 30 to km 113), was awarded by the Ministry of Roads and Highways on 17 March 2020.
The Ghana Highway Authority (GHA) was the implementing agency, and IMS Engineering Incorporated and Vision Consult Ghana Limited were the engineers’ assistants.
According to project records, the contract became effective on 23 December 2021, with actual commencement on 21 June 2022 and an expected completion date of 20 December 2025. Under the FIDIC Yellow Book terms, the contractor was entitled to an advance payment, which was a condition precedent to the contract’s effectiveness.
The contractor received a US$29.65 million mobilisation payment, backed by a Bank Guarantee issued by Stanbic Bank Ghana Limited. With these funds, the contractor erected asphalt, wet mix macadam, and crusher plants, site offices, quality control laboratories, and procurement of construction materials and equipment.
Initial physical works, such as site clearance and culvert construction, also commenced, while design work progressed to the draft final stage. However, no payments were made for physical works undertaken.
The project stalled following the Government of Ghana’s announcement on 19 December 2022 of a suspension of external debt service. The EXIM Bank of India subsequently withheld further disbursements until overdue payments by the Ministry of Finance were cleared. The Bank later informed the Government of Ghana of its decision to cancel the undrawn portion of the loan facility, effectively halting the project.
In response to the loss of funding, Kalpataru Projects issued a notice of termination and officially exited the contract by letter dated 27 March 2024.
Efforts to recover the outstanding portion of the advance payment have also hit a legal roadblock. The Ghana Highway Authority initiated the process to call in the Bank Guarantee, but the contractor filed a case in the High Court of Gujarat at Ahmedabad under India’s Arbitration Act No. 40 of 2024 to restrain Ghana from enforcing the guarantee.
The matter has since been referred to the Attorney-General of Ghana, defending the case in Indian courts. However, the litigation is still ongoing.
Sources close to the previous government have criticised the current Minister’s recent public commentary on the issue, suggesting that the full facts have not been disclosed. A senior insider stated that steps to call on the mobilisation guarantee began last year and that the Attorney-General had already been pursuing legal remedies before the contract was publicly discussed by the Roads Minister.
Documents available to The Herald revealed a dispute between the Ghana Highway Authority (GHA) and Kalpataru Projects International Limited (KPIL) over terminating a key road contract. The GHA accused the company of attempting to withdraw from the site and remove equipment without fulfilling post-termination obligations.
In a strongly worded letter dated 2 April 2024, addressed to Brigadier Dinesh Kumar Tyagi, an official of KPIL, Acting Chief Executive of the GHA, Collins B. Donkor, rejected the contractor’s move to terminate the project and demobilise its assets from the site of the Tamale-Walewale Road Phase 1 project, which covers the Savelugu to Walewale stretch.
The GHA expressed its disapproval of KPIL’s interpretation of clauses 16.2, 16.3, and 16.4 of the contract, particularly regarding the removal of equipment from the site.
Mr Donkor argued that the equipment was brought into Ghana under tax exemptions and funded through advance mobilisation payments, which the contractor had not fully amortised. Therefore, he stated, the GHA retains ownership rights over the equipment until all post-termination procedures are completed.
“We kindly request that you refrain from removing the equipment until all the proper documentation has been submitted to the Employer for its approval,” the letter read, warning KPIL not to take unilateral action. The company was also invited to a meeting scheduled for Friday, 5 April 2024, at 3:00 p.m. in the GHA boardroom, which the Authority later cancelled without explanation.
In response, Kalpataru Projects issued a detailed rebuttal, expressing disappointment over the GHA’s failure to acknowledge the contractor’s sustained commitment to the project despite severe financial strain and protracted non-payment.
The company insisted it had been transparent about the lack of project funding and repeatedly sought alternative financing arrangements. It claimed to have deployed significant resources since the contract’s commencement in June 2022. It maintained the road’s usability by constructing culverts and repairing damaged portions, even as certified invoices worth over US$13.5 million remained unpaid.
“During this agonising period, while the Contractor was constantly incurring losses and not receiving its due payments, the Employer neither took steps to address the Contractor’s suffering nor provided any clarity on Project funding,” KPIL’s statement said.
The contractor further accused the GHA of cancelling the 5 April meeting at the last minute, despite the presence of senior management in Accra, and said the Employer had failed to respond meaningfully to the termination notice.
Kalpataru also disputed the GHA’s assertion that it owed US$26.9 million, countering that, on the contrary, the Employer owed the contractor US$44.6 million in unpaid entitlements, including costs incurred post-commencement.
“The Contractor cannot be held liable or unaccountable for the lack of progress. Even from your letter, it is clear that none of the issues are attributable to the Contractor,” the company said, urging a return to discussions to reach an amicable settlement.
As the standoff deepens, it remains unclear how soon work will resume on the strategic northern highway, a key infrastructure link expected to boost trade and connectivity across the Northern Region.
The project, launched in June 2022 by then-Vice President Dr Mahamudu Bawumia, appears to have stalled entirely. Since commencement, barely any site clearing has been done.
According to the Minister, a technical assessment has shown that just 1% of the work has been carried out. Despite this, the contractor has already received US$29,648,180 out of the total project cost of US$158,617,764.
To compound matters, the same contractor is now reportedly demanding an additional US$14 million to terminate the contract, while seeking to retain the initial payment.
“As a Roads Minister, knowing that I owe Ghanaian contractors over GH¢21 billion for work they have genuinely done, it is quite disheartening that at the same time we are unable to pay Ghanaian contractors, we have paid somebody $30 million. And the person is basically asking us to let him go with our $30 million,” Mr. Agbodza stated, highlighting the stark disparity in resource allocation and accountability.
The Minister, strongly affirmed the government’s intention to recover the funds, stating, “We shall use the laws of this country to demand either that US$30 million worth of work is executed or take legal action to retrieve it,” signalling a looming legal battle.
