The Ameri deal controversy

Even before the government could take a firm decision on the $510 Million AMERI power deal, recent raids by National Security operatives on residences of some former appointees of the National Democratic Congress (NDC) administration who played major roles in securing the deal appears to have indicated the current government’s intentions over the whole episode.

This is so, because the raids on the homes of the former ministers and officials of the NDC government, raises suspicions of the NPP government’s calculated attempts to probably discredit the opposition who have insisted time and again that the deal was and is still the best for Ghana.

Interestingly, the Philip Addison Committee, which was set up to look into the deal has said all the dossiers related to the deal are available, yet security operatives following orders by government have stormed the homes of three former public officials with the excuse of searching for documents related to the deal.

This development has raised more questions about the real purpose of the raids in connection with the deal and critics are suggesting they are simply part of a plot by government to put some fear in the minority and pave way for the abrogation of the contract.

Parliament Condemns Raids

Last week the homes of Dr. Kwabena Donkor, Member of Parliament (MP) for Pru and former Minister of Power and John Jinapor, MP for Yapei-Kusawgu and a former deputy minister of Power as well as Dr. Dominic Ayine, MP for Bolgatanga East and a former deputy Attorney General, were raided by security operatives necessitating the Speaker of Parliament to direct that the MPs whose homes were raided over the AMERI deal should be properly treated and not be harassed.

Another official, Francis Dzata, who is a technical advisor to the ministry of power also had his home raided.

However, both the minority and majority leaders of the Parliament, Haruna Iddrisu and Osei Kyei-Mensah Bonsu, have respectively condemned the raids and called on the speaker to invite the police to Parliament for questioning.

The two leaders pleaded with the Speaker to use his powers to appeal to the police to withdraw the warrant to allow the affected MPs to be present in the House on Monday when the mid-year budget review estimates are expected to the discussed in the House.

On his part, Dr. Donkor said for the authorities to charge him before investigations were done was unfair, alleging it was a political ploy to charge him for causing financial loss to the state.

John Jinapor also added that the manner at which the police stormed his house was traumatic to his family. He said he was then on his way to parliament when the police stormed the home.

Meanwhile, the MP for South Dayi, Rockson Dafiemekpor,has described the manner in which the security operatives stormed the residences of the former government officials as medieval.  He noted it was unfair for the police to waylay one of the accused officials whiles he was about to set off from home to parliament and that “was unfair and totally uncalled for” because all the related documents are already sitting at the Ministry of Energy.

He suggested that the best method was to conduct investigations quietly and raise a prima facie case and serve the accused with a charge consequently.  He argued that the police could request for the said laptop and the pendrive in a more civil manner than the “jungle style” used. 

Background

At the peak of the energy crisis the country was stuck into, the then NDC government through the Ministry of Power entered into an agreement dated February 10, 2015 with Africa & Middle East Resources Investment Group LLC (“Ameri Energy”) to Build, Own, Operate and Transfer (BOOT) a 250MW power plant to reduce the acute power deficit.

In 2014, Ghana experienced a significant deficit in power generation leading to nationwide load shedding. Some of the factors which contributed to the energy deficit in the power system were: exponential growth of demand for power over the last decade, poor hydrology, the non-availability of some generating units through faults, mandatory inspection and routine maintenance and fuel supply challenges. The Volta River Authority (VRA) on behalf of Government of Ghana signed a Letter of Intent (LOI) with Ameri Energy dated 23rd December, 2014 for the establishment of a rental of a 300MW power generation facility to be located at Takoradi.

This was done on a sole-sourced basis after a meeting between the former President of the Republic of Ghana and the Crown Prince of Dubai. In accordance with the terms of the LOI, GOG was required to pay a Fixed Monthly Charge of US$ 785,000 per mobile dual fuel aero-derivative gas turbine on a take or pay basis and a Variable Charge of US$0.005 per kilowatt-hour generated. On 5th January 2015, Ameri Energy forwarded a revised proposal for a five year Build-Operate-Transfer option for 250 MW fast track generation, with a new Fixed Monthly Charge of US$850,000.

The target date for the full deployment of the units was end of first quarter 2015. By a letter dated January 9, 2015 VRA made reference to a proposal jointly submitted by Ameri Energy and APR Energy (with Ameri Energy as the developer and APR Energy as the EPC and O&M Contractor) at the request of GoG. It was agreed also that the power plant would be sited at Takoradi to utilize gas from the Jubilee field which at the time was being re-injected and adversely affecting crude oil production. At the time, the existing thermal plant in Takoradi could not fully utilize the gas, hence the need to procure and install plants that could utilize the gas.

Addison committee

Upon assumption of power of the NPP, the Minister of Energy, Boakye Agyarko inaugurated a 17 member Committee on February 01, 2017 to review, restructure and recommend areas for amendment of the arrangement by the Ministry of Power and submit a final report within two weeks.

The Committee reviewed the BOOT Agreement based on its technical, financial and legal merits/demerits and identified issues that should form the basis for re-negotiation of the BOOT Agreement with Ameri Energy.

Even though the plant is operational, several omissions and concessions were made in the BOOT Agreement which require re-negotiation, amendments and restructuring of the Agreement.

According to the committee report, the Agreement simply is grossly unfair and is not as it presently stands, in the best interest of Ghana.

The Committee has enumerated technical, financial and legal observations and recommendations in the report that are aimed at rectifying the anomalies in the BOOT Agreement for effective and efficient implementation of the project. The recommendations are also to serve as a guide for future negotiations of power projects. Furthermore it came to the notice of the Committee that the whole of the project was executed and financed by PPR a Turkish registered company at a price that was considerably lower than that agreed between the Government of Ghana and Ameri Energy under the BOOT Agreement. Based on these observations, the Committee therefore recommends that Ameri Energy should be invited back to the negotiation table to address and remedy the issues enumerated in this report. Going forward, the Committee also advises that the Government of Ghana should take all necessary measures to avoid power supply deficits which result in the execution of emergency power Agreements.

The BOOT Agreement was signed as an emergency power agreement to help reduce the power supply deficit at the time and the project was expected to be delivered within 90 days after the fulfilment of conditions precedent. The delay in implementing the BOOT Agreement defeated its classification as an emergency project.

Based on these observations, the Committee recommends that Ameri Energy should be invited back to the negotiation table to address and remedy the issues enumerated in this report and for GoG to aim to claw back a substantial portion of the over US$150million commission. In the event that Ameri Energy refuses to come to the negotiation table, GoG should repudiate the Agreement on the grounds of fraud.

Which way to go?

From the foregoing, the question arises as to why should government  be harassing former officials.

Is it a case that the Addison committee as part of its report, suggested for the raiding of the officials homes? Would the deal be restructured or totally abrogated? Meanwhile, the 250 MW plant is operational and supplying power to the national grid. Government’s firm decision on the plant would go a long way to bring finality to the matter.

Source: Mark Boye || Businessweek Africa

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