…Contract Price Ballooned From 17million Pounds To 107 Million Pounds But Jon Benjamin Says, Pay!!!
Outgoing British High Commissioner to Ghana, Jon Benjamin, has cast himself in the public eye in Ghana as a person who has no tolerance whatsoever for any form of corruption and would not in any way countenance corrupt practices.
With such a public posturing, one would have expected that Jon Benjamin would have been on the side of the Ghanaian people when it was established that the people of Ghana were being seriously fleeced by the International Hospital Group [IHG] in collusion with the Ghanaian engineer employed by the government to protect the interest of the Ghanaian people.
However, Jon Benjamin wants Ghana to pay the British construction firm International Hospital Group every single pound sterling being claimed by the firm even though investigations conducted by an independent international body has established that the claims being made by IHG were improper.
Below is the full text of a letter Jon Benjamin wrote to then President Mahama demanding on behalf of IHG that Ghana pays the IHG irrespective of “external factors”.
Redevelopment of the police Hospital, Accra
I wrote to your Minister of Finance on 7 May 2015 about the redevelopment of the Police Hospital in Accra by the long established British company, International Hospitals Group (IHG). I attach a copy of my letter to which a response remains outstanding.
IHG has a regional office in Ghana for nearly 20years. IHG, on a turnkey basis, previously designed, built, equipped and commissioned the Sunyani Regional Hospital, which, I understand, is widely regarded as excellent. IHG is committed to the redevelopment of the Police Hospital in Accra to similarly high-quality UK and international standards.
IHG is currently owed £3,174,359 in respect of four overdue Payment Certificates approved by the Ministry of the Interior’s Engineer. I understand that the contract stipulates that payment should be made to IHG under each approved Payment Certificate which has been duly signed by the Engineer within 28 days of such approval.
The Ministry of the Interior wrote to IHG on 22 July 2015 (SCL/TB69/7802H) informing them that the approved payments cannot currently be honoured by the Ministry of Finance due to an internal Government report being undertaken by PWC. However, I understand that there is no provision in the contract which allows for any payments to be withheld on account of the Government of Ghana conducting internal non-contractual reports or audits in respect of approved Payment Certificates.
Again, our legal understanding is that once those certificates have been duly approved and signed by the competent engineer, they fall due for payment, irrespective of other external factors.
That leads therefore to an interpretation that the ongoing late payment of these approved Payment Certificates constitutes a default by the Ministry of the Interior under the contract. As such the contract works have, sadly, been in suspension since May 2015, resulting in ongoing daily increasing project costs and further delays to the project’s completion. I am advised that the works remain in suspension solely due to the overdue amounts referred to above not having been paid to IHG.
I very much hope that I might have the opportunity to discuss this further with you. If I might humbly suggest, it seems to us that two possible steps forward include:
For the Ministry of Finance to pay the overdue approved Payment Certificates currently amounting to £3,174,359 directly to IHG as soon as possible. Such a payment would enable the suspension of the works to be lifted and for IHG to recommence work on the project, thereby preventing further suspension costs;
Following that, there might be a meeting, possibly under Your Excellency’s chairmanship, between the Ministry of the Interior, Ministry of Finance, Attorney-General and IHG, plus any other interested parties, to resolve the long outstanding matter of the revised Contract price and the additional project funding implied by it. I understand that IHG was last asked to attend a meeting with the Government of Ghana on this subject in November 2014, some nine months ago, so another meeting now might help plot a mutually agreeable way forward, particularly as the UK Export Finance Department (UKEF) has recently reconfirmed that it is willing to support the additional project funding, through HSBC, on similar attractive terms to the previous project finance loan in 2013 in order to complete this priority healthcare project.
In the wider context, the British Government, including at ministerial level and through this High Commission, continues actively to promote Ghana as an attractive trading and investment destination and we actively encourage UK companies to pursue commercial opportunities in Ghana, something which I am sure Your Excellency’s presence at the second TGAIS summit in London in early December will give a further boost to. In that context, I hope that the issue around the Police Hospital project can be resolved to everyone’s satisfaction soon, removing an obstacle in the otherwise excellent commercial and economic relationship which happily exists between our countries.
I would be most grateful for any help and guidance Your Excellency can give in ensuring that IHG can be paid the overdue approved Payment Certificates, now totalling £3,174,359, within the next few days, as a precursor to a subsequent mutual agreement on how this vital project can be brought to a rapid conclusion to the satisfaction of all concerned.
With assurances of my highest personal regard, as ever.
British High Commissioner
Ghana has refused to honour claims put forward by IHG after a thorough independent investigation carried out at the request of the government of Ghana by the internationally acclaimed PricewaterhouseCoopers uncovered evidence that point to collusion between the contractor and the government of Ghana’s engineer who was supposed to be looking out for the interest of Ghana.
The evidence uncovered by the PricewaterhouseCoopers investigations include payments and hospitality improperly provided by IHG and related parties to Ghana government’s engineer, which appear to have prejudiced the rights of Ghana under the contract, resulting in changes and delays to the Project that should never have happened.
The government of Ghana engineer who was supposed to be looking out for the interest of Ghana was found by PricewaterhouseCoopers to have improperly received monetary payments and benefited from hospitality provided by the International Hospital Group.
The Police Hospital project contract was awarded to IHG way back in the year 2003 at an initial cost of seventeen million pounds (£17,000.000.00) and was expected to have come to completion in three years (3yrs). However, as at 2015 the work on the project had not moved beyond thirty per cent (30%) even though the company had received payment far in excess of the initial contract price.
Although in the year 2012, the Ghanaian Parliament approved a loan from HSBC to fund the project and also reviewed the contract price. Parliament capped the cost of the project by approving a Parliamentary memo on the project which read, “the last review contract price is to be pegged at £40,125,714.00 and should remain so for the duration of the project”.
This notwithstanding, as at 2015, the HSBC loan was exhausted with the project nowhere near completion yet IHG kept putting in claims for further amounts to be paid, claims which Jon Benjamin supports contrary to the decision by the Parliament of Ghana. Indeed, available records show that as at 2015, IHG had received payments of over fifty million pounds (£50,000.000.00). Almost three times the original contract price and almost ten million pounds (£10,000.000.00) more than what the Ghanaian Parliament approved in the year 2012. In the year 2014, IHG made a case that it had reviewed the contract price once again and that the new contract price has jumped to one hundred and seven million pounds (£107,000.000.00)!!!
The administration of John Mahama refused to budge and rather instituted an investigation into the whole IHG-Police Hospital project saga. However, Jon Benjamin believes that the Government of Ghana cannot refuse to pay IHG the new hugely bloated cost.
Watch out for part four.