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CASH FOR CRONIES: GHANA COULD LOSE US$2bn. DI CALLS FOR RENEGOTIATION OF NDC PORTS CONTRACT

Politics

The Danquah Institute, the leading Accra-based research and policy think tank, has called for a complete renegotiation of a contract between the Ghana Ports and Harbours Authority (GPHA) and Meridian Port Services (MPS) which sought to give full rights for both the construction and operations of the new terminal at the port to MPS.

The Danquah Institute, the leading Accra-based research and policy think tank, has called for a complete renegotiation of a contract between the Ghana Ports and Harbours Authority (GPHA) and Meridian Port Services (MPS) which sought to give full rights for both the construction and operations of the new terminal at the port to MPS.

The Danquah Institute insists that the original plan by GPHA was to put the expansion project through a competitive tendering process.

According to DI, two projects were advertised, one for construction of the terminal and the other for the operations once the terminal was complete.

No bids

The call for renegotiation was made yesterday at a press briefing at the International Press Centre in Accra addressed by the Institute’s newly appointed executive director, Edward Kwaku Asomani.

According to DI, the decision to make the call was taken unanimously by DI’s board and management. Renegotiation will safeguard GPHA’s economic interests and guarantee speedy completion of the project, he said.

The Institute said categorically that over 56 entities expressed an interest, of which 20 were shortlisted, and another 15 bids were received for operation of the new terminal.

DI however revealed that no bids were received from Meridian Port Services (MPS), a consortium formed in 2003 consisting of Meridian Port Holdings (MPH) and GPHA.

However, APMT and Bolloré, the companies which joined to form MPH, registered their interest as separate entities for the terminal operations tender.

Hands tied

DI disclosed that midway through the terminal operation tender, the NDC government under former President John Dramani Mahama issued a presidential fiat halting the whole process.

Mr Asomani mentioned that apart from the fact that the directive grossly breached the public procurement rules, it also severely impeded GPHA’s ability to negotiate freely and competitively in the interest of Ghanaians.

He mentioned that the action ultimately set the stage for a badly negotiated contract that mortgaged the Ghana’s economic interest to MPS and its foreign shareholders for a generation.

The DI boss reiterated that under the Investment Protection Regime of the agreement (Clause 3.3), GPHA is precluded from initiating, developing or authorising the development or operation of any other container terminal within Tema Port and within a radius of 20 nautical miles.

DI is of the view that the clause fetters GPHA’s ability to carry out its mandate as required under Section 5 of PNDCL 160, he said, to “maintain the port facilities, extend and enlarge facilities as the authority sees fit, and regulate the use of a port and of port facilities” inter alia.

He added that Clause 3.3 of is DoA therefore inconsistent with the general duty imposed on GPHA not to contract out of its statutory mandate under PNDCL 160.

Job losses

Second, DI believes that nearly 70 per cent of GPHA’s revenue streams come from its container operations business. It is baffling, to say the least, how any well-meaning negotiator would agree to fundamentally cede the Authority’s main source of revenue.

The Institute says that if the entire deal between GPHA and MPS is not renegotiated, GPHA and Ghanaians will lose 72 per cent of the US$109 million revenue the Authority made in 2017 as the annual revenue anticipated will drop to $30m. Over the life of the contract, GPHA stands to lose in excess of $2 billion, Mr Asomani said.

DI envisages that at least 1,400 Ghanaians permanently employed by GPHA between Tema and Takoradi will lose their jobs by 2020 if the current contract is left to stay.

It also anticipated that the volume of containers handled by GPHA and other licensed container-handling companies will decline by at least 60 per cent.

Additional tariffs

What is even more worrying, the Danquah Institute says, is that under the terms of MPS’s new contract, the company is free to add additional tariffs and may charge for new services, on top of the GPHA-approved tariffs, without consulting the Authority.

DI called for better understanding of Ghana’s strengths, appreciation of our resources as a nation and an open and transparent approach to investment and negotiation practices.

This, the DI director said, will help negotiate balanced, fair and economically beneficial agreements which will improve the lives of all Ghanaians.

It also called for the parties to the MPS agreement to sit and examine the terms of the contract to ensure it is fair and economically beneficial to all.

“In the event that the parties involved are unable to agree new terms within 60 days, the Danquah Institute will take legal action in the public interest,” Mr Asomani said.

“Nobody should underestimate our resolve to see this contract renegotiated.”