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ATTORNEY GENERAL SHREDS $140m NDC “CHOP CHOP” FROM $200m SAGLEMI DEAL

Politics

In the absence of “a valid explanation” for variations in the terms of the original agreement for construction of the Saglemi housing project, the Attorney General and Minister of Justice, Gloria Akuffo, has advised the Minister of Works and Housing, Samuel Atta Akyea, to refer the matter to the “appropriate authority for criminal investigations”.

In the absence of “a valid explanation” for variations in the terms of the original agreement for construction of the Saglemi housing project, the Attorney General and Minister of Justice, Gloria Akuffo, has advised the Minister of Works and Housing, Samuel Atta Akyea, to refer the matter to the “appropriate authority for criminal investigations”.

The AG’s advice is contained in a letter addressed to the Works and Housing Minister in response to a request for advice on the way forward on the now controversial Saglemi deal.

On November 16 2018 the Ministry of Works and Housing wrote to the AG requesting an opinion on the termination of an engineering, procurement and construction (EPC) contract between the Government of Ghana and Construtora OAS Ghana Ltd for realisation of the Saglemi housing project, initiated under the John Mahama-led NDC government.

The US$200 million deal was for 5,000 homes at an average cost of $40,000 per unit but this was later varied, without recourse to Parliament, to 1,502 homes for the same cost. Building 1,502 homes should have cost $60.08 million.

Termination

According to the AG, given that the agreement expired in June 2017, “There can be no termination of a non-existent contract as requested by the contractor.”

With the expiration of the agreement, she says, the purported notice of termination by the contractor “has no basis in law and is therefore of no effect”.

She has therefore advised the Works and Housing Ministry to “write officially to the contractor rejecting the purported notice of termination”.

“Since the parties to the contract are bound by the agreed accrued rights and obligations, notwithstanding its expiration, the Ministry is advised to demand specific performance of the obligations of the contractor as contained in the expired agreement.

“Alternatively, demand may be made by the Ministry on the contractor for a refund of all overpayments as well as interest subject to the conduct of a value-for-money audit,” the letter advises.

Damning evidence

Ms Akuffo writes that, having reviewed all the documents available, she finds it clear that both the executive and parliamentary approvals for the project were for construction of 5,000 housing units at a cost of $200m.

“From documents reviewed, there is no evidence justifying the variation of the scope of the Agreement in the First and Restated Agreement signed by the then Minister, Hon Collins Dauda, which reduced the number of housing units to be constructed from 5,000 to 1,502 even though the price remained US$200,000,000,” the letter says.

The letter adds, “Since the First and Restated Agreement witnessed substantial reduction in the scope of the agreement from 5,000 housing units to 1,502 housing units, the Minister ought to have resubmitted the Agreement to Parliament for approval.”

Null and void

The letter declares that the ministry’s failure to resubmit the agreement to Parliament for approval “therefore renders the First and Restated Agreement null and void”.

According to the AG, the chief director of the Ministry of Works and Housing, Alhaji Ziblim Yakubu, who signed the restated agreement with Construtora OAS Ltd, had no capacity to do so.

“There is no evidence that the Chief Director, Alhaji Ziblim Yakubu, was clothed with the capacity” to review the deal, the AG says.

She argues further that in the absence of any evidence to the effect that the chief director was authorised by the Minister to review and sign the agreement, whatever he did “on this ground is also null and void and of no legal effect”.