According to the Ghana Irrigation Development Authority (GIDA), the $12 million paid to the contractor undertaking the Pwalugu Multipurpose Irrigation Dam project was for mobilisation and not the final payment.
In a press statement dated Tuesday, May 28, GIDA said the payment formed part of the terms of the contract that required the contractor, Messrs Power Construction Corporation of China (POWERCHINA), to be paid a total of US$48.5 million as a mobilisation fee once the contractor was able to provide “advance payment guarantee from a reputable bank.”
The authority maintained that the $11.9 million paid so far represents about 25 percent of the total mobilisation fee as per the contract.
GIDA further argued that the government was at no point, at risk by approving the payment and that “contrary to the claim that no work has been done, the contractor has delivered both preconstruction documents and some physical works (camp and access roads).”
Meanwhile, the minority members of Parliament’s Works and Housing Committee have raised concerns about the payment after visiting the project site last week to inspect the progress of work done.
The NDC MPs were left disappointed because, according to the members, the contractor had sold materials meant for the project and abandoned the site.
Edward Bawa, the Member of Parliament for Bongo, addressing the media, called for the prosecution of all persons involved in the approval of the $12 million payment.
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But GIDA insists that “no frivolous payments have been made and the USD11.9 million paid to the contractor was fully covered by a Bank Guarantee valued at USD60.7 million. All payments made were for specific activities executed under contract.”
The authority clarified that the terms of the contract were holistically followed after the contractor provided the advance payment guarantee from Stanbic Bank.
“Under the contract, the Government was expected to pay USD 48,570,889.69 million (which constitutes 12% of the total contract sum of USD 404,757,414.06) as mobilisation to the contractor subject to the provision of an advance payment guarantee from a reputable bank.
“Following the receipt of the advance payment guarantee with face value of USD 60,713,612.11 from the contractor’s bankers (Stanbic Bank), an amount of USD 11,949,088.06 (25% of the total advance mobilisation required ) was paid in three tranches,” the statement emphasised.
Furthermore, Ranking Member of the Mines and Energy Committee of Parliament, John Abdulai Jinapor, has stated emphatically that the next NDC government will ensure that anyone responsible for any wrongdoing in this matter will be held accountable.
Below is GIDA’s full statement:
