Ridge Hospital Project Overpriced By $142m -Crown Agents Ltd Says Price Doesn’t Offer Value For Money For GhanaiAn Taxpayers
The UK international company Crown Agents Ltd has revealed that the commercial agreement between the Government of Ghana and Messrs Bouygues Bartiment International for the design, construction, procurement and installation of equipment for the rehabilitation of the Ridge Hospital in Accra has been overpriced by a whopping $142 million.
Crown Agents Ltd is an international development company that partners with governments, aid organisations and companies in over 100 countries. Through consultancy, supply chain management and financial services, it helps countries grow their economies, strengthen their health systems and improve financial management.
A document authored by Crown Agents, a copy of which is in the possession of the New Statesman, states clearly that “the proposed price [for the Ridge Hospital rehabilitation project] cannot offer value for money to the taxpayers of Ghana.”
The rehabilitation of Ridge Hospital is being financed with a Government of Ghana mixed credit facility of 250 million US dollars from Exim Bank and the HSBC Bank, with the rehabilitation works expected to provide the hospital with ultra-modern facilities and a 420-bed capacity, to improve quality and expand access to health care delivery, particularly to its immediate catchment area.
However, Crown Agents, a company contracted by donor agencies to conduct due diligence on donor-funded projects, has stated that “based on the assessment of an estimated Fair Market Price for the Ridge Hospital of US$3,000 per square metre, and further correlation with other recent VFM assessments of contracts for large hospital construction projects, the total Contract Price for Phases 1 and 2 is considered likely to expose the Ministry of Health (MOH) to an unacceptable level of risk.”
Then came the bombshell: “It is recommended that the total contract price for the Ridge Hospital should be reduced by US$142 million to a total contract price for the whole of the works of US$162 million,” the document added.
Questions have also been raised about the disparities in the contract sum. While Parliament approved the cost of rehabilitation at $250 million, Government has quoted $304 million as the cost of the project, a whopping difference of $54 million.
Crown Agents also revealed that the final price review was “based on the final pricing reviews for various aspects and in comparison with the recently completed VFM Audit on the 600-bed University of Ghana Teaching (Legon) Hospital.”
The New Statesman is reliably informed that the refusal of donor agencies in releasing funds to support the ailing economy is because of situations akin to the overpricing of projects under the government of the National Democratic Congress.