CABINET MEMORANDUM
BY
THE MINISTER OF EDUCATION AND SPORTS
SUBJECT: REPORT ON THE PROCUREMENT OF WORKS
(STADIA) FOR CAN 2008
Cabinet is respectfully being informed of the process of procurement for the construction of stadia for CAN 2008.
It is recalled that in May 2003, Cabinet gave a final approval to the then Minister of Education Youth and Sports to bid for the hosting of the 26th African Cup of Nations Tournament, CAN 2008.
Ghana was awarded the right to host the 26th Cup of African Nations (CAN) 2008 on 8th July, 2004. The tournament will involve 16 teams playing 32 matches within the month of January. 2008.
The Confederation of African Football (CAF) has specified that the minimum capacity of the stadia to be used should be 20.000 for the group matches and 40. 000 for the opening match, semi-finals and final-match.
CAF has also specified that the tournament should be held in at least four separate stadia but not more than she should be used.
The Bid Process
Following the award of the right to host CAN 2008, invitation to tenderers to express interest in the procurement of Goods, Works and Services was published on 6th January, 2005 and the procurement process has been followed in accordance with the Public Procurement Act, 2003, Act 663 for the past seven months.
With regard to the construction and rehabilitation of the Stadia, seventy firms who responded were initially evaluated leading to the short-listing of twenty-two firms for the next stage of the process.
As the attached document confirms, between 12th April and 4th July, 2005 twelve shortlisted firms were required to offer proof of funding, detailed drawings and programme of works, among others in the tendering process.
Bids, which were opened on 4th July, 2005 were evaluated by the Tender Committee between 12th and 22nd July, 2005 taking into consideration the 
technical proposals backed by the financial package from international financial institutions.
The Entity Tender Committee submitted the evaluation of the tender to the Central Review Tender Board for review and approval on 25th July, 2005.
Financing The Construction Of Stadia
The urgent need to rehabilitate and construct at least four new stadia by the last quarter of 2007 to enable Ghana host the event in January, 2008 meant that various options of financing the project had to be considered.
The absence of any budgetary provision for the project in the 2005 budget necessitated the request of financial proposals from bidders.
The bidding firms therefore submitted their bidding proposals, technical and financial, as a package, with the backing of international financial institutions.
The funds for the project are therefore being secured, through the bidding firms, from the financial institutions who backed the firms.
The major considerations in assessing the financial proposals are:
• The source of funding;
• Main terms of the funding;
• Credibility of the source;
• Timeliness in accessing the funds;
• Concessionality of the financial proposal.
The sub-committee on Finance, made up of the Deputy Governor of the Bank of Ghana, the Heads of the Aid and Debt Management Unit and Legal Department of the Ministry of Finance and Economic Planning, conducted due diligence and considered the above factors to arrive at the most competent, credible and feasible financial proposals for the funding of the projects.
The Tender Review Board is considering the funding proposals alongside the technical submissions.
Security
The security of every venue for the tournament is paramount and CAF will reject any venue which is associated with violence and hooliganism before and during the tournament.
Given the circumstances of one of the venues, Tamale, which was submitted during the bid stage, it is prudent that another venue is developed alongside the four to meet the CAF minimum requirements even if the Tamale venue is rejected for security reasons.
The development of another venue will also offer the nation the opportunity to develop infrastructure I facilities throughout the country.
Offers After The Bid
On 26th July, 2005 my Deputy 0. B. Amoah and I sought audience with H. E. the President at the Castle, Osu to brief him on the process of procurement for the rehabilitation and construction of the stadia for CAN 2008.
We informed the President of the process which had been followed for the past seven months leading to the submission of the tender to the Central Tender Review Board.
The President expressed his eagerness to ensure the take off of the project in good time and at very competitive cost. Indeed, His Excellency thought the winning quotations (prices) were rather too high.
H.E. referred to his visit to China and the stadium he saw in Shanghai which was modest and said to be cost effective. He felt such facilities will serve the (j purpose of hosting the event in Sekondi and Tamale. He indicated that because of the value for money and modesty he is inclined towards the construction of ch facilities.
The President’s sentiments had earlier been communicated in a letter to me by Dr. Kofi Amoah dated 20th July, 2005.
Dr. Kofi Amoah submitted a proposal from Shanghai Construction Group dated 19th July, 2005 indicating their desire to be chosen to build a 15,000 capacity stadium within 21 months for US$18 million.
On the face of it, the proposal, coming after the bid process had been completed, may be considered. But there are several outstanding issues Theses include:
1. The Shanghai Group did not submit any bid by 7th February, 2005 to be considered by the Evaluation Committee
2. The Group expects the Government of Ghana to provide direct funding which served as basis for rejecting other firms who could not attract •funding even though these firms could be very competitive.
3. The Procurement Act makes it difficult to admit the Shanghai Group, given that several firms who did not meet the financial requirement were not shortlisted. Some of the firms shortlisted have also been declared not wholly responsive because of their financial terms. 
4. The period for design of three months has not been verified, given that the firms who have already designed the stadia took at least six months to complete the AS-built drawings on turnkey basis.
5. If we have to use direct government funding, firms who have been evaluated in terms of stadia design, costs etc for the past seven months to meet the minimum CAF Specifications which include minimum capacity of the stadia of 20,000 and 40,000 for group and final matches respectively, may be considered.
Indeed, other firms have also approached us with “various offers which for constraint of time and the process have not been admitted.
Award of Contract
We are in the last stage of Procurement Process. (The bid is now with the Central Tender Review Board).
In accordance with the Procurement Act, Act 633 if a tender is ascertained as successful by the Central Tender Review Board, a notice of acceptance of tender will be given to the successful tenderer. A written procurement contract is expected to be signed for the contract to come into force.
It is expected that by 15th of August, 2005 the successful tenderers will be endorsed by the Central Tender Review Board and/or approved by Government before a procurement contract will be signed and the site handed over to the successful winner to commence construction.
If on the other hand the recommendations arising out of the tender would be set aside, then we should marshal our forces and make a decision which we can defended nationally and internationally.
We therefore need to make the decision now.
I therefore respectfully submit this report for the information of Cabinet and for an immediate decision bearing in mind that a delegation from CAF will visit Ghana in the third week of August, 2005 to ascertain our state of preparations to host CAN 2008.
August, 2005 to ascertain our state of preparations to host CAN 2008.
HON. YAW OSAFO-MAAFO, M.P. MINISTER
27th July, 2005