Gov’t Slapped With $87m Judgement Debt

Marietta Brew Appiah Oppong, Minister of Justice and  Attorney General

In less than a period of two weeks, the John Dramani Mahama-led National Democratic Congress (NDC) administration has been slapped with $87 million (approximately GH¢234 million) judgment debts.

The judgments were secured on two separate contracts that the administration ‘arbitrarily’ cancelled in 2009.

The first one was a $12 million slapped on the government by the International Court of Arbitration in The Hague, Netherlands, over a Balkan Energy Company (BEC) contract abrogated by the government, while the second one was a hefty $75 million judgment debt awarded to Bankswitch Ghana Limited by the same court of arbitration.

Both contracts have been under litigation all these years until the recent verdict by the International Court of Arbitration, after the current Attorney-General and Minister of Justice, Marietta Brew Appiah-Oppong, had failed to present a convincing defence for the cancellation of both contracts.

The Balkan Energy contract, signed in 2007 during the erstwhile John Agyekum Kufuor administration of the New Patriotic Party (NPP), was a 20-year deal for the company to equip, refurbish and commission the deteriorating floating power plant named the Osagyefo Barge, at a cost of $40 million.

The barge was supposed to add an additional 125 megawatts of power to the national grid, but was cancelled after the new NDC government failed to reach an agreement with Balkan when suggestions were made to get the Government of Ghana to audit its power lines before the power plant was connected.

The government’s contention was that the lines were already set to receive the power from the barge and so there was no need to audit the system before firing the plant. This standoff caused the company to send the case to The Hague for arbitration.

The Minister of Energy and Petroleum, Emmanuel Armah Kofi-Buah, in December 2013, was optimistic that the government would get a positive outcome from the litigation in The Hague, but had been shocked with the turn of events as the government  has been ordered to cough up $12 million to Balkan Energy.

Meanwhile, the Bankswitch judgment, which came on the heels of the Balkan Energy one, also involved a 2007 contract signed with the previous NPP administration, where Bankswitch – an ICT company – was supposed to check corruption within the Customs, Exercise and Preventive Services (CEPS) on valuation of goods.

According to the Attorney General, the NDC government cancelled the contract because it was signed at a time that the State already had a contract with GCNet and a number of Destination Inspection Companies (DICs) performing the same functions for which Bankswitch was being contracted.

Besides, she explained that as at 2009, Bankswitch had not started work, causing the abrogation of the contract.

Akoto-Osei Speaks
However, former Deputy Finance Minister, Anthony Akoto-Osei, denied that the ICT firm had not commenced work by 2009. He stated on Accra-based Joy FM that there were minutes of meetings held on work done and returns brought to government by the company.

Mr. Akoto-Osei explained that Bankswitch Ghana Limited indeed started working since 2007 and was supposed to work up to about five years before Customs fully takes over the programme.

He indicated that at the time he was the Deputy Finance minister, he endorsed the contract with the ICT firm, but when power changed hands from the NPP to the NDC, and when the NDC decided to terminate the contract, none of the new government officials contacted him for clarification before embarking on the contract abrogation, leading to the huge debt.

Ayariga admits fault
Shortly after the verdict by the International Court of Arbitration, Minister of Information and Media Relations Mahama Ayariga admitted that the NDC government did not go through the proper procedure in their quest to terminate the two contracts.

‘If there is any real fault, perhaps it comes from deciding to not accept particular arrangement and not taking the right processes to terminate what clearly would have been an agreement with the government of Ghana, even if it was a pilot programme,’ he pointed out.

He underscored, ‘At the time, we insisted and continued with the contract; we ought to have gone through the processes for terminating this particular agreement so in that aspect, I think of course, some failure on our part took place.’

 By Raphael Ofori-Adeniran

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