TUC Raises Red Flag Over Lonrho Agreement

Kofi Asamoah, TUC Boss
The Trades Union Congress (TUC) has expressed concern over some provisions of the commercial agreement between the government and Lonrho, provisions which the union says can lead to the payment of judgement debt in the future.

It has therefore, intensified its campaign for the government to review portions of the Atuabo Free Port Commercial Agreement.

In an interview with the Daily Graphic yesterday, the Secretary General of the TUC, Mr Kofi Asamoah, said the exclusivity provisions in the agreement clearly outlined road maps to tie the government into facilitating financing for the project.

With the exclusivity clause, he said, the developer, Lonrho, would operate the free port with tax exemption for 25 years, with further extension rights for another 25 years.

Consequently, the development of any such facility in future by the government and its affiliated bodies would require the express permission of Lonrho.

Clause 12.4 of the agreement states: ‘The GoG shall extend the necessary co-operation and use its reasonable efforts to facilitate the developer in its efforts to arrange financing for the project and any additional project as necessary, including by entering into direct agreements.’

That clause, according to Mr Asamoah, committed the government to seeking funding for the project and that could be a potential source of judgement debt to the developer should the government renege on it.

Clause 8.6.2 states: ‘If the Developer Effective Date is not achieved by the Longstop Date, or waived in accordance with Clause 8.5, this agreement shall terminate and no party shall have any claim against any other party, except in respect of accrued obligations and liabilities.’

That clause, Mr Asamoah said, provided a framework for the developer to demand payment for debts and liabilities incurred within the period that it was unable to carry out the project.

Freeport status 
‘In our view, it is wrong for the company to be given a free port status and be placed under the Free Zones Board,’ Mr Asamoah opined.

‘Ports are supposed to be planned, built and managed before they could be declared free ports,’ he added.

Security and national sovereignty
Mr Asamoah further emphasised that organised labour still maintained its stance that the project undermined national sovereignty.

‘The nation cannot afford to trade off its security and sovereignty for a controversial project such as the Atuabo Free Port,’ he indicated.

Parliament’s failure
He wondered why Parliament, through one of its select committees, failed to carry out due diligence on the agreement, even after organised labour had pointed out the entrenched positions which put the country at a disadvantage.

The government, he said, had not undertaken a comprehensive study of the negative environmental and social consequences of the project, which might outstrip the financial benefits.

‘Why the haste to ratify the agreement when the financing and government’s financial contributions to the project were ambiguous,’ Mr Asamoah asked.

Credit: Daily Graphic.com.gh

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