The offer made to the five Destination Inspection Companies (DICs) by Ekwow Spio-Garbrah, Minister of Trade and Industry, asking them to pay $175 million in exchange for contracts, is after all no longer available.
Information gathered by DAILY GUIDE indicates that the contract is being awarded to West Blue, a company allegedly owned by a beautiful Ghanaian woman with strong connections in Nigeria under the previous PDP government, but hitherto unknown in Ghana.
She is in the person of Valentina Mintah, the daughter of the late Squadron Leader Clend Sowu, former MP for Anlo, who was a giant in the NDC.
She is known to have close contacts with the First Family.
West Blue is close to grabbing the multi-million dollar contract that can make Valentina richer by $30-$60 million every year, with presidential support to make it happen.
According to DAILY GUIDE sources, President John Mahama has already authorised the award of the contract to West Blue by an executive fiat with no tender, asking the five DICs to go home by the end of August.
The total value of the contracts that the five Destination Inspection Companies (DICs) have with the Government of Ghana is worth some $60 million annually or up to one percent of the value of inspected and classified imported goods at the nation’s ports.
This is justified by the fact that between 2010 and 2014 alone, the combined work of the DICs ended up recovering for government some $2.8 billion in under-declared duties for imported goods.
Termination
On 31st August, 2015, the five-year contracts of the five companies (Gateway Services Ltd, Ghana Link, BIVAC, Webb Fontaine, and Inspection & Control Services) will come to an end, with hundreds of Ghanaians standing the risk of losing their jobs.
Instead, the President, through a letter written by his Chief of Staff Julius Debrah, dated May 12, 2015, directed the Ministry of Finance (not the Ministry of Trade & Industry) to transfer the duties done by all five DICs to an IT consulting firm with international claims of specialising in Trade Facilitation, West Blue Ghana Ltd.
The management of trade at the ports requires the highest level of technical support and capacity building and such a major transfer of responsibilities, ordinarily, calls for a well-thought-out transitional programme.
Thus, the last minute decision not to renew the contracts of the current operators and to rather hand over all their responsibilities to a new player in the industry in Ghana is being seen as ill-conceived and the transition itself premature.
Moreover, there is the fear that West Blue’s operations in Nigeria had hit a snag when ports were congested because of alleged system failure.
GCNet
West Blue is expected to take over completely from September 1, and is already facing problems from GCNet, which has an existing contract with the Ghana Revenue Authority.
GCNet has alerted the government of a possible breach of its service contract if it goes ahead to sign a new Single Window (SW) agreement with West Blue Ghana Limited.
‘As you are aware, under the provisions of the Service Agreement executed between the government and GCNet, the government, as part of its obligations, granted ‘GCNet exclusive rights to provide the services’. Among these services was the development and deployment of a TradeNet,’ the company said in a statement.
There are also concerns from the Customs Division over the details of the contract which they believe rather transfers the work of classification and valuation to West Blue instead of it playing a supporting role to Customs Division for the latter to take complete control.
The letter to the Finance Minister, with ref no. SCR1A.14124, directing the takeover by West Blue reads in part: ‘In pursuance to H.E. the President’s decision, you are directed to formally engage West Blue Ghana Limited to undertake the following services:
Software implementation and support activities to GRA and related agencies for takeover of the functions of the DICs on 1st September, 2015;
Conduct needs/GAP Analysis for the implementation of the National Single Window; and
Implement the National Single Window Blue Print following the needs/GAP Analysis.’
After awarding the contract without tender to the IT firm, the letter from the Presidency orders Finance Minister Seth Terpker thus: ‘You should take the necessary steps to secure the Public Procurement’s approval in order to engage West Blue on Single Source Basis. Your action would be much appreciated.’
In the last 10 years, the value of imported goods attracting duties has been more than $70 billion. In 2013 alone, the value of dutiable goods was $10.625 billion. This attracted duties and taxes to the tune of $2.831 billion, with 1% of the free on board value shared among the DICs.
Mr Spio-Garbrah’s letter stated that the DIC which advances government $35 million to pay off Bankswitch ‘would be awarded a contract of 0.35% of Free on Board values on all Ghana’s imports for at least a period of five years to enable that company recover its investments.’
But that offer is no longer available, going by the letter written by the President’s chief of staff.
Going by the 2014 value of imported dutiable goods of $6,440,068,881.84, this could translate into $18 milliona year for the successful DIC.
For West Blue, industry players hint that it stands to smile all the way to the bank with anything between $30-$60 million for virtually a job and income that were shared among five major players.
West Blue is not expected to invest heavily in equipment and personnel, leading to suspicions being raised over the expected exorbitant nature of the profits the company and its backers could reap.
So far, government has refused to make public details of the controversial contract with West Blue, particularly the very touchy issue of the percentage of duties and taxes collected at the ports.
But already, industry players, including some senior staff members at the Customs Division of the GRA, are speculating about the ‘generosity’ of the package, expressing concerns that a major chunk of what all the five DICs combined were receiving could now go to Ms Valentina Mintah’s company.
The agreement is to provide software application, hardware and operations support services to Customs Division.
West Blue was awarded a similar contract in 2013 with the Nigerian Customs Service; but it encountered major difficulties with implementation, which resulted in the recall of one major DIC, Webb Fontaine, to come to the rescue and undertake much of the classification and valuation duties.
The processing system introduced by West Blue got choked, which led to a backlog of cargo clearance documents.
This resulted in massive delays, averaging one month, for the production of Pre Arrival Assessment Report (PAAR), equivalent to Ghana’s Final Classification and Valuation Report (FCVR), which importers need to clear their goods from the ports.
Concerns are being raised over the speed with which the Presidency ended the 15-year participation of DICs in the classification, valuation and clearance of goods from our ports.
It was not until June 15, 2015 that government, through a letter from the Minister of Trade & Industry, Ekwow Spio-Garbrah, wrote to the five DICs to inform them about the termination of the awards.
‘It is my duty to inform you that the current contract which ends on 31st August, 2015 will not be renewed by the Government of Ghana when it expires,’ his letter read.
Indeed, documents sighted by DAILY GUIDE suggest that it was not until 9th April, 2015 that the Presidency formally initiated the process with a letter on the subject matter titled, ‘Maiden Meeting of the National Single Window and Risk Management Committee.’
A DAILY GUIDE Report
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