General News of Monday, 14 December 2015
One of the Norwegian Journalists, whose report has exposed some critical questions on the power plants deal between Ghana and the AMERI Group, Amund Bakke Foss, has in a Citi News interview insisted that the country could have acquired the plants at a cheaper cost without AMERI, which played the role of “middlemen”.
The journalist questioned why Ghana contacted AMERI Power who also contracted another company in Greece METKA-which finally procured the equipment from American firm General Electric (GE) when the country could have purchased directly to cut down middlemen interference and cost.
The reporter with the Norwegian Newspaper VG, together with his colleague, Rolf J. Wideroe, gave details of the deal which suggests a possible inflation of the cost of the AMERI Power barge by more than 200 million dollars.
The story said Ghana is paying $510 million for ten power turbines when the market value of the turbines is $220 million.
Among other things, the newspaper claimed that Ghana did not do due diligence since the man who it describes as the CEO of AMERI Power, Umar Farooq Zahoor, is a known fraudster wanted by Interpol for financial crimes in Norway and Switzerland.
The paper also claimed that addresses to AMERI Power and the office building it claims to be operating from are non-existent.
But government through the Power Minister, Dr. Kwabena Donkor, has in a statement described the newspaper’s report as false.
According to government, it only signed a deal with AMERI Power and not an individual by name Umar Farooq Zahoor.
It also explained that the said Umar Farooq Zahoor signed as a witness to the agreement and not the CEO of AMERI Power.
It also explained that American firm, JP Morgan, which raised letters of credit for the barges, also did due diligence on the credibility or otherwise of AMERI Power.
Government’s explanation on the cost of plant
• The Ministry wishes to state that the agreement with AMERI is a Build, Own, Operate and Transfer (BOOT) agreement and not an outright purchase of generating plants.
• The Government of Ghana has not made ANY PAYMENTS to AMERI and will not be making any payments for the cost of the equipment.
• Per the agreement with AMERI, the Government of Ghana through the Volta River Authority (VRA) will only make payments to Ameri for power produced and supplied to the VRA just like any other Independent Power Producer (IPP).
• Also, per the agreement, Government was required to provide a standby Letter of Credit (LC) for an amount of US$51 million, which LC has been raised. • Ghana will however assume eventual ownership of the equipment after five (5) years of production and sale of the power to the VRA.
• It must also be explained that the quoted price of $220 million in the Norwegian story for outright purchase of similar turbines is exclusive of all other costs such as auxiliaries, balance of plant, civil works, sub-station, installation of equipment, cost of financing, operation and maintenance etc.
• Under the agreement with AMERI Energy, the cost of all these auxiliary works is being borne by AMERI Energy.
• From the foregoing, it is false to claim that the Government of Ghana signed a $510 million agreement for the plant, when it should have been $220 million.
• On claims that the manufacturers of the plant, GE, could have been contacted to negotiate a direct purchase, the Ministry wishes to state that an earlier offer from GE Consortium to the VRA for similar equipment on rental basis proved to be far more expensive and was therefore rejected by the VRA.
The journalist, Amund Bakke Foss, says although as a reporter, his job is to produce facts and allow readers to draw their own conclusions, the involvement of Farooq the wanted fraudster ignited their interest to pursue the story hence their visit to Ghana.
Despite the government’s rebuttal, Mr. Bakke Foss defended the information they put out in their report.
“We showed Mr. Kwabena Donkor the picture of Farooq, and he admitted that he knew him and that he is the Chief Executive of the AMERI Group, he also pointed to the Prince and said he was the Chairman of the group. The government of Ghana could have easily checked Farooq’s background to establish that he is a wanted man.
“Who are these middlemen , the AMERI Group? Ghana could have bought these turbines cheaper if they didn’t use these middlemen. The government explained that the total cost of the deal will be $510M according to the details of the deal from Ghana’s Parliament but when we checked they could’ve bought it for $220M. We are not alleging corruption or anything; we are only putting out the facts for Ghanaians to know. We hope that Ghanaian journalists will follow up on this issue to find out more than we did to serve the interest of the Ghanaian people.”