Cover-Up In GH¢3.6 m Bus Branding Scandal


Selassie Ibrahim & Brand Mahama Buses1



There appears to be a deliberate attempt by government to shield some public officials indicted by the findings of the Attorney-General’s report in the Metro Mass Transit Bus branding scandal that recently took the nation by storm.

The report made damning findings about how public officials, especially those at the Ministry of Transport, sidestepped procurement procedures, contrary to the Public Procurement Act, 2003 (Act 663), and how Smarttys Management and Production Limited, owned by NDC goddess Selassie Ibrahim, defrauded the state in the rebranding of 116 public buses.

It follows investigations ordered by the Chief of Staff, Julius Debrah, into how the award of a contract which was supposed to have cost far less than GH¢2 million ended up making the Ghanaian taxpayer cough up a whopping GH¢3.6 million in spite of the fact that the Ministry of Transport, then headed by Dzifa Attivor, did not have funds to pay for the controversial contract.

That was what compelled the Minister of Finance to dip his hands into the Annual Budget Funding Amount (ABFA) meant to support the country’s Railway Infrastructure Development to pay Smarttys, a company owned by actress Selassie Ibrahim, wife of NDC guru Ibrahim Adam of the famous Quality Grains case.

Even though the Attorney-General, Marietta Brew Appiah-Oppong’s office made recommendations for the public officials involved in the scandal to be investigated by the Economic and Organised Crime Office (EOCO), no such action has been taken except for government to merely ask Smarttys to refund the money to the coffers of the state at its own time, regardless of the fact that the A-G’s report gave a timeline.

 

Stunning Revelations

The A-G’s report uncovered that Smarttys had taken Ghanaians for a cheap ride and defrauded the nation in excess of GH¢1,949,124.26.

In the course of their investigations into the scandal, the A-G’s Department requested the price quotations for the cost of spraying and rebranding of the buses with its specifications from three local automobile companies – Mechanical Lloyd, Japan Motors and Svani Limited – in order to compare the prices with that of Smarttys to ascertain whether the deal with the NDC woman’s company gave the country value for money.

Interestingly, the amounts quoted by all three companies were far less than GH¢2 million, including VAT and NHIL, with the biggest being that of Mechanical Lloyd, which would have charged GH¢1,700,120.49 for the same job, followed by Svani with GH¢1, 573,500.00, with Japan Motors offering to do it for a fee of GH¢1, 553,276.32.

It therefore concluded that “Smarttys charged and was paid more than it should have for the service it provided”, insisting that “this situation would not have arisen if proper procurement processes had been observed and value for money audit conducted.

“In our view, judging from the quotes received from the local automobile companies, government should not have paid more than GH¢1,700,120.49 for rebranding and spraying of the buses (this sum includes Vat and NHIL).”

In spite of the fact that the pro-forma invoice submitted by Smarttys indicated that the cost was inclusive of development and production of artwork, the A-G’s office insisted that “no value was placed on this in the said pro-forma invoices” and therefore “it is highly doubtful that the excess amount of GH¢1,949,124.26 could be the cost of development and production of artwork.”


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Sanctions

The report therefore made recommendations for the “Ministry of Transport to recover the sum of GH¢1,949,124.26 from Smarttys forthwith and not later than 22nd January 2016, failing which interest at the prevailing bank rate should be charged on the said sum.”

Interestingly, government has gone into payment negotiations with management of Smarttys on how to refund the said amount to the state with no interest.

The report also recommended that “all public officers who handled any aspect of these processes and flouted the laid down legislation should be investigated by the Economic and Organised Crime Office” since section 1 of the Government Contracts (Protection) Act (AFRCD 58) provides joint and several liabilities of the contractor and public officials who authorised payment from the public funds in the circumstances described in that section.

Surprisingly, the office of the Attorney-General among others uncovered that “Smarttys commenced and concluded the rebranding of the buses even before the procurement process was commenced and before any contract was signed.”

The report said “we arrived at this finding because the payment of the sum of GH¢3, 649,044.75 (GH¢3.64 million) to Smarttys for the rebranding of the buses was initiated by a letter dated July 8, 2015 from the Ministry of Transport to the Ministry of Finance which clearly states that the rebranding of the buses had been completed.”

Meanwhile, the request from the Ministry of Transport for Smarttys to submit a quotation was dated July 15, 2015 while Smarttys’ response was dated July 17, 2015 and the request from the Ministry of Transport to the Public Procurement Authority (PPA) to sole source Smarttys was dated July 28, 2015.

Interestingly, the PPA approving the Ministry of Transport’s request was dated July 29, 2015 while the contract was executed on July 31, 2015.

Defects

It however emerged during the investigations that “the request to the PPA to sole source Smarttys did not reveal that the buses had already been sprayed and rebranded by Smarttys prior to the request”, an indication that the rebranding of the buses had been completed aside pre-dating the request to the Public Procurement Authority (PPA) for sole sourcing.

The office of the Attorney-General could equally not come to terms with the fact that “the Ministry of Transport and Smarttys executed a 2-page contract with only four paragraphs” which “did not give a defects liability period and did not provide for the time or manner of payment” aside the fact that the contract did not provide for events of default and did not stipulate any warranties.

Even though the AG’s office admitted the fact that they did not get the opportunity to review the contract prior to its execution, they indicated that “the contract does not contain relevant and adequate terms and conditions regarding a standard contract of this nature.”

By Charles Takyi-Boadu


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