‘No deal with Smarttys in $92m electrification project’
The government has refuted claims by the Minority in Parliament that it has entered into a deal with Smarttys Management and Production Limited over the $92-million electrification project.
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According to the Deputy Minister of Power, Mr John Jinapor, the commercial agreement entered into was not with Smarttys but rather with the China Hunan Construction Engineering Group.
He said the government only recognised Smarttys as a public relations consultant for the China Hunan Group, the company contracted by the government to execute the project.
Agreement
Parliament has approved a $92-million commercial agreement for the China Hunan Group to execute rural electrification projects in the Eastern, Volta and Northern regions.
But the deal is said to have been over-priced by $22.7 million after Crown Agents had conducted value for money assessment.
It was later renegotiated to $9 million after discussions between the government and the contractor, with the help of Crown Agents.
The deputy minister, in an interview with the Daily Graphic, said: “I maintain that the government did not have any agreement with Smarttys concerning the $92-million electrification.”
Minority raises eyebrow
Although the agreement between the government and the Chinese company has been approved, the Minority in Parliament last Monday raised concerns over the association of Smarttys with the contract and the overpricing of the project by $9 million.
The commercial contract is for $92 million in respect of the supply and erection of electrical materials and equipment for the electrification of 556 communities in the three regions.
The credit facility is being provided by the Industrial Commercial Bank of China (ICBC).
The argument of the Minority, led by the member for Old Tafo, Dr Anthony Akoto Osei, was that Smarttys was the local representative of the China Hunan Group and was involved in the entire negotiation process.
Dr Osei said Smarttys, after engaging in over-pricing of the branding of the buses, had not "purged itself" of the fraud and, therefore, should not have been involved in any government deal.
“Over-pricing is cost saving”
But the minister said Smarttys only attended a meeting last year as the PR consultant for the Chinese company and that was all the work of the company as far as the electrification project was concerned.
He said the agreement between the government and the Chinese company started in March 2015 which predated the bus branding scandal involving Smarttys.
On the issue of over-pricing, he said the interim report by Crown Agents, an independent body contracted to conduct value for money audit, yielded $22 million in favour of the government.
He said the Chinese company contested the initial conclusion as part of the audit process, leading to Crown Agents revising the amount to $9 million.
He considered the $9 million as "cost saving" and maintained that it would be used to expand the project and ensure that many more communities benefitted.
Smarttys react
Meanwhile, Smarttys has also refuted claims that the company was contracted as the country representative for the Chinese firm.
A statement signed by the lawyer for Smarttys Management and Production Limited, Mr Kissi Agyebeng, said the company only served as the public relations consultant for the Chinese company.
“Our client dissociates itself from the execution of any such contract between the government of Ghana and the other indicated party, China Hunan Construction Engineering Group or any such entity.
“Our client is not party to the contract as reported in sections of the media. Our client has, when requested at various times, provided merely public relations services for the China Hunan Construction Engineering Group,” it noted.
The statement further threatened to sue media houses or persons or groups which associated the company in the matter for defamation.
Smarttys bus scandal
Last year, Smarttys was detected to have over-billed the government by about GH¢1.9 million which involved a GH¢3.6-million contract to rebrand 116 Metro Mass Transit buses.
The branding of the new Chinese Huanghai buses for the MMT with portraits of Mr John Mahama and past presidents caused public outcry, resulting in the resignation of the Minister of Transport, Ms Dzifa Attivor, in December.
The Chief of Staff ordered the company to refund the excess money from the over-pricing.
So far, the first and second instalments totalling GH¢1,000,000 have been paid to the government.
