Suspend renegotiated AMERI, Karpower deals — Minority

BY: Victor Kwawukume
Library photo
Library photo

The Minority in Parliament has called on the government to, as a matter of national interest, suspend the renegotiated Ameri Power and Karpower deals, saying they are riddled with scandalous content and are a rip-off.

Presenting the position of the Minority on the deals at a press conference in Accra yesterday, Mr John Jinapor, the Member of Parliament for Yapei/Kusawgu and former Deputy Power Minister, said the government should rather make the details available for broader public scrutiny before going ahead with the deals.

“We call on the government to, as a matter of urgency and in the supreme national interest, suspend the Ameri and Karpowership deals and make the details available for broader public scrutiny,” he said.

He argued that the renegotiated agreement, as presented by the government, had no legal opinion from the Attorney-General.

Additionally, he said, officials of the Public Utilities Regulatory Commission (PURC) who appeared before the Mines and Energy Committee of Parliament confirmed that they had not approved the proposed tariff structure and that there was no value for money audit on the agreement.


Scandalous

Mr Jinapor said the Minority found as scandalous the attempt by the government to introduce a third party, Mytilineos International Trading Company, to assume ownership of the power plant for an extended 15-year period at a cost of $1.035 billion when it was left with just two and a half years for the government to take complete ownership of the power plant.

He said the current agreement had a tenure of five years, with a total payment of $510 million.

"It is important to emphasise that the government of Ghana is not required to make upfront payments. At a monthly payment of $8.5 million, the government should be left with an outstanding amount of $255 million spread over the next 30 months, after which the Ameri plant is expected to be handed over to the government of Ghana," he said.

Critical look

According to the Minority, it had taken a critical look at the proposed renegotiated agreement and could confirm that the agreement was nothing but “a complete rip-off and an attempt at rent-seeking by persons in high places”.

It posited that it was universally acknowledged that the first and foremost responsibility of any well-meaning government was to ensure that due process was adhered to in presenting agreements before Parliament.

“It, therefore, came as a huge shock when the Minister of Energy, Mr Boakye Agyarko, laid before Parliament the new agreement without observing basic principles and protocols,” Mr Jinapor said.

Parliamentary approval

The government is seeking approval from Parliament to review the build, own, operate and transfer (BOOT) agreement it entered with the Africa and Middle East Resources Investment Group (AMERI Energy) on February 10, 2015.

A memorandum submitted to Parliament indicated that the new transaction had a waiver of $52.7 million due AMERI Energy that the government would have had to pay.

Besides, the memo said, there would be a reduction in the standby letter of credit (SLC) from $51 million to $37.5 million and cost savings of $405.067 million over a period, while electricity tariffs on end users would be reduced.

A Deputy Minister of Energy, Mr William Owuraku Aidoo, laid the memorandum last Wednesday, requesting Parliament to approve the novation and amendment agreement dated July 20, 2018.

Executive approval given

It said President Nana Addo Dankwa Akufo-Addo had given Executive approval for the novation and amendment agreement due to the gains to be made in favour of the country.

However, Mr Jinapor said: "Even as we discuss this Ameri agreement, we wish to also bring to your attention yet another scandalous and corruption-riddled agreement being renegotiated by this same Energy Ministry under the 450 Karpower agreement."

"This renegotiated agreement (Karpower) is even worse than the Ameri renegotiated agreement presented to Parliament by Mr Agyarko.

"Indeed the renegotiated Karpower agreement stinks... with big fishes in government superintending the looting of the state under this new deal," he said.

He explained that the Minority would soon engage the total Ghanaian public on "this stinking deal and we shall make the details available to you".

"To extend the Ameri agreement for 15 more years at this inflated cost when we have about two and half years for the plant to revert to government", he said, was criminal and a "major blow to our nation. Everything that has happened so far to the Ameri transaction shows that the NDC did nothing wrong and rather it is the NPP that has many questions to answer for the way they have handled this matter so far."

Background

As part of measures to address power supply challenges, the government entered into a BOOT agreement with AMERI Energy on February 10, 2015 for the provision of a fast-track turn-key power generation solution through the construction of a power plant.

Under the agreement, AMERI Energy installed 10 gas turbines and all related equipment and provided certain services related to the operation and maintenance of the plant for a period of five years.

The first BOOT agreement was ratified by Parliament on March 20, 2015.