Abrogating GPGC deal saved us more; we’ll probe $170m judgment debt – Dame
The Attorney-General and Minister of Justice, Mr Godfred Yeboah Dame, has stated that processes are underway to thoroughly probe circumstances that led to Ghana being slapped with a $170 million judgment debt after the cancellation of a power purchase agreement with Ghana Power Generation Company (GPGC).
In a television interview with Citi TV on its Point of View programme hosted by Bernard Avle, Mr. Dame said he is duty-bound to ensure that the case is investigated and persons found culpable duly prosecuted.
He said the probe is not targeted at any particular individual, and that it is in the interest of the State to bring clarity on issues such as the relevance of the agreement and the cost.
“I have indicated that first and foremost, we are going to refer part of the process for examination by the CID [Criminal Investigations Department of the Police], and that enquiry will even establish whether it was necessary for the agreement to be entered into, whether indeed it was expensive,” he said.
Mr Dame said “I would be enjoined by duty to prosecute…. To ensure that there is due administration of justice in the country. This has nothing to do with any personalities or characters in question. ”
Why the debt?
A Commercial Court in London earlier this month rejected an appeal from Ghana against a $170 million judgment debt awarded a contractor, The Ghana Power Generation Company (GPGC).
The International Court of Arbitration ordered the government of Ghana to pay to “GCGP the full value of the Early Termination Payment, together with Mobilization, Demobilization and preservation and maintenance costs in the amount of US$ 134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six per cent(6%).”
The judgement has sparked serious conversations, especially as it comes barely a month after Ghana secured a €170m loan facility for the establishment of a development bank.
The Akufo-Addo government cancelled the GPGC agreement upon recommendation from a committee it set up to review all the power agreements the country had entered into.
After the official termination in 2018, the company dragged the government of Ghana to the United Nations Commission on International Trade Law (UNCITRAL) Tribunal to demand that the government compensate it for breaching the contract.
The court awarded the company an amount of $170 million to be paid by Ghana, but Ghana in taking its chance challenged the arbitration award in a UK court but could not meet the deadlines to file its case citing among other things the outbreak of COVID-19.
‘A better option’
Meanwhile, the AG says the decision to cancel the contract saved the country so much more and so it was a better option.
“The state clearly was saved incalculable financial loss by the decision taken by the NPP. The report shows that if all the agreements had been allowed to run, we were going to suffer $17.6 billion over the period.”
“That legal decision taken in the context of the global solution of saving the nation an amount of $17 billion over 12 years, for me was better,” Mr Dame said.
An arbitration tribunal earlier this year ordered the government of Ghana (GoG) to pay $137.9 million to Ghana Power Generation Company (GPGC), an independent power producer (IPP), for terminating a power purchase agreement (PPA) between the two parties in 2018.
Graphic Online's Emmanuel Ebo Hawkson reported that out of the amount, $134,348,661 represents early termination payment claim, which in itself is made up of $69,361,680 as early termination fee, $58,492,005.562 for mobilisation cost, $6,462,528 as demobilisation cost and $32,448 as preservation and maintenance cost.
The arbitration tribunal also awarded $614,353.86 against Ghana as the cost of the arbitration, and also awarded cost of $3million against Ghana, which is the legal fees expended by GPGC during the arbitration.