Business News of 2014-06-26

Compensation for gas project lands dependent on CDB loans?

Owners of land acquired compulsorily for the Ghana Gas Company (Ghana Gas) will have to wait for the disbursement of the China Development Bank (CDB) loan before compensation can be paid to them.

While Ghana Gas is almost through with the payment for reimbursement for the first phase of compensation for crops, buildings and fish farms, the second phase, which is payment for the land itself, is awaiting funds from the Chinese loan.

The Chief Director of the Ministry of Energy, Prof Thomas Mba Akabzaa, told the Judgement Debt Commission at its sitting yesterday that compensation for the land had been factored into the CDB loan. He said the payment of compensation had delayed because the entire CDB loan had not been released.

CDB loan

The CDB agreed to lend Ghana $3 billion in December 2009 for a number of projects. Majority of the projects will be infrastructure, including the country’s gas facility. The two parties signed the agreement on December 16, 2011 and it was given parliamentary approval in February 2012.

However, two years down the line, only $600 million out of the $3 billion has been disbursed by the Chinese, although Ghana has paid some $54 million as commitment fees.

Even though Ghana Gas had no case to answer at the commission, Counsel for the commission, Mr Kofi Dometi Sokpor, told the Daily Graphic that the commission wanted to learn from its experience with respect to the land acquisition process as it investigated issues relating to the payment of compensation for flooded areas in the Volta Basin.

Representatives of the Ministry of Trade and Industry, Kumasi Metropolitan Assembly, Ashanti Regional Office of the Department of Urban Roads and Ministry of Energy were at the commission to respond to issues on judgement debts awarded against their institutions.

Compensation process

Walking the commission through the compensation process in respect of Ghana Gas lands, Mr Enoch Larbi Aboagye, the General Counsel for the company, said the entire corridor where the Ghana Gas facilities were located had been acquired compulsorily by the government.

He said there were seven different lots of land, six of them located in six different areas, while the seventh was a pipeline corridor from Atuabo to Aboadze. He said based on the assessment, Ghana Gas proceeded to make the payments to the owners in an exercise which had been going on since 2012.

He, however, indicated that there were a few isolated cases where payment had not been made. “This is because between the time of the assessment and time of payment, some of the owners passed away. We have requested their families to provide the needed documentation for payment to be made,” he added.

In respect of the land itself, he said the Executive Instruments (EIs) dated June 13, 2014 acquiring the lands were published in the gazette a little over a week ago.

“We are waiting for the appropriate government agency to publish the EIs in the national dailies, after which claimants will come forward with their claims and then we will collaborate with the appropriate agencies to pay them,” he said.