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Business News Fri, 29 Jul 2022

BOST questions Jinapor's arithmetic, sets record straight on alleged US$78m scandal

The Bulk Oil and Transportation Company (BOST), has reacted to a US$ 78 million procurement scandal allegation by the Minority in Parliament.

The Minority in Parliament is calling for an independent probe in an alleged US$ 78 million procurement scandal at the Bulk Oil and Transportation Company (BOST).

Speaking to the media in Parliament today July 28, 2022, the MP for Yapei-Kusawgu Constituency and Ranking Member, Mines and Energy Committee, John Abdulai Jinapor mentioned that a single unit tower that can be constructed at US$ 39 million has been inflated and approved by the Public Procurement Authority (PPA) at US$78 million.

“We, the Minority in Parliament, hereby serve notice that anything short of an independent investigation shall be rejected and denounced by the NDC and the good people of Ghana. We shall remain vigilant and resolute in our quest to ensure that the continuous looting and plundering of the resources of BOST which is our collective strategic national asset is brought to an immediate halt,” John Abdulai Jinapor told pressmen.

Reacting to the allegation in statement, the Bulk Oil and Transportation Company (BOST) said the current management of BOST in correcting the procurement anomaly, applied to the Public Procurement Authority (PPA) for a ratification of the contract and to vary the terms to procure one of the two-tower building since the current cashflow position of the company would not permit the purchase of the twin-tower.

According to the statement, the $39 million submitted to the PPA for approval is the original contract sum as signed in 2015 in contravention of the procurement law. To request for a variation of the terms, the normal procedure required that the original contract gets approved before the variation.

Read full statement from BOST:

RESPONSE TO ALLEGATIONS MADE BY THE RANKING MEMBER OF THE MINES AND ENERGY COMMITTEE


a. BOST entered a contract to construct a twin-tower head office building in 2015 and paid a commitment fee of $8 million in 2016 for the work to begin.

b. The project was to cost a total of $39 million (VAT Exclusive).

c. The Procurement process was not followed through by the then management of the company at the time.

d. Allegations of inflated cost resulted in the project being halted in 2017.

e. A value for money (VFM)audit was carried after halting of the project.

f. Forensic audit by EOCO also confirmed that there was no malfeasance in the process.

g. The current management of BOST in correcting the procurement anomaly applied to the Public Procurement Authority (PPA) for a ratification of the contract and to vary the terms to procure one of the two-tower building since the current cashflow position of the company would not permit the purchase of the twin-tower.

h. The $39 million submitted to the PPA for approval is the original contract sum as signed in 2015 in contravention of the procurement law. To request for a variation of the terms, the normal procedure required that the original contract gets approved before the variation.

i. In the year 2020, an independent valuer appointed by both parties valued the project at $49.6 million.

j. The Board and Management of BOST decided to purchase one block out of the two. The contractor valued the single block to be procured at $23.5 million (VAT Exclusive).

k. A no objection was secured from the Ministry of Finance and Economic Planning to proceed with sourcing funds to carry through the procurement of the single block.

l. The ratification of the initial contract was secured on the 19thMay, 2022.

m. BOST is currently occupying a rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of rising cost of rent in the current premises.

n. The blocks are not the same in terms of the facilities they harbor. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented out to raise further income for BOST.

o. The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous.

These are the facts as pertaining to the BOST Head Office building which started in 2016 and is yet to be occupied by the company.
Source: atinkaonline.com
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