Energy Ministry denies $1m bribery allegation

The Ministry of Energy has denied allegations that some officials of the ministry were paid bribes by TAQA, the United Arab Emirates based majority shareholder of the Aboadze thermal plant, when the company sought approval for its expansion works at the Takoradi Thermal Power Station in 2009.

A rejoinder signed by E Armah-Kofi Buah, Deputy Energy Minister, described the allegations, made by TAQA's former Chief Executive Officer, Peter Barker-Homek, and subsequently published by the New Statesman , as not only “baseless and unfounded” but also “malicious, mischievious and calculated at deliberately denigrating the Ministry and its good people.”

It stressed: “The Ministry of Energy with core responsibility for the formulation and implementation of policy in the entire energy sector including power has transparent and elaborate procedures for entering into contracts and agreements and therefore wishes to state categorically that there isn't any iota of truth in the said publication.”

Mr Barker-Homek has sued his former employer in a United States district court over breach of employment contract. According to the statement of claim, he was “fired” by the company when he “tried to put a stop to the [payment of] kickbacks, bribery, accounting fraud and corruption at TAQA.”

According to confessions of TAQA's former CEO, in its bid to triple the output of its Takoradi Power Station (110MW), TAQA paid multimillion dollar bribes to Ghanaian politicians in the energy sector in 2009, the year that TAQA sought approval for its expansion.

“The authorization to triple its output was obtained by inflating the official price of the expansion works” and then paying part of the surplus to Government officials, according to Peter Barker-Homek, the CEO of TAQA at the time.

“The Ministry of Energy finds it unfortunate that the unfounded allegations of an obviously disgruntled former employee of TAQA have been given prominence by the Statesman Newspaper without cross-checking the veracity of the allegations from the Ministry, VRA or TAQA unless the paper has other motives other than holding public officials to the principles of honesty, transparency and accountability,” the rejoinder noted.

It is, however, not true that the New Statesman made no effort at contacting the Ministry of Energy about the allegations. The paper's editor was greeted with threats of “I will deal with you” when he contacted Mr Kofi Buah, Deputy Energy Minister, who was not prepared to speak to the paper.

The rejoinder also pointed out some “material inaccuracies” in the claims by TAQA's former CEO. “For example, they refer to a tripling of Tico's plant from 110MW to 330MW, but in fact the project sought to increase the capacity of the plant by 50%, from 220MW to 330MW,” it explained.

The rejoinder continued: “More substantively, the Paper refers to some type of project or contract cost that has been overstated with the excess being used to make payments to Ghanaian officials. In particular, there is reference to the Memorandum of Understanding (MOU) with the Volta River Authority (VRA) and the Government of Ghana, but that MOU makes no mention of any particular project or contract cost. Instead it sets forth a simple framework for the parties to work together, including through international tendering of the engineering, equipment supply and construction works, to develop a mutually acceptable arrangement for the expansion of the Takoradi expansion project. In fact, there are no contracts in place for the Takoradi expansion project as to which amounts have been agreed to be paid. As such there is no contractual source for the excess amounts the reported allegations assert to have been accessed over that last three or four years to be paid to Government officials.”

It added: “Moreover, the major costs on the expansion project are for equipment supply and construction, arrangements for which are still in the selection and negotiation phase. Such selection and negotiation follow from an international competitive bidding process in which the VRA, GoG and its TAQA's international advisors have fully participated, which again cuts completely against the allegations contained in the articles.”

“In order to provide a background to this subject we wish to point out that the expansion work is for the Takoradi International Company (TICo) Limited portion of the Takoradi Thermal Power Station which is jointly owned by the VRA and TAQA. The decision to carry out the expansion work for the Takoradi Thermal Power Station was taken in 2001. However, because Ghana had declared itself as a Highly Indebted Poor Country (HIPC), it became difficult to secure the necessary funding for the project because of the economic and financial conditionality that underpinned our HIPC status. The idea was therefore abandoned until 2003 when it was revisited. The authorities at the time went through the processes until 2006 when the funding was secured but unfortunately their effort did not get approval from the Government of the day and the funding was stalled,” the rejoinder explained.

“However, in coming into office in 2009, the current NDC government decided to ensure that the expansion work of the plant was achieved and as we speak the process is still at the infant stage. The request for proposal for the recruitment of an Engineering, Procurement and Construction (EPC) was prepared in August/September 2012 and the bids were received on January 31, 2011. The evaluation, clarification and validation of the bids as part of the EPC process are still ongoing and are planned to be completed at the end of September 2011. The choice of the EPC contractor and the contract price will be known at that time. In other words, the exact price of that contract is currently unknown,” the rejoinder added.

It continued: “Interestingly it was in 2006 that Mr. Peter Barker-Homek was engaged by TAQA as their CEO. Mr. Baker-Homek's contract with his employers was terminated in 2009, the reason for which he is in court. The question that needs to be asked is: was it between these periods (2006 to 2009) that the said amounts were allegedly paid to government officials? If the answer turns out to be yes, then as a country it would not be difficult to locate those who were in charge of our energy sector at that time.”

Barker-Homek, recruited to Taqa after working at energy companies including BP Plc, was allegedly forced by General Manager Carl Sheldon (ref) to sign a severance agreement, according to the breach-of-contract lawsuit filed August 27 2010 in Detroit federal court.