Government to abrogate $510 million AMERI deal

It is emerging that the deal involving Africa & Middle East Resources Investment Group – otherwise known as AMERI Group or AMERI Energy – which had become the talk of town, will be abrogated by the New Patriotic Party (NPP) government anytime soon.

A highly-placed government source said the President Akufo-Addo-led government has decided to cancel the contract signed between the John Mahama-led National Democratic Congress (NDC) administration and AMERI for the supply of 256 mw of power because the deal is a rip-off with Ghana losing about $150 million.

Grounds Of Fraud

A 17-member committee chaired by Lawyer Phillip Addison had recommended to the government that it should call back owners of the Dubai–based company for re-negotiation and advised that should the company refuse to honour the invitation, the government should renounce the agreement on grounds of fraud.

It seems the government is following the advice of the Addison Committee, which had been set up by the Ministry of Energy to restructure the $510 million Build, Own, Operate and Transfer (BOOT) Agreement between Ghana and AMERI Energy.

DAILY GUIDE has learnt that there are too many fraudulent aspects in the whole deal, which is not in the interest of the country, although the minority NDC, which had signed the contract with AMERI during their time in office in early 2015, has continuously mounted a spirited defence of the Dubai-based company.

APR Factor

According to the source, Mr John Mahama’s government, in preparing to sign the controversial deal, had always created the impression that an entity called APR – a US company with years of experience in the provision and installation of General Electric TM 2500 aero-derivative gas turbines – was the company contracted to bring in the 10 turbines. However, the deal changed at the eleventh hour with the introduction of AMERI.

He said from the correspondence between the parties, it was clear that AMERI Energy was likely to have been created to circumvent the country’s procurement process that it was still APR (US) that government was dealing with.

The source said at the preparatory stage, APR Energy was offering a far cheaper option but the NDC government ended up handing the contract to AMERI Energy, which did not appear to have any experience in the field and also came at an outrageous cost of $510 million.

Former power minister who supervised the alleged dodgy deal, Dr Kwabena Donkor, rose to the defence of the deal. He said, “Who should bear the allegation of fraud? The agreement went through cabinet, the committee on mines and energy recommended by consensus to plenary and was passed by parliament. Was parliament party to this fraud? Is the plant not running and operational? Does it not have the cheapest tariff of all the thermal plants in the country? First of all, there was no fraud. The committee cannot use the relationship between the development and the contractors as the basis of fraud.”

AMERI Sublets Contract

Even when AMERI was given the contract, it sublet it to another company called PPR of Turkey and charged over $150 million commission.

In the course of the investigations, the Addison Committee said it took notice of the fact that the whole of the project was executed and financed by PPR, which was registered in Turkey at a charge that was considerably lower than what was agreed between the Government of Ghana and AMERI Energy.

Inflated Charge

A source close to the committee said the Variable Charge in the contract was around $8 million but by the time the contract was executed it had ballooned to about $16.6 million per annum.

DAILY GUIDE investigations indicate that state institutions that represented the country in the deal had said the ‘unstable’ variable charge was a mistake while AMERI officials also allegedly admitted the same mistake.

Dubai Trip

It has been said that the 17-member committee had their all-expenses trip to Dubai paid by AMERI when they commenced the investigation, but a source said the whole idea was at the instance of the Dubai-based company.

“The committee requested AMERI officials to be present in Ghana for the matter to be delved into but they said one of their Sheikhs was doing military service and was not going to be available,” the source said adding, “The committee proposed a neutral venue in London and they still insisted it was impossible and finally proposed that the members travel to Dubai for them to bear the cost.”

The Deal

The NDC government has signed the BOOT Agreement on February 10, 2015 as an emergency power arrangement to help reduce the power supply deficit at the time, and the project was expected to be delivered within 90 days after the fulfillment of conditions precedent, but it was never done within the stipulated period.

Then President Mahama’s brother’s company – Engineers and Planners – was given part of the contract at a highly ridiculous cost.

“Even though the plant is operational, several omissions and concessions were made in the BOOT Agreement which require re-negotiation, amendments and restructuring of the Agreement. The Agreement simply is grossly unfair and is not as it presently stands, in the best interest of Ghana,” the Addison Committee had said.

“The Committee has enumerated technical, financial and legal observations and recommendations in the report that are aimed at rectifying the anomalies in the BOOT Agreement for effective and efficient implementation of the project,” it added.

It said that the recommendations were also to serve “as a guide for future negotiations of power projects,” and advised that the government “should take all necessary measures to avoid power supply deficits which result in the execution of emergency power agreements.”

Heated Debate

The AMERI deal, which involved the installation of 10 General Electric TM 2500 aero-derivative gas turbines at the cost of over $510 million at the Aboadze Power enclave, near Takoradi in the Western Region, later turned out to be exorbitant for the taxpayer, thereby sparking heated political debate.

The lid was blown in December 2015 by award-winning Norwegian newspaper Verdens Gang (VG) which published that the power generating gas turbines were estimated to cost $220 million on the international market, but the NDC government contracted them for $510 million for Ghana, excluding service charges.

The newspaper’s investigative journalist tracked a Pakistani-born Norwegian, Umar Farooq Zahoor – a fugitive who is said to have played a leading role as a director in the deal between Ameri Group and the government.

According to the Norwegians, Umar Farooq was said to be the middleman between the Ghana government and the Dubai-based single-purpose company.

Outrageous Swindle

Bright Simons, a brilliant social innovator and researcher, later said that the deal “might be the most outrageous swindle this country has seen in the last decade.”

According to the founder and president of mPedigree, who is also a leading member of IMANI Ghana – a think-tank – the country paid $260 million more in the deal which translates into 21% per annum, saying, “That 21% effective annual interest rate is the product either of criminal incompetence or sheer recklessness, which leads many right-minded persons to suspect underhand dealings.”