PRESS CONFERENCE BY HON. YAW BARIMAH, MINISTER FOR WORKS AND HOUSING

.... ON THE MINORITY GROUP’S CAMPAIGN OF MISINFORMATION BASED ON THE INTERIM AUDIT REPORT ON THE SPECIAL BUDGETARY ALLOCATION 28TH JUNE 2002

On 19th June 2002 the Minority Leader in Parliament, Hon. Alban Babgin issued a press statement on an alleged illegal appropriation of ?150 million by former Chief of Staff, Mr. Jake Obetsebi-Lamptey from the Castle renovation project.

The statement, which was said to have been the outcome of an “investigation” by the group, was eventually revealed as an allegation based on an interim report by the Audit Service, which was leaked to Mr. Babgin and his group under very mysterious circumstances.

Our reservations with the language in the interim report and its leakage to obviously embarrass the government not withstanding, this Ministry as part of the government of His Excellency President J. A Kuffour takes pride in the fact that it submitted itself for auditing.

An interim report by the Audit Service on “Management Letter on the Accounts of Ministry of Works and Housing December, 2002”, and signed by the same Mabel Irene Krow, Assistant Director/CGAD/MWH had this to say: “The Annual Report on activities of the Ministry for the year 2002 has not been complied with at the time of writing this report, in contravention of section 115(1) of FAR 1979. This omission made the review of activities undertaken by the Ministry in the year under review by the inspection team very difficult”.

Indeed, that report noted that 2 lifts meant for installation in the Tower block of the State House and for which an amount of US4330, 000 which at current forex rates is over ?2.6billion was paid to Messrs Electrovator Limited was not supplied and installed.

Even then, the Audit team was mindful to use more professional language in its report, in stark contrast to the very political and prejudicial language used in the leaked interim report under contention.

The leaked interim report has been copiously quoted in a campaign spearheaded by Hon. Babgin and his group, which has sought to raise these major allegations: That Mr. Jake Obetsebi-Lamptey, while Chief of Staff at the Office of the President, collected and failed to account for ?150 million meant for the renovation of the Castle.

That Hon. Kwamina Bartels, while Minister for works and Housing, authorized the renovation of 4 bungalows already sold out by the government and as a result, caused the state to lose ?162,565,525.

That the government, by releasing a total of ?15,200,500,817.73 for a number of projects on State facilities, was being extravagant, if not wasteful.

As is the practice, the interim report was presented to this Ministry to enable it respond to the queries raised by the audit team before the final report. The letter to this effect was dated 8th May 2002.

A meeting was arranged with the team at which the Directors and other staff were present. Explanations and comments on some aspects of the draft report were given to the team.

On the 10th of June 2002, a letter signed by the Ag. Chief Director provided written explanations and comments on the draft report to the Audit Team.

Specifically on the question of the ?150million released to the Office of Chief of Staff, it was explained that ?100m (One hundred million cedis) had been paid out to a contractor, Dumakwae Ltd as advance for refurbishment works on the President’s Office . A copy of the memo to this effect from the Cashier at the office of the President to the Chief of Staff was attached.

Of the remaining ?50million, the letter explained that it had similarly been paid out as advance to another contractor, Messrs. IDR engaged on works at the Castle. It explained further that, that sum had been deducted from a payment certificate to the contractor IDR. A copy of the certificate to this was attached to this explanation.

Thus, it is clear that the ?150m was paid, not to Hon. Jake Obetsebi-Lamptey in his personal capacity, but through the Chief of Staff’s account to 2 contractors, Messrs Dumakwae Ltd. and IDR as advances for refurbishment works on the Castle. It is clear that both contractors were engaged on renovation work at the Castle for which those advances were made. That was the state of affairs as at 10th June 2002. The Audit Team had these comments and the full facts.

That the Minority Leader and his group either disregarded the explanation or did not bother to find out, when he could so easily have done so, tends to give a lie to his claim that he was motivated by a desire to protect public funds.

Another issue tackled in the draft report and which Hon. Bagbin subsequently picks on is the inclusion of 4 bungalows in the list of houses to be renovated in the exercise. For this, the then sector Minister, Hon. Kwamena Bartels is singled out for blame by the draft report, which proceeds to say that he should be surcharged.

We must say that at those meetings, it was explained that the list of bungalows to be rehabilitated in the exercise was drawn up by the PWD and sent to the then Minister. Upon receipt of the list the Minister set up a committee chaired by the Chief Technical Advisor (Housing) of the Ministry. This committee checked the list and the valuation and put the jobs on tender. It eventually evaluated the bids and awarded the contract to those who were successful.

It may perhaps be added that the committee was made up of representatives from the Ministry, PWD and AESL.

The Chairman of the Committee, the Chief Technical Advisor (Housing) of the Ministry is also the chairman of the Ministry’s ongoing redevelopment exercise. He was so peculiarly placed to know issues relating to the two projects but failed to identify the 4 buildings, which were the subject matter of a proposed sale under the redevelopment exercise.

Thus the 4 bungalows had been put on tender and awarded for renovation. He did explain that before the contracts were fully executed, he realised the mistake and ordered that the work be brought to a halt. Materials,which had been procured for completion of the works were recovered and given to PWD Prestige for re use. These materials were valued at ?7,371,000.00.

One of the bungalows was bought in May, this year at a price of ?1,700,000.00 as against the original bid price of ?1,541,700.00, an increase of ?159,700,000.00.

In addition, one of the 4 bungalows has not been bought and is now being occupied by public officials. It still remains Government property. The value of works on this building is ?51,094,915.00. This together with the cost of materials saved and reused adds up to ?58,465,915.00. Thus if there was any loss at all, it cannot be?162,526,520.00 as claimed but that figure less ?58,465,915.00 that is ?106,249.440.00

It may be pertinent to note that whereas before the renovation the highest bid for the third building was ?1,541,700,000.00 in May this year, it was sold for ?1,7 billion, an improvement of ?158 million. This saving, together with the material saved and used more than make up for the sum paid for the renovation works on the 4 bungalows. In other words, no loss has been occasioned to the State.

We make these observations not because we are happy with the initial error and seek thereby to justify it, but we are making these points to show that perhaps the Audit Team has been less charitable and the Minority leader plainly mischievous in attributing losses to the tune of ?162,526,520.00

Our primary concern is the alacrity with which the Audit team and the Minority leader blame the then Minister, Hon. Bartels for this whole episode and seek to saddle him with personal responsibility for the payment of this amount.

The CTA (Housing) of the Ministry admits that he failed to detect the error and thus advise the Minister. This was further confirmed in the written explanation that was made available to the Audit Team by 10th June 2002. To seek to blame the then Minister for losses to the State, if there were any at all, is something we cannot comprehend.

Now the issue of the total cost of over ?15 billion involved in the following projects:

Renovation and refurbishment of the Castle. Renovation and refurbishment of the Vice President’s official residence. Renovation and furnishing of 50 Government bungalows Construction of offices for Private Sector Ministry. Renovation and refurbishment of offices for Women’s Ministry. Renovation and refurbishment of residence of Speaker of Parliament. Rehabilitation of de-confiscated house of former Prime Minister K.A. Busia. Emergency Flood Control works at flood prone channels. Provision of AESL Fees for Consultancy, supervision and advertisements.

All these are what amount to the total of over ?15billion. Let us compare this amount to approximately $3million (?21billion at the time) spent on a single project, the renovation and refurbishment of the “Australia House”, a State Guest house, in 2000 by the NDC government.

Before then, in 1999, the refurbishment of only the Credentials Hall of the Castle had been done at the cost of ?567,158,439.58 million. Unfortunately, there was no auditing of that project to ascertain how much really went into actual work on the Hall.

It is instructive to note that while on his so-called crusade for zero tolerance for corruption, Hon. Babgin and his group most conveniently forgot to notice and raise the issue of the evasion of taxes by Sqd. Ldr. Sowu, National Vice Chairman aspirant of the NDC, Hon. Alhaji Abukari Sumani an NDC Member of Parliament and other landlords of the State with NDC sympathies.

The interim report declared that between them, these landlords evaded tax on their rents to the tune of ?12.2 million. For the apostles of probity and accountability claiming to be on a mission for zero tolerance, however, tax evasion is a non-issue, especially where it involves some of their own.

The people of Ghana must rest assured that this Ministry and indeed this Government, unlike others, does not intend and will not by any actions of its officers, denude from His Excellency the Presidents stated policy of zero tolerance for corruption.

The Minority NDC in Parliament, through its Leader, claim that in acting the way they did, were motivated by a desire to protect public property or funds.

We suggest that they give better meaning to that claim by tackling with the same zeal, some of the many acts of malfeasance contained in the Auditor General's Reports since 1992, all of which were disregarded with contempt, especially the latest report of 2000 published in 2001.

To our friends in the Minority, the Knights in shining armour that they want us to believe they are, on an expedition of fault finding, we say for the time being, 'physician heal thyself'.

Thank you very much, and God Bless Us All.