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Opinions Sun, 2 Feb 2003

There Is More to Telenor Contract, Than....

...MEETS THE EYE

by Ebo Quansah for Public Agenda

There must be something about the Telenor deal that Ghanaians has not been told yet. The zeal with which the whole thing is being packaged at a time this nation is still grappling with the mess left behind by the bringing in of Telekom Malaysia suggests that there is an interest that ought to be disclosed.

I owe nobody an apology for this assertion. For it flies against conventional wisdom that we could jump from one problem into the other without ensuring that the first problem created had not been solved yet.

When Telekom Malaysia was brought in, championed by one-time Minister of Transport and Communications Edward Salia, there was general hue and cry. The problem was over the contractual agreement, which ensured that the 30 percent minority shareholder appointed four out of the seven-member board as well as the Chief Executive. At that point in time, ministers in the National Democratic Congress went into overdrive to explain away the fact that Telekom Malaysia were strategic investors who had come to revamp our telecommunications conglomerate and make it one of the most modern in the world. The Malaysians had the money and know-how to turn the company around.

Their cash and know-how was what was dictating the terms laid out in the contractual agreement. They were in this country for about five years. In that period we got to know that they were after all not required to invest cash in the company. The contract did not require them to do so.

Instead, insiders at Ghana Telecom allege that while the Malaysians were in control, they contrived to award lucrative Ghana Telecom contracts to Malaysia companies to the tune of $200 per annum. They paid only $38m for their 30 percent share together with their local collaborators in G-Com.

Many Ghanaians would not have complained if the Malaysians had turned Ghana Telecom round and made it the big corporate body for which they were contracted. That is why I am appalled at the rush with which officialdom are installing Telenor of Norway to take charge of Ghana Telecom even before the nation could see the back of the Malaysians. What is responsible for the rush? I hope somebody will answer this question and pretty soon.

The minister seems to suggest that he has got an understanding from Telekom Malaysia at a meeting at his office and that the Malaysians had agreed to off-load their shares. That could be very true. But the assertion of some of us is that until and unless the state of Ghana buy off the Malaysian shares, this nation could not purport to do anything with Ghana Telecom without the express opinion of Telecom Malaysia or G-Com.

There is evidence that the Malaysians have been very difficult to deal with on a number of occasions. Even after the Malaysian Prime Minister Mahatir Mohamed and President John Agyekum Kufuor had reached an agreement on the need to modify the contract under which the minority share-holder came to dictate the direction and key management of the Ghanaian Company, the Malaysians would not budge.

The Minister is suggesting that the news item that Telekom Malaysia had gone to an arbitration court in London demanding $300 in for their 30 percent share in Ghana Telecom has no factual basis. But this is a story that has done a number of rounds in the international media including the British Broadcasting Corporation, which is noted for its factual representation. Be it as it may, what are the Malaysians demanding for their shares? Why have Ghanaians not been told about what the Malaysians want then?

I am getting a bit uncomfortable with the way the Telenor deal is being roadroaded in without proper debate by the people of Ghana who after all own the 70 percent shares. I have heard suggestions from very knowledgeable quarters that because Ghana Telecom is a corporate body, it ought to be allowed to handle its own affairs. That is a very brilliant submission. But if that is the case, what business has the minister getting involved in the whole drama. Over the years, Ghana has had the bitter experience of brining in so-called foreign expertise to run local enterprises only for the nation to discover that it has been short-changed by the foreign imports. The experience at Ghana Airways is too glaring to ignore. In the mid-1990s, the Government of Ghana contracted Speedwing, a subsidiary of British Airways to manage Ghana Airways. By the time public opinion drove out the Managing Director Rex Lezard, Speedwing had run the company virtually to the ground.

The story of Tema Shipyard and Drydock is a classic example of local business going under in the hands of so-called foreign imports.

Last week, I highlighted my concern about the contractual agreement under which Telenor bosses will be paid four percent of gross profit (before interest and tax) and heard Communication Minister pontificating about the ability of Telenor to turn Ghana Telecom into an international telecommunication conglomerate. He talked about rewards and punishment enshrined in the contract to ensure efficiency.

I have very serious problems with the two clauses. Under Clause 2, sub-section One of the appendix, ‘a success fee shall be payable to TMP (Telenor) when performance exceeds targets for the key Performance Indicators provided in the Business Plan by at least 10 percent in any financial year.”

I must confess, I have not seen the Business Plan. But my understanding of this clause is that for every given year that Telenor will be in charge of running Ghana Telecom, if the profit margin rises above 10 percent of the indicators cited, the Norwegians will be entitled to bonuses outside the four percent fees or $150,000. I will like to believe the rationale behind this clause is that the performance would aid the growth of Ghana Telecom. In this particular clause, there is no reference to circumstances that would aid their ability to do well.

There is no mention of the assistance by Ghanaian staff or any other factor. That is why I am fuming at the clause prescribing punishment in case of Telenor’s inability to perform. “A default payment shall be payable by TMP (Telenor) when performance falls below the targets for key performance indicators provided in the Business Plan by at least 10 percent in any one financial year, EXCEPT (caps mine) where it is demonstrated that lack of performance was not due to the control of management.”

I cannot understand why the punishment clause has an escape route for the Telenor fat cats. Are the drafters of the agreement suggesting that where Telenor could make a case that the Ghanaian workers failed to perform, the Norwegians could escape punishment? If the Norwegians could not be punished for lack of production induced by factors beyond their control, why could they not be denied their bonuses for profit that accrued not necessarily from their expertise? For instance, in a given year that Ghanaian workers at Ghana Telecom work so hard as to earn profit for the company, why would the reward go to the Norwegians? I smell a rat. Someone should tell this nation something. Has someone got an interest in the wording of this contract?

I am becoming alarmed at the way officialdom aid foreigners to milk this country dry and I am afraid I am not making any exception in this case. I have heard the minister say on his radio and television rendition events leading to the coming in of the men from the cold that his sole motivation factor is the good of Ghana. I get the impression that people in authority think they love Ghana more than those of us who are not in government. But I can assure the minister that there are Ghanaian patriots out there who are appalled by the way officials dole out resources of this country. From the time of independence till now, stories abound of officials taking advantage of their positions to milk this nation.

I am not happy with the Telenor arrangement and I think I have advanced enough arguments to conclude that it is not the very best deal under the circumstances. It is only fair that Government suspends its implementation until the right things have been done.

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Views expressed by the author(s) do not necessarily reflect those of Ghanaweb.

Columnist: Press
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