Economist kicks against 80% sale of TOR asset

An Economist, Dr. Mark Assibey-Yeboah, has kicked against the granting of a waiver of import duties, import VAT and NHIL, ECOWAS Levy, EDAIF, Inspection fees, Corporate Taxes, Withholding taxes and other applicable imposts worth US$46million on the operations of a mooring facility belonging to the Tema Oil Refinery.

The renowned Economist fears the Government of Ghana will divert the mooring facility to a private entity as soon as the tax waiver is granted, a situation he noted, will not inure to the benefit of the West African nation.

The Government of Ghana intends offloading about 80% shares of TOR’s mooring system to a private entity, claiming that the state owned oil refinery does not have the expertise to operate the facility.

But the Economist said there is no need to divert the shares of the state owned facility since TOR is a profitable venture and must be allowed to operate the facility without enjoying any tax waiver.

According to him, if TOR does not have the expertise to operate the simple mooring facility, it could outsource it to the Ghana Ports and Harbors Authority (GPHA) to do so.

“Mr. Speaker, TOR is inheriting the mooring facility at no cost. Refigure built the mooring facility from scratch. It was a built, operate and transfer arrangement. TOR said it seeks to raise fund through the sale of equity in the mooring facility. But the valuation of the concession now is about US$100million. That is what TOR has inherited. The argument that has been put forward is that should the tax waiver be granted, then it will increase the valuation of the mooring facility to about US$130million. So, there are two ways of looking at it – whether you don’t grant the tax waiver and the valuation stands of the concession stands at about US$100million or you grant the tax waiver and the valuation goes to about US$130million.”

“The mooring facility is a simple machine to operate. We are told that TOR does not have the expertise to operate it. If TOR cannot operate this facility, they must as well outsource it to GPHA. This is a simple jetty that is being used to transfer oil from tankers onshore and I don’t see the complexity operating this facility,” he noted.

Dr. Assibey-Yeboah who is also the MP for New Juabeng South, made this observation on Wednesday when contributing to the discussion for the adoption of the Report of the Finance Committee on the request for waiver of import duties, import VAT and NHIL, ECOWAS levy, EDAIF, Inspection fees, corporate taxes, withholding taxes and other applicable imposts for the Ghana Petroleum Mooring systems Limited (GPMS) on goods and services to be procured in respect of GPMS’s design and build contractor for the new single point mooring (SPM), the operations and maintenance contractor and or their respective sub-contractors under the operation, maintenance and expansion of the Tema Offshore Mooring System.

Commenting further on the facility, he said the Ghana Revenue Authority did not provide sufficient information provided to the House to enable Members make proper assessment of the tax exemption being sourced.

“Mr. Speaker, TOR inherited this mooring facility at no cost. It is valued at US$100million. So, why this rush to grant about US$50million tax exemption to TOR? I am opposed to this. My feeling is that following the approval of this tax waiver, it is going to be offloaded to some private entity and I don’t think Ghana stands to gain. Let TOR operate this facility Refigure did for 10 years. It is a simple operating machine. They can do it and does not deserve the tax waiver. We should not grant this,” he added.