Ministry of Energy assures Ghanaians of transparency in operations

Accra, June 6, GNA - The Ministry of Energy on Monday assured Ghanaians that activities of the energy sector under the Government has been and would continue to be managed in the spirit of honesty, transparency and accountability.

The assurance was contained in a Rejoinder issued by the Ministry and signed by Mr Emmanuel Armah-Kofi Buah, Deputy Minister of Energy in Accra.

Full text of Rejoinder under the heading "Rejoinder-TAQA pays $1 million a year to Government Officials".

The Ministry of Energy writes this rejoinder in response to the baseless and unfounded allegations of corruption published in an on-line-subscription-only publication named African Energy Intelligence and reproduced by the Statesman newspaper of May 27, 2011 with the above caption.

The article states that court proceedings in the United States instituted by a former employee of TAQA against his employers suggests that payments of US$1 million a year were paid to Ghanaian Government officials in 2009, which the paper says was the year the TAQA sought approval for its expansion works at the Takoradi Thermal Power Station. The Statesman further alleges that the price of the project was inflated in order to derive the payments to Government officials.

The Ministry of Energy considers the publication very malicious, mischievous and calculated at deliberately denigrating the Ministry and its good people. The publications in these media outlets impute corruption and therefore subject the energy sector and the officials within it to public ridicule.

The Ministry of Energy with core responsibility for the formulation and implementation of policy in the entire sector including power has transparent and elaborate procedures for entering into contracts and agreements and therefore wishes to state categorically that there is not any iota of truth in the said publication. 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 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 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. Interestingly it was in 2006 that Mr Peter Baker-Homek was engaged by TAQA as their CEO.

Mr Barker-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.

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) Contractor was prepared in August/September 2010 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 competed 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 the contract is currently not known.

Regarding the specifics of the allegations set forth in the various articles, the Ministry of Energy notes that on their face, the articles contain material inaccuracies. For example they refer to a tripling of the Tico's plant from 110MW to 330MW, but in fact the project seeks to increase the capacity of the plant by 50 per cent, from 220MW to 330MW.

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 any amounts are being or 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 the last three or four years to be paid to Government officials.

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 participated fully which again cuts completely against the allegations contained in the articles.

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 Ministry would therefore wish that the Statesman Newspaper publishes the rejoinder, giving it the same prominence the original story was given in line with good journalistic practice.

The Ministry once again ceases this opportunity to assure Ghanaians that the affairs of the energy sector under the NDC Government has been and would continue to be managed in the spirit of honesty, transparency and accountability as directed by His Excellency the President of the Republic, Prof J.E.A. Mills.