PPA cautions Finance Ministry

The Public Procurement Authority (PPA) has advised the ministry of finance to write to the World Bank that the cancellation of a concession agreement granted Messrs Ibistek Ghana Limited by the Ghana Ports and Harbours Authority (GPHA), would have severe legal consequences to the state.

According to the Chief Executive Officer (CEO) of the PPA, Adjenim Boateng Adjei, parties to the agreement acted in accordance with the laws, procedures and systems which the World Bank itself has supported Ghana over the years to establish.

His advice followed a letter by the Finance Minister, Ken Ofori-Atta, to the Ghana Ports and Harbours Authority (GPHA) directing for the $370 million concession agreement granted to Ibistek Ghana for the development of a multi-purpose container terminal at the Takoradi Port in the Western Region to be suspended.

The Finance Minister had in a letter dated December 29, 2017, instructed the GPHA to suspend the contract and reopen a competitive procurement process in respect of the said project.

“You are hereby directed to suspend any prior concession agreements to undertake the above-mentioned project without any cost to the GPHA and the government and report same to this office,” the minister’s letter stated.

But in its letter, the PPA maintained the view that there was no existing agreement between the GPHA and Ibistek for the termination of the contract.

At the time of the award of the concession to Ibistek, GPHA was said to have validly terminated the Private-Public Partnership (PPP) processes that earlier existed in relation to the project.

“I wish therefore, to advise that the ministry of finance should write to explain to the Word Bank that the parties in this matter acted in accordance with the laws, procedures and systems which the Bank has supported the state over the years to establish,” Mr Adjei indicated in a letter cited by DAILY GUIDE.

Due Process

In a letter dated January 5, 2018, to the minister, Mr Adjei averred that the processes of awarding the contract under Section 40 Sub-section 2 of Act 914, were legitimate and in accordance with the law.

“I wish to reiterate this position in reference to a response by the PPA to concerns raised by the World Bank on this matter in a letter dated September 15, 2017, in which the PPA made it clear to the bank that there was no illegality nor circumvention of the processes,” the CEO stated.

Concession

In August 2017, the GPHA signed a 25-year concession agreement with Ibistek Ghana Limited for the development of a 61-hectare container and multi-purpose terminal to handle one million 20-footer equivalent units (TEUs) of containers at the Takoradi Port and three million tonnes of general cargo per annum.

Under the agreement, the facility, which would serve as a convergence point to receive imports and transshipment cargo, was also to serve as a one-stop-shop for all container procedures at the Takoradi Port.

Ibistek, as the concessionaire, is responsible for the full funding of the project – from the construction of basic infrastructure to utility systems, procurement, installation of cargo handling cranes and equipment as well as the operation of the terminal.

The project, with funding from the African Development Bank (AfDB), according to the contract information, had proposed in addition, to develop a container quay of 16-metre draft capable of accommodating bigger vessels and further make the Takoradi Port to become a long term competitive alternative to the Port of Tema.

These processes were completed after a series of communications between the GPHA and the PPA and a subsequent publication of public notices in the September 11, 2017 edition of the Ghanaian Times in compliance with the directive of PPA to the GPHA on the procurement processes.