Sale Of Tema Shipyard -- Ghana's Shame

The Cabinet decision of President Mills' government on 10th May, 2012 to buy back Ghana's sixty per cent shares from the Malaysian company who bought Tema Shipyard and Drydock in 1996, should mark the beginning of the end to Ghana's shame and ridicule in the maritime industry.

The history of the Shipyard, which was first put up for sale in 1991 and placed on the divestiture list for almost six years before the then President, Rawlings approved its sale on15th August, 1996 has been a sad and troubling one.

Analysts and experts have concluded that the thirteen years of management as a majority shareholder by Penang Shipbuilding and Construction Sdn. Bhd, a subsidiary of Business Focus Resources Sdn. Bhd, were the worst years in the history of the once reputable shipping and Drydock Company of Ghana.

Tema Shipyard and Drydock Corporation were incorporated on 14th December, 1970 under Legislative Instrument (L.I) 676 after construction started in 1964. In spite of the huge challenges of state owned enterprises, by 1994 the Shipyard had a positive turnover and net profit and huge assets including industrial land, buildings, plant and machinery, furniture and equipment etc.

How the NDC government decided to place the Shipyard on the list for sale and to the Malaysians for $4.5 million dollars for the 60 per cent shares and allowed them to pay $1.2 million dollars is incredible and worth a full scale enquiry. The amount outstanding was to be paid in three equal installments with interest charged at LIBOR +2 on the said amount. The Malaysians were given the option to buy an additional ten per cent equity out of Ghana's equity at the same price within three years of incorporating the new company.

Business Focus of Malaysia's proposal to continue with ship repair and dry-docking originally carried out by Tema Shipyard, making the corporation a modern and efficient marine engineering complex and establishing a vendor development programme for the marine technology industry, was a big hoax. They started making incredible excuses, especially after the 2000 general elections when power shifted from their friends the NDC to their 'perceived enemies' the NPP, who questioned the sale and the terms.

This was the period the Kufuor New Patriotic Party (NPP) government had raised serious issues with the sale of Ghana Telecom, Ghana Film Corporation and the Tema Export Processing Zone to Malaysians.

Accusing the Kufuor government of persecution, the Malaysians by March 2003 raised the issue of the deregulation by the government of the operational area of the Shipyard as a tax-free zone for a five- year period to enable them become competitive. They also brought up the full formalisation of all documentation in respect of all lands belonging to the divested shipyard which they justified as assisting them to raise funding from additional equity from existing shareholders and to use the land as collateral to borrow.

Seeing through this gargantuan fraud, the workers of the Shipyard began agitation and demanded the abrogation of the sale.

The Tema Shipyard saga which led to legal action to recover over $2.2 million dollars by the Divestiture Committee from Business Focus, the setting up of a Committee of enquiry to determine the extent of financial scam in the company, the seizure of the company's assets and the closure of the premises are all pertinent issues.

But the Billion dollar question is how much the NDC government has agreed to pay for the 60 per cent shares we are taking back from their Malaysian friends. Stay tune for more.