Documents have started emerging about the decision which led to the termination of the Emergency Power Agreement with GCGP Limited, leading to the US$134 million judgment debt that was slapped on Ghanaians over the cancellation.
The International Court of Arbitration in its ruling on the matter, also said the judgment debt came with a US$30 million interest payment obligation, bringing the total judgment debt to a whopping US$164 million for the payment by a country, which is seeking to borrow a US$120 million for the management of COVID-19 pandemic.
Same country, had borrowed and spent US$100 million over the same pandemic from the World Bank.
But a document signed by the sacked Minister of Energy, Boakye Agyarko, has revealed that he did not consult the then Minister of Justice and Attorney General, Gloria Akuffo, before terminating the agreement leading to the huge judgment debt.
A letter dated February 13, 2018, showed that the Attorney-General, did not have input in the decision taken mainly between the Ministry of Energy and the Energy Commission.
A portion of the letter reads that ”I refer to the emergency power agreement (Agreement) executed on June 3, 2015, between GPGC Limited (GPGC) and the Government of Ghana represented by the erstwhile Ministry of Power, for the provision of fast-track 107 MW (ISO) installed capacity of power including the provision of operation, maintenance and technical services, the construction of a transmission line named auto transformer and the financing and insurance of the plant for a period of (4) years (Project).
Interestingly, the same country aside the US$164 million from GCGP, is also facing a US$55 million judgment debt over the termination of Accra Intelligent Traffic Management contract for the management of the Beijing Everyway Traffic and Lighting Technology Company Limited to drag Ghana to the London court of international arbitration.
This also comes, while Ghana Community Network System (GCNet) is also preparing to file a US$100 million lawsuit against the government of Ghana over the termination of its operation as a destination inspection company and handing the same over to UNIPASS.
If the US$155 million – GCTNET and Beijing Everyway, is successful, it will mean Ghana is paying US$319 million in judgment debt alone.
Mr Agyarko’s letter entitled ‘ ”re: emergency power purchase agreement between the government of Ghana and GPGC limited termination notice”, addressed to the managing director of GPGC Limited at Puma Energy, 7th Floor Airport Square Building adjacent Holiday Inn, Accra.
He did not copy the Attorney General, but Deputy Ministers at the Energy Ministry, Dr. Mohammed Amin Adam and William Owuraku Aidoo.
Also copied is Chief Director of the Energy Ministry at the time.
Mr Boakye, had stated that ”as you well know, this Agreement was executed during the power crisis as an Emergency Power Project. The term of the Agreement commences from the Signature Date until forty-eight (48) days after Full Commercial Operation Date”.
The then Minister of Energy noted that ”in accordance with the terms and conditions of the Agreement, the Agreement should have become effective on the 3rd August 2015 except the parties mutually extended the period for the fulfillment of the conditions Precedent to the effectiveness of the Agreement”.
He explained that ”following a review of the agreement Project, we note, the Parties have not mutually extended the period for the fulfillment of the Conditions Precedent”.
”We also note that, to date, GPGP has not reached financial close nor achieved Full Commercial Operation Date primarily because some of the pre-conditions (Conditions Subsequent) for the achievement of financial close and full commercial Operation Date have not been fulfilled, under the Agreement, Conditions Subsequent are to be fulfilled (30) days after the Effective Date”.
He cited Section 11 of the Energy Commission Act 1997, (Act 541) saying it ”also provides that “Except as expressly exempted under this Act, a person shall not, unless authorized to do so by a license granted under this Act engage in the business or commercial activity for (a) the transmission, whole sole supply, distribution or sale of electricity or natural gas”
”The Ministry has been informed by the Energy Commission that GPGC has still not obtained a licence from the Commission to engage in the business or commercial activity for the sale of electricity. GPGC therefore has no capacity to execute the EPA. Accordingly, the EPA is null and void for want of capacity”.
”Similarly, although it is a requirement to obtain Siting and Construction Permits from the Commission prior to construction and installation of a plant for the production and supply of energy, GPGC has commenced construction on the site without requisite Siting and Construction Permit. Accordingly, GPGC’s construction activities are illegal”.
”In view of the above, the Government of Ghana has taken a decision to terminate the Agreement effective the date of this letter due to GPGC’s breach of obligations under the Agreement”, he added.
It concluded that ”Kindly take note of Section 4(g) of the Agreement which provides that, “GoG may terminate this Agreement with immediate effect, by given written notice to GPGC if any Condition Subsequent has not been satisfied by GPGC or waived by GoG by the date falling thirty (30) days after the Effective Date (as such date may be extended by the mutual agreement of the Parties) provided that such non-fulfillment of the Conditions Subsequent by GPGC must be wholly attributable to the action or inaction of GPGC, and , if , on the date of termination any Condition Subsequent has not been satisfied by GPGC as a result for reasons attributable to GPGC, GPGC shall pay GoG the early termination Payment and other reasonable costs incurred by GoG within ninety (90) days of the issued, by GoG, of a termination notice”.
Meanwhile, a former deputy Power Minister, John Jinapor, believes someone above the ministers of Roads, Finance or National Security, should be held responsible for the possible judgment debt over the Accra Intelligent Traffic Management contract.
Speaking on The Point of View, he shied away from mentioning names but said: “a higher authority than these ministers should take the ultimate responsibility.”
Management of the Beijing Everyway Traffic and Lighting Technology Company Limited has dragged Ghana to the London court of international arbitration. This follows the cancellation of the Accra Intelligent Traffic Management contract which was earlier awarded to the company.
The company was contracted in 2018 to implement the project worth $100 million after Parliament’s approval.
But in November 2020, the Bill was re-laid before Parliament with a contract agreement between Ghana, Huawei Technologies Company Limited and the China National Import and Export Corporation.
Though the case has not been resolved, Mr. Jinapor does not think Ghana will come out successful.
“I wish Ghana all the best but clearly if you look at what transpired, we should prepare for another massive one.”
He was also commenting on the $134 million judgement debt Ghana was slapped with over the cancellation of its Emergency Power Agreement with GCGP Limited.
The International Court of Arbitration in its ruling on the matter also said the judgement debt came with a $30 million interest payment obligation.
Mr Jinapor lamented the inability of the government to exercise restraint on these deals.
He questioned why the government didn’t pursue dialogue before cancelling the respective deals.
“Why can’t we negotiate when we want to terminate. At least pursue that option first. Negotiate and see if you can come to an amicable solution.”
“If negotiation fails, and you are pursuing the other option, that makes a bit of sense but why this rush to terminate only to go to the international court of arbitration and pay huge sums of money. This is unfair,” he added.