Ghana First Company's reaction to the Clean Ghana Sanitation Project

The management of Ghana First Company Limited has reiterated its commitment towards working in harmony with its contractors to realising the objectives of the Clean Ghana Sanitation Project.

The company stated this in a statement it issued on the contractual arrangement in relation to payments of contract sums between Ghana First Company Limited and its contractors engaged in the construction of toilet facilities in pursuance of the Clean Ghana Sanitation Project.

Meanwhile, the company has initiated a legal action to restrain two defendants, David Abbey and Gloria Oracca Tetteh and their agents from making further defamatory publications about the company.

In a statement of case filed at the Accra High Court on September 3, 2019, in support of a motion on notice for interlocutory injunction, the company prayed the court to restrain the defendants from acting in any manner or conducting themselves anyhow or anywhere either directory or indirectly to unfairly prejudice the fair hearing of the case

Below is a full copy of the company’s statement.

2 September 2019

THE CONTRACTUAL ARRANGEMENT  IN RELATION TO PAYMENTS OF CONTRACT SUMS BETWEEN GHANA FIRST COMPANY LTD AND ITS CONTRACTORS ENGAGED IN THE CONSTRUCTION OF TOILET FACILITIES IN PURSUANCE OF THE CLEAN  GHANA SANITATION PROJECT

Introduction

The aim of this publication is to explain the scope of the contractual arrangement between Ghana First Company Ltd (the “employer”) and its contractors involved in the construction of toilet facilities under the Clean Ghana Sanitation Project.

Presently, Ghana First Company Ltd has contracted with several contractors who are working on their respective toilet facilities and are at various stages of completion. Inspections conducted by the technical team of Ghana First Company Ltd on the various projects under construction reveal that all the projects are below 60% of completion.

The question therefore is, at what stage, is Ghana First Company obliged under the Contract to pay the various contractors?

The Contract Agreement

Both parties ( Ghana First Company Ltd  and the contractor) agree under Clause 5 of the Contract Agreement :

1.  That the description of work to be undertaken by the Contractor shall be as in Clause 3 iii supra
2.  That the time limit for the completion of the project in clause 3 iii supra shall be 90 days from the date of handing over of the proposed site to the Contractor.
3. That the constituent documents for the contract shall be as in Clause 2 supra.
4. That the Contractor agrees that the Contract is a Turn Key Project and that the Contractor shall be paid only upon full completion and hand over of the entire project
5. That the Employer shall pay the Contractor the agreed Contract sum of ……………plus cost of additional works arising out of the contract and duly approved by the Employer’s Project Manager as follows:

1.  The total sum shall be paid to the contractor 3 months after completion of works and certificate of completion upon recommendation by project manager and approval by the Chief Executive Officer.
2. That the sum due the Contractor shall be the Net Contract sum after the withholding of 5% retention of the total sum for defect liability.

A careful reading of the above clause contained in the Contract Agreement reveals that both parties to the contract agree the contract to be a turnkey project and as such, it is only upon final completion and handing over that the contractor will be paid.

The above clause notwithstanding, is there any entitlement to part of the total contract sum by a contractor pending final completion of the project?

The agreement does not vest any contractor with any such entitlement as regards payments pending final completion and handing over of the project.

However, the Employer may upon satisfaction of the work done so far pay 60% of the contract sum payable to the contractor. This is reflected under

Clause 39 of the Conditions of Agreement which provides that:

Without prejudice to Clause 5 v of the contract agreement, the Employer reserves the right to pay part of the total sum amounting to 60%  of the quantum sum after collaborative site visits and inspection is done by the employer, the bankers and the contractor.

The employer therefore, without any doubt reserves the right to uphold this said payment when defects are detected after collaborative site visits and inspection. Payment will therefore be done after these defects are remedied by the contractor.  

Therefore, the payment of the said 60% is not automatic. It is at the discretion of the Employer to decide whether or not it will pay the said 60%. Thus, even upon the collaborative site visits, the Employer can still decide that it will not pay any said sum to any contractor. This is because, the right to pay any part of the contract sum to any of the contractor is solely a right to be exercised by the Employer (Ghana First Company Ltd).

Despite these clear contractual arrangements, the Employer on humanitarian grounds and with the zeal to ensure the successful completion of the project has on numerous occasions advanced  part payments of the total amount to some of the contractors who demonstrate financial need for such amounts.  So far, 104 contractors have benefited from such payments totaling FIVE MILLION, FIVE HUNDRED AND EIGHTEEN THOUSAND, TWO HUNDRED GHANA CEDIS (GH¢5,518,200.00).

Notwithstanding the clear position of the contract between  Employer and its Contractors that the contractors do not have  any entitlements whatsoever  to be paid the said 60% herein stated, it is regrettable that some contractors have misconstrued the provision to be a right reserved in them and in the result are making claims that suggest that the employer has defaulted in making such payments to them.

The Employer threw an open invitation cognizant of its right to the Contractors who claim that  they have completed 60% of the required specifications and have certificates to that effect, signed by the Chief Executive Officer (C.E.O) to submit such certificate to the head office of the company for inspection, verification and due payment within 5 working days from the  22^nd August 2019 but never came. This is a clear vindication of the fact that to date no Contractor has completed 60% of the required specification.

It is however reassuring that some contractors have warmly responded  to the Company’s invitation to submit applications for consideration of financial assistance subject to the Company’s laid down procedures.

Conclusion

Management of Ghana First Company Ltd seeks to reiterate the Company’s commitment towards working in harmony with its contractors to realising the objectives of the Clean Ghana Sanitation Project.

……………………………..

Charles Bentum Esq.

Solicitor for Ghana First Company Ltd.