Ghana Gas has no agreement with Sinopec for construction of office complex
The Ghana National Gas Company (Ghana Gas) has denied entering into any contractual agreement to build a $39 million office complex.
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According to the Chief Executive Officer (CEO) of the company, Dr George Sipa-Adjah Yankey, Ghana Gas is yet to enter into an agreement with Sinopec International Petroleum Service Corporation for the construction of its 6,300m2, and not 6000m2, office complex.
Reacting to media reports in an interview with the Daily Graphic, Dr Yankey explained that it was a draft proposal that had long been rejected by Ghana Gas, adding that a new proposal was drawn up in October for study.
He pointed out that the proposal, which was mislabeled as an agreement by sections of the media, was not a contract.
Dr Yankey said the company had just begun the process to ensure that it got value for money on its plan to build a six-storey office complex from an initial single-storey office complex.
He said the company had not finalised even the process of vetting the proposal for it to be signed.
“Until it is approved by the board, it remains a proposal,” he pointed out.
Background
There are reports of an approved contract between Ghana Gas and Sinopec International Petroleum Service Corporation which suggest that the cost of the office complex had been increased from an estimated $7.5 million to more than $45 million.
An Accra based Fm station, quoted a commercial proposal dated August 15, 2014, submitted by Sinopec to Ghana Gas in which the cost of the building was increased from $7,510,000 to $38,987,668.
It reported of a change order submitted to Ghana Gas by Sinopec, dated August 28, 2014, allegedly confirming a contract on the proposal submitted to Ghana Gas.
Denial
However, Dr Yankey said the Fm station relied on the outdated proposal made in August, which it said was a contract.
“The use of the word, “agreement”, was an abuse of the word. What they had was not a contract but a rejected, outdated proposal they ignorantly interpreted as a contract,” he said.
According to Dr Yankey , the initial agreement for the construction of the office complex covered a 1,600m2 office space, which was inadequate for future operations, considering the current staff strength of 250 persons and potential increase to more than 500 upon completion of the Natural Gas Liquids (NGLs) second phase of the Ghana Gas project.
He said the initial proposal for the construction of a one-storey 1,600m2 office complex was valued at $7.5 million.
According to Dr Yankey, it had since been revised to a six-storey 6,300m2 office space and not 6,000m2, as reported.
Besides, he said, the cost of the project had been negotiated downward to $34 million and not $39 million.
Office space
He said the revision to a six-storey complex was, among other objectives, to provide enough office accommodation for Ghana Gas’ present and future expansion needs.
He said the World Bank office complex, which was used as a comparison and cost $30 million, was a four-storey building and not a six-storey facility like the proposed Ghana Gas building.
Dr Yankey said while critics could say there was a potential increase in cost by 500 per cent, the floor space had increased to about 600 per cent as well.