Jospong clears the air on termination of $74-million contract

The management of the Jospong Group of Companies, owners of Zoomlion, has explained that the one million bin contract lapsed but was not terminated.

It explained that contrary to the impression created by some media reports that the contract was terminated for non-performance and wrongdoing, the Ministry of Local Government and Rural Development only conveyed an official notification to the company that the contract had elapsed, as per some of its clauses.

Responding to media reports that the government had terminated its contract with the Jospong Group, the company said the publication that the contract was terminated as a result of so-called investigations by a media agency was unfortunate, misleading and sheer mischief.

Response

In a statement signed by the Group Head of Communication of  the Jospong Group of Companies, Mrs Sophia Lissah, the company said as a matter of principle, it was not keen on responding to every issue that was raised in the media but was compelled to comment on the recent publications because of the falsehood being peddled to assuage any discomfort it had created for the company and its stakeholders.

According to the statement, in August 2017 when the same issue was raised by a section of the media, with some erroneous information trying to impute wrongdoing on the part of the company on the same contract, the Jospong Group issued a statement clarifying the details of that contract.

At that time, the media reports created the impression that money had been released by the government for the execution of the project, which was completely false.

In 2017, it said, the company gave detailed information on the status of the contract, which was a ‘Pre-Financing and Credit Sale’ contract, which meant the contractor who won the contract would pre-finance the project, which was to supply 1,000,000 bins and 900,000 pieces of biodegradable bin liners at a total cost of $74 million.

The statement said the contract had a lifespan and payment terms of 24 months, meaning it would naturally lapse after 24 months.

It said some sections of the media were aware of the lifespan and payment terms of 24 months but chose to play heroism by pretending that the contract had been cancelled because of their investigation.

Commended

After some discussions between the Jospong Group and the government, the Ministry of Local Government and Rural Development lauded the waste bin distribution initiative as a major solution towards solving the country’s waste management challenge.

However, the statement said, the government stated that it was financially constrained and might not be able to provide the needed funds to execute the initiative.

“It was based on this that both parties decided not to execute the project. We find it so erroneous that any individual or entity will attribute this to its, one-sided investigation as the reason for the ‘non-performance’. We dare the ‘media organisation’ to produce the letter or document that states that the contract had been ‘cancelled’ due to their investigations,” it said.

It wondered whether it was not intriguing for a section of the media to say that a contract that had elapsed was now cancelled or terminated.

The statement said due to the importance the company attached to the project, it sourced funding through a loan facility of $10 million from Ecobank Ghana Limited to execute it.

Records

Setting the records straight, it explained that the concept of providing the waste bins as part of the solution to Ghana’s environmental sanitation problems was initiated by Zoomlion and its mother company, the Jospong Group.

It said on assumption of office by the new government, the company approached the ministry to discuss the terms of this “one million bin” concept and contract with it, but the ministry, though lauded the initiative, indicated it could not carry it through due to financial constraints, hence the Jospong Group decided to back down on executing the contract.

Making reference to the letter from the Ministry of Local Government and Rural Development, dated November 29, 2018 and signed by the Chief Director that indicated that the contract had lapsed on account of non-performance by the contracting companies, the statement said it was unfortunate and very distasteful that some sections of the media would like to deceive the public with such a false publication.

“As the leading waste management company in the country and Africa, with such vast experience in the provision of integrated waste management solutions, we firmly believe that the acquisition of waste bins by every household and the placement of same in designated public areas hold the key to solving the waste management problem and put Ghana on the path of achieving the President’s vision of making Accra the cleanest city.

“We are, therefore, very focused on delivering on our core business of keeping our communities clean, green and healthy and advise the general public to reject the false publication with the disdain that it deserves,” it said.

Minister

Meanwhile, the Minister of Local Government and Rural Development, Hajia Alima Mahama, has told the Daily Graphic that the government had not lost any money following the cancellation of the $74-million contract awarded to the Jospong Group and its affiliates for the supply of one million litter bins and 900,000 bin liners.

The minister said “the contract was cancelled based on advice from the Attorney-General’s office”.

Asked if the termination of the contract had caused the taxpayer any loss, the minister answered in the negative.