Public Procurement Authority warns against cancellation of port projects

The Public Procurement Authority (PPA) has cautioned that the cancellation of a concession agreement granted Messers Ibistek Ghana Limited by the Ghana Ports and Harbours Authority (GPHA), will have severe legal consequences to the state.

The PPA has, therefore, advised the Ministry of Finance (MoF) to write to the World Bank to explain the situation to avert any dire consequences on the state.

According to the Chief Executive Officer (CEO) of the PPA, Mr Adjenim Boateng Adjei, parties to the agreement acted in accordance to the laws, procedures and systems which the World Bank itself has supported Ghana over the years to establish.

His advice follows a letter by the Finance Minister, Mr Ken Ofori-Atta, to the GPHA directing that the $370 million concession agreement granted to Ibistek Ghana for the development of a multi-purpose container terminal at the Takoradi Port in the Western Region be suspended.

The Finance Minister had, in a letter dated December 29, 2017, instructed the GPHA to suspend the contract and reopen a competitive procurement process in respect to the said project.

“You are hereby directed to suspend any prior concession agreements to undertake the above-mentioned project without any cost to GPHA and government and report same to this office,” the letter stated.

But the PPA in its letter maintains that there was no existing agreement between the GPHA and Ibistek for the termination of the contract.

At the time of the award of the concession to Ibistek, the GPHA was said to have validly terminated the Private, Public Partnership processes (PPP) that earlier existed in relation to the project.

“I wish, therefore, to advise that the Ministry of Finance should write to explain to the Word Bank that the parties in this matter acted in accordance to the laws, procedures and systems which the bank has supported the state over the years to establish,” Mr Adjei indicated in a letter sighted by the Daily Graphic.

Due Process

Mr Adjei averred in a letter dated January 5, 2018 to the Minister that the process of awarding the contract under section 40 sub-section 2 of Act 914 and the process of awarding the contract as a single source procurement were legitimate and in accordance with the law.

“I wish to reiterate this position in reference to a response by the PPA to concerns raised by the World Bank on this matter in a letter dated September 15, 2017, in which the PPA made it clear to the bank that there was no illegality nor circumvention of the processes,” the CEO stated in the letter.

Concession

The GPHA in August 2017 signed a 25-year concession agreement with Ibistek Ghana Limited for the development of 61 hectare Container and Multi-Purpose terminal to handle one million 20-footer equivalent units (TEUs) of containers at the Takoradi Port and three million tonnes of general cargo per annum.

Under the agreement, the facility, which would serve as a convergence point to receive imports and transhipment cargo, was also to serve as a one-stop shop for all container procedures at the Takoradi Port.

Ibistek as the concessionaire is responsible for the full funding of the project, from the construction of basic infrastructure to utility systems, procurement and installation of cargo handling cranes and equipment to the operation of the terminal.

The project with funding from the African Development Bank (AfDB) according to the contract information, had proposed to in addition develop a container quay of 16-metre draft capable of accommodating bigger vessels and further make the Takoradi Port to become a long-term competitive alternative to the Port of Tema.

These processes were completed after a series of communications between the GPHA and the PPA and a subsequent publication of public notices in the September 11, 2017 edition of the Ghanaian Times in compliance with the directive of PPA to the GPHA on the procurement processes.

Construction work

Presently, work on the link roads from the Takoradi Port to the Paa Grant roundabout through New Takoradi, which is being financed by Ibistek as part of conditions of the project, is about 40 per cent completed.

Similarly, the relocation of the Oil Jetty from its present location to a new position near the Dry Bulk Jetty is presently underway to pave the way for dredging and reclamation works to begin.