Tamale-Savelugu-Walewale road: Minister accuses Indian contractor of taking $29.6million and abandoning project

The Minister of Roads and Highways, Governs Kwame Agbodza, has referred an Indian construction firm, JMC Projects, to the Attorney-General and the Minister of Justice for taking $29.6 million and failing to execute construction works on the Tamale-Savelugu-Walewale road.

He said in spite of being paid the $29.6 million, 20 per cent of the total $158 contract sum, the company had only done one per cent of the first phase of the upgrading of the 113 km project, which spans from Savelugu to Walewale.

He said after taking the mobilisation fund, the company attempted to change its name to Kalpatura Projects.

The project commenced in June 2022 and was expected to be completed in December 2025.

Issue of termination 

Appearing in Parliament on Thursday to respond to an urgent question by the Majority Leader on the status of design-build contract of the Tamale-Savelugu-Walewale stretch, Mr Agbodza expressed dismay at how the Indian contractor also attempted to collect an additional $14 million for allegedly mobilising equipment and staff to site but government refused to pay that amount.

“The Indian construction firm later issued a notice of termination of contract on March 11, 2024 and attempted to clandestinely transport its construction equipment at the project site in northern Ghana to another project site in Guinea without the explicit consent of the Ministry of Roads and Highways,” he said.

Notice of termination 

Asked why he had abandoned the contract, the minister said the contractor said due to the debt restructuring, the project could not go on. 

He that that was after he had successfully drawn down almost $30 million after former Vice President, Dr Mahamudu Bawumia, had cut the sod for the commencement of the project on June 17, 2024. 

The minister said on June 17, 2024, the former Vice President assured the country that the project was going to resume after the completion of the debt restructuring, not knowing that on March 11 the contractor had already served notice of termination.

“So, the Vice President then did not even know that the contractor had already served notice to terminate the project in March and he was promising in June that the work would be resumed.

Mr Agbodza said this took place at a time Ghana owed contractors more than GH¢20 billion, saying that “So, for us to be able to find $30 million and pay a contractor, and he did absolutely no work is worrying”. 

“This contractor will be asked to either do the work up to $30 million or we make the necessary recommendations for actions to be taken within our country,” the minister warned.

Legal action 

The Minister said at the time the contractor issued the notice of termination of contract in March 2024, it had done only one per cent of the work.

However, he said he was of the firm conviction that the Indian construction firm either execute the road project worth the amount collected or government of Ghana would use every legal means to retrieve the money paid to the contractor.

The Minister expressed surprise that while the previous New Patriotic Party government was owing Ghanaian road contractors to the tune of GH¢21 billion, it could mobilise almost $30 million to pay a foreign road contractor without any work done.

The contract, worth $158 million, was awarded in 2022 and was expected to be completed within 42 months in December 2025 but at the moment the contractor has abandoned site.