Inflated costs awarded to Queiroz Galvao Folks, about a week or two ago, Nana Akufo Addo stated in a lecture on occasion of the Second Aliu Mahama lectures that the Kasoa Interchange is over-inflated. A little investigation carried out and put together by some technical people in the ministry shows that not only is the Kasoa Interchange project inflated, but also all the other contracts under construction by the contractor, Queiroz Galvao, including the Kwame Nkrumah Circle Interchange. Queiroz Galvao Construcao is an energy and construction firm, which has won the heart of the Mahama-led NDC government with juicy but shady contracts since 2013. Loan Approvals for Queiroz Galvao Parliament at an emergency sitting on October 1, 2014 approved several loan facilities including $172 million for the construction of the Kwame Nkrumah Interchange, which is aimed at easing congestion at the Nkrumah circle. That was the 5th major project loan and contract approved for Queiroz Galvao at a total amount of US$714 million. These include: Kwame Nkrumah Interchange - $100m – Approved May 2013 Tamale Airport - US$100 million – Approved May 2013 Additional Kwame Nkrumah Interchange $172m - Oct. 2014 Ring Road & Nkrumah Interchange Roads $170m – Oct. 2013 Kasoa Interchange project is at $172.6 million – Approved Oct. 2014 So the total cost of the works at the Kwame Nkrumah Interchange work alone is now $442 million, including $172 million meant for so-called additional work around the Ring roads and interchange areas. Do our MPs know that they approved three loans totaling almost $442 million for Queiroz Galvao at the circle area alone? This is in addition to the Kasoa and Tamale airport projects which amount to $272 million. Queiroz Galvao was also awarded contracts to implement some roads in the Burma Camp and Cantonment areas and also construct the controversial Air force Hanger project at Airport. The Kumasi central market project is also in the pipeline for construction by Queiroz Galvao. Does Queiroz Galvao have the capacity to undertake all five contracts? All the contracts were secured through sole sourcing, approved the Public Procurement Authority, and the Government waived all duties, taxes and levies on the contracts. Additionally, the Government paid the political risk insurance on the works, the Kasoa interchange portion alone was $12 million and President Mahama’s Government paid this money upfront, against all norms. Its the same Circle equipment they are moving to Kasoa and all under insurance so why should Government pay another road of insurance for each of these contracts? Can Parliament publish details of the contract and loan agreement? The Government need not sole-source the contract even if the facility was coming from Brazilian Government. At worst, the contract could have been restricted to Brazilian firms – there are a number of them in Ghana – OAS on the Prampram Housing (Saglemi) $250million, Odebrecht $500 million western Railway, etc, all signed by this Govt. Mahama’s love for Brazilian Companies Mahama’s love for Brazil dates back to the period before his Presidency. According to Martin Amidu, in 2011, then President Mills caused an investigation to be carried on his deputy for increasing the price of Embraer 190 executive jet to serve as a “Strategic Airlift Aircraft” for the Ghana Air Force to $55 million when the price was $28.5 million. The deal also involved a request for the option of configurations to convert the luxury jet into a military aircraft, bringing the total amount to $88 million, including a $17 million hanger. Austerity Measures At a time the country was going through austerity measures and when majority of Ghanaians are suffering, statutory expenditures unpaid and Ghana’s Missions abroad are totally broke, the Government of the NDC is approving several loans most of them to a single company, and sole-sourcing is now the order of the day by the National Procurement Authority. Salaries of staff of the various embassies are not regular, with some receiving their wages piecemeal, and some Embassy buildings going up on sale. Moratorium on new projects In 2013, as a result of emerging fiscal challenges, the President was forced put a moratorium on all new projects. At the time the Government put a freeze on major road projects, President Mahama and his cronies were quietly approving huge loans at inflated prices at the expense of the state. Dr. Kwesi Botchwey, a former Minister of Finance and Economic Planning and member of the Economic Advisory Council quickly advised government to stick to its “no new project” policy in the 2013 budget. He said that was the only way to ensure fiscal discipline and stabilize the country’s economy. Dr. Botchwey said there was no substitute for discipline in public investment programmes and underscored the need for the country to live within its means. Unfortunately, the President ignored none of that and went against its own policy of “no new projects” touting that he will take more loans. More loans Last year, the President also blackmailed his Finance Minister to guarantee a loan of $250 million to OAS to build 5,000 low-cost houses at Prampram, at $50,000 per house. However, the actual houses that will be built are 1,502 according to contractor and ministry officials. The rest of the money has gone into individual pockets. Last week, in a GTV telecast message by video posted by Works and Housing Minister Hon. Collins Dauda, he conceded that the number of houses will reduce and the funds will be used as revolving fund. How could President Mahama announce that 5,000 houses will be built during the short-cutting and the number suddenly changes to 1,502? Parliament and Ghanaians have been deceived. If we are lying, they should verify from the contractor and Ministry, as well as Presidents address. The President also blackmailed Finance Minister Mr. Seth Tekper to guarantee a loan of $150 million for Messrs. Ital Construct in early 2014 to construct houses, also with tax reliefs. That was the time he said people want his sack Terkper. How could one company be given such a large amount of money while GREDA members who build the bulk of houses in the market are given nothing? It is clear the loan craze is not going to stop soon since the president has already said repeatedly that despite the precarious condition of the Ghanaian economy, they will take more loans. The MPs had less than 24 hours to go through the October 1 2014 loan agreements and they were quickly passed even when the Minority leader and his deputy tried to put breaks on it. They had been recalled to parliament ostensibly to approve the Appointments Committee’s report on Dr. Spio Garbrah but the MP were surprised with with several loan agreements, and they got them passed in 24 hours. A revised version of the China CBD loan was also given to the parliamentarians and expected to be passed during the next session of Parliament, in the range of $1.5 Billion. Parliamentary Oversight Parliament cannot do much because some of them have been corrupted, as some committee members are given amounts of money before they approved the loan. Ghana’s parliament is increasingly becoming one of the weakest links to Ghana’s democracy as they are said to have allowed most of these dubious contracts to go through. Someone said on the eve of passage of some of these loans, National Security quietly sneaks into the homes of some members of the Finance Committee and deliver brown envelops. That notwithstanding, the Minority Leader Hon. Osei Kyei Mensah Bonsu and his deputy Hon. Dominic Nitiwul have all at separate occasions criticized the loans and especially the manner they were approved. But it is not only the responsibility of the MPs to review the design and check whether the prices are satisfactory or not. It is the responsibility of the civil servants in the Ministry to do diligent work before sending the estimates to parliament. These professionals have performed under political pressures, to say the least. A week ago, an NPP MP said he reviewed the designs and they were $1 million per kilometer, so they are OK. T his is impossible because a large part of the works involve steel works, and foundation structures according to our sources. Moreover, that MP admitted the designs were not completed. What are the unit costs? Rising costs of construction and corruption Observers are not surprised about the rise in cost of construction of road projects. The contract amounts for the works by Queiroz Galvao as compared to the cost of the 14 km N1 highway that has two interchanges and constructed at US$110 million. In 2009, school blocks that were constructed at GHc80,000 suddenly rose to GHC300,000. Between 2010 and 2013, on three occasions, Government raised CEDI bonds ostensibly to pay for the gang of four project, namely, (Achimota Ofankor, Tetteh Quarshie Madina, Sofo Line Interchange, and Dansoman roads) but as of December 2014, after raising almost GHC900 Million, only the Achimota Ofankor is fully completed. We need investigations At the time the Government has placed a moratorium on new loans, President Mahama is busily contracting more loans and inflating them for his friends. Just when the Government was quickly preparing to go from second round of IMF talks, these loans were pushed through Parliament. No Government sponsored Value for Money audit. There is more to it than meets the eye and parliament and the IMF must investigate as soon as possible. There is the need for thorough investigations for these contracts. Yesterday, during the NDC Congress in Kumasi, the President said the construction of the Kwame Nkrumah Circle Interchange has become a tourist attraction in the capital. But Mr. President, Why are they so expensive? Are they best value works that Ghanaians can get? This is at a huge cost that must be investigated and I wish Ghanaians should get to the streets to demand answer
Posted on: Mon, 22 Dec 2014 10:29:45 +0000
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