[ 2019-03-01 ]

Aerial view of expansion project

Committee calls for port concession agreement review
The Ministerial Committee set up by the Economic
Management Team to review the concession agreement
between the government of Ghana (GoG) and the
Meridian Port Services (MPS) has made a compelling
case to the government not to implement the
agreement in its current form.

The committee in its report, a copy of which is
available to the Daily Graphic, raised a number of
issues including the fact that the concessionaire,
MPS, did not even participate in the
procurement/bidding process in 2012, when the
government through the Ghana Ports and Harbours
Authority (GPHA) initiated the procurement process
to expand the Tema Port.

According to the report, which was signed by the
Secretary to the Committee, Mr George Ekow Mill,
the GPHA in line with requirements of the Public
Procurement Act, 2003 (Act 663) and in pursuit of
transparency and value for money considerations,
decided to use the international competitive
tender process to procure contractors, financiers
and operators for the expansion project.
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But the management of MPS has rejected calls for a
review of the contract, saying it amounted to,
“interference in investments.”
The Chief Executive Officer of MPS, Mr Mohammed
Samara, said the people making such demands,
“want to disrupt development and
progress.”

Vary terms

Having reviewed the concession agreement in
detail, including the Deed of Agreement (DoA) and
a memorandum of understanding (MoU), among other
documentation, the committee wants the government
to, as a matter of urgency, conduct a re-valuation
of the project and re-work it to give reasonable
and fair returns to all parties.

The re-negotiations, the report stated, should
cover the shareholder’s agreement, the DoA,
financial agreements, tax protocols and the
remodelling of the fair financial implications of
the project.

“If this is not done, the GPHA/GoG will be
unable to service debts, retain staff and sustain
the operations and maintenance of the ports of
Ghana,” the report said.

Deed of Amendment

The report asserted that following the execution
of a MoU, the GPHA engaged the MPS to negotiate
the Deed of Amendment (DoA), after which the GPHA
gave concessionary considerations to MPS based on
the promises and representations the company made
during engagements that led to the signing of the
MoU.

It said the initial cost of the project was
estimated at $1.5 billion, compelling the GPHA to
agree to very low and liberal concession fees on
stevedoring, port dues and zero concession fees on
berth occupancy charge (harbour dues) to ensure
the feasibility and actual execution of the
project.

However, the committee found out that after the
commencement of marine works at the project site,
the cost was reduced to $1.1 billion.

The committee also took cognisance of the fact
that the MPS had enjoyed charitable tax waivers to
the tune of $832 million as of March 2016, a move
the public and civil society organisations had
described as bad.

Review

Calls for the review have intensified following a
concession agreement which grants an exclusivity
rights to the developer, MPS, to charge port dues,
withhold the payment of dividends to the GPHA,
which will now have a diluted share of 15 per cent
of proceeds from the port operations, for the next
10 years.

The latest to add its voice to the calls is the
Ghana Trades Union Congress (TUC), which wants a
review of the concession agreement as well.

Already, a worker retrenchment programme for the
GPHA is scheduled for July. The project, expected
to be operational by June this year, is a joint
venture between MPS and the GPHA.

Source - Daily Graphic

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