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GIDA Clarifies $12 Million Payment; Says Contractor met Contractual Obligations

In a press release on May 28, 2024, GIDA explained that the $12 million payment was part of the contractual agreement, which stipulated that POWERCHINA would receive a total of $48.5 million as a mobilization fee upon providing advance payment guarantee from a reputable bank.

The Ghana Irrigation Development Authority (GIDA) has justified the $12 million payment to the contractor for the Pwalugu Multipurpose Irrigation Dam project.

In a press release on May 28, 2024, GIDA explained that the $12 million payment was part of the contractual agreement, which stipulated that POWERCHINA would receive a total of $48.5 million as a mobilization fee upon providing advance payment guarantee from a reputable bank.

GIDA additionally disputed that the government was never exposed to risk by approving the payment, and contrary to claims of no work being done, the contractor has delivered preconstruction documents and commenced physical works, including camp and access road construction.

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“Contrary to the claim that no work has been done, the contractor has delivered both preconstruction documents and some physical works (camp and access roads)” a part of the statement read.

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GIDA explained that the contract terms were fully adhered to once the contractor secured an advance payment guarantee from Stanbic Bank.

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“Following the receipt of the advance payment guarantee with a face value of USD 60,713,612.11 from the contractor’s bankers (Stanbic Bank), an amount of USD 11,949,088.06 (25% of the total advance mobilisation required ) was paid in three tranches,” the statement emphasised

The statement added that the government agreed to pay $48.6 million (12% of the total contract sum) as mobilization fees to the contractor.

“Under the contract, the Government was expected to pay USD 48,570,889.69 million (which constitutes 12% of the total contract sum of USD 404,757,414.06) as mobilisation to the contractor subject to the provision of an advance payment guarantee from a reputable bank,” a part of the statement read.

The minority members of the Parliamentary Works and Housing Committee have questioned the payment after conducting an on-site inspection last week to monitor the project’s development.

The NDC MPs expressed disappointment after observing that the contractor had apparently sold project materials and vacated the site, leaving the project stalled.

The MP for Bongo, Edward Bawa demanded the prosecution of all individuals involved in approving the $12 million payment when he spoke to the media.

But GIDA insists that no crime has been committed whatsoever.

“no frivolous payments have been made and the USD11.9 million paid to the contractor was fully covered by a Bank Guarantee valued at USD60.7 million. All payments made were for specific activities executed under contract,” the statement added.

Also, according to the Ranking Member of the Mines and Energy Committee in Parliament, John Abdulai Jinapor, the next NDC government is committed to ensuring accountability for anyone involved in wrongdoing related to this issue.

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