Ameri Power Deal: All You Should Know About The Controversial Contract

Minority Members of Parliament are currently demanding that the activities of the Philip Addison Committee which is reviewing the allegedly overpriced Ameri Power Deal be investigated by the Commission on Human Rights and Administrative Justice (CHRAJ). The NDC parliamentarians are questioning the reason why AMERI should be the one funding the committee’s investigations.

The Minority’s call for probe was incited by recent comments made by the Information Minister, Mr. Mustapha Hamid, in which he admitted that logistics of the committee’s trip to Dubai including their hotel accommodation, airfare, food and other, were funded by the Ameri group.

Recall that the Philip Addison Committee was saddled with the responsibility of providing established facts on the alleged irregularities associated with the Ameri Power Deal, especially that of the cost which stands at a whopping $510 million. Their investigation is meant to provide the government with clear evidences with which to push for a review of the high cost contract.

The Ameri Power Deal is a Build, Own, Operate and Transfer (BOOT) agreement signed between the Africa and Middle East Resources Investment Group (AMERI Energy) and the government of Ghana on the 10th of February, 2015 in the heat of the country’s crippling energy crisis.

The contract was reportedly awarded by then President John Mahama to the UAE-based energy company on a sole sourcing basis after meeting with the Crown Prince of Dubai. The deal specifically involves the installation of 10 General Electric TM 2500 aero-derivative gas turbines at the Aboadze Power enclave, near Takoradi in the Western Region.

The agreement was for Ghana to rent an emergency 300MW from the energy company to help in beefing up the country’s erratic electricity power supply. AMERI was to build the power plants, own and operate them for 5 years (during which it would provide the 300MW), before transferring them to the government of Ghana – all at a total cost of $510 million, payable within the 5-year duration.

After much heated argument between the two opposing sides of the parliament at that time, it seemed like a consensus was finally reached to go ahead with the deal. But grudges soon ensued from then minority NPP as well as other groups and individuals, who claimed among others, that the cost of the contract was bloated.

This was after a Norwegian newspaper report revealed that a Pakistani-born Norwegian, Umar Farooq Zahoor played the role of a middleman in the Ameri power Deal, whose involvement contributed in shooting up the price of the deal. However, all the claims remained of little or no significance until the NDC government was defeated in the December 2016 elections.

Following speculations that the Ameri Power Deal was overpriced by the NDC government, many stakeholders started calling for either a renegotiation of the deal or for a total cancellation. Policy think-thank, IMANI also joined in the insistent calls for renegotiation, pointing out that it will save the country the sum of $24m per annum.

However, the African Centre for Energy Policy (ACEP), has indicated that is virtually impossible to renegotiate or abrogate the deal as both parties had agreed and met the terms and conditions, with the deal already in full operation. Speaking in an interview with Citi News, the Deputy Executive Director at ACEP, Benjamin Boakye, said that a renegotiation or repeal of the contract can only be made possible by the availability of clear evidences of fraud on the part of the company.

Mr. Boakye blamed the past administration for their negligence and carelessness in awarding the contract, as they failed to make all the necessary inquiries into the cost and logistics to ensure their appropriateness before signing the deal.

After the handover of powers from the NDC to the NPP, the new government promised to review some power agreements, including that of AMERI. It was on this note that the newly appointed Energy Minister Boakye Kyeremanten Agyarko, instituted a 17-member committee on February 1, chaired by NPP’s Lawyer Philip Addison. The committee was to investigate the alleged misappropriations being associated with the Ameri Power Deal in order to find evidences for a review of the contract.

On a general note, the committee substantiated that Ghana overpaid Ameri by $150 million. Details of the report as gathered from has it that the Philip Addison Committee noted three major areas shortcoming in the contract which include technical, financial and legal loopholes.

On the financial side, the committee found out that although AMERI secured the deal, the contractor PPR  which acutally built and financed the plant charged $360million yet AMERI forwarded a bill of $510million in the BOOT agreement.

Supporting a claim by NPP MPs that it was misled to approve the deal in parliament, the report said the terms of a financial agreement, a Standby Letter of Credit (SBLC), was “significantly” different from that contained in the Agreement that went to Parliament. A standby letter of credit offers financial protection to AMERI should something go wrong. AMERI can take away $51million even if Ghana has genuine invoice dispute between with the parties, the report also found.

The Philip Addison committee called for a review of tax exemptions to AMERI and its third parties because they are too wide. It said AMERI and other parties do not pay corporate and income tax. The committee also revealed that the penalties charged AMERI for failing to provide power at agreed levels is woefully not punitive enough to encourage AMERI  to deliver on its 330MW mandate. The report found out that Ghana pays $8.5million on a monthly basis irrespective of whether power is delivered or not.

On the legal side, the report noted that the AMERI does not have an licence or permit to operate the plants in Ghana which is contrary to section 11 and 25 of the Energy Commission Act, 1997 (ACT 541). It also discovered that the NDC government did not have any  information on the shareholders and directors of AMERI and other third parties.

The committee therefore recommended that; “Ameri Energy should be invited back to the negotiation table to address and remedy the issues enumerated in this report and for GoG to aim to claw back a substantial portion of the over US$150million commission”. The report recommended that, “in the event that Ameri Energy refuses to come to the negotiation table, GoG should repudiate the Agreement on the grounds of fraud”.

This was the last point of contact on the committee’s investigations until news broke that their activities were being funded by AMERI, the same company they are investigating!

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