By 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 statement on May 28, GIDA stated that the payment was in accordance with the contract terms, which stipulated that the contractor, Messrs Power Construction Corporation of China (POWERCHINA), would receive a total of $11.9 million as a mobilization fee upon fulfilling the requirement to provide “advance payment guarantee from a reputable bank.”
GIDA also explained that the government was at no point, at risk by approving the payment and that “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).”
Members of the Minority in Parliament’s Works and Housing Committee raised concerns about the payment and visited the project site last week to inspect the progress of the work.
They were disappointed to find that the contractor had reportedly sold materials intended for the project and abandoned the site.
The Member of Parliament for Bongo, Edward Bawa, called for the prosecution of all individuals involved in approving the $12 million payment. However, GIDA maintained that “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.”
GIDA insisted and clarified that the contract terms were fully adhered to after the contractor provided an advance payment guarantee from Stanbic Bank.
“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.
“Following the receipt of the advance payment guarantee with 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.”
