Minority in Parliament is demanding a refund of some $2 million paid in 2019 as a premium to acquire ordinary shares for the development of the Accra Sky Train Project.
The Auditor General in its 2021 report described the transaction as a net liability.
This, according to the Auditor-General, was executed through the Ghana Infrastructure Investment Fund’s acquisition of 10 ordinary shares in the Special Purpose Vehicle (SPV), Ai Sky Train Consortium Holdings, valued at the said amount.
Speaking to journalists in Parliament, Minority Chief Whip and Ranking Member on Roads and Transport Committee, Governs Kwame Agbodza demanded that amount is paid back into the government kitty.
He further asked that “When you have a situation where the minister then says in 2023, now that he always believed that before the project takes off, that should be a cabinet approval, there should be a parliamentary approval, PPA approval, since none of these things were approved – In fact, the Auditor General’s report suggested that the company did not even have the necessary license to operate the system they wanted to operate?
“So the question is, what was the reason for the government to act in a way to give our $2 million? Who actually took the decision to pay this entity in Mauritius was Dr. Bawumia, the chairman of the economic management team, they call him the strategist now – aware that without any recourse to public financial management or the Public Procurement Act, it was wrong for any government entity to pay that kind of amount?”
This monumental infrastructure announced by President Akufo-Addo had its plan drafted back in 2017.
But an assessment of GIIF’s risk management issues reveals that the policy is still in the draft stage.
In 2018, Africa Investor Holdings Limited incorporated a Special Purpose Vehicle (SPV) in Mauritius to establish the Ghana Sky Train Limited to develop the Accra Sky Train Project through a Design, Build, Finance, and Operate arrangement.
Already, the Minister for Railways Development, John Peter Amewu hinted that the incumbent government will not be able to provide Ghanaians sky trains as earlier indicated.
According to him, even in a few years to come, this project cannot be implemented because it requires a significant amount of capital and the government does not have the fiscal space to absorb such a facility.
“It is not possible to be done now. I don’t see any sky train being done in the next 3 to 4 years. There is not going to be any sky train in the country. It is not possible,” he said in an interview in November 2021.
During the address today, Governs Kwame Agbodza insisted that the arrangement amounts to organized crime.
“So who authorized the payment of the $2 million in terms of the so-called feasibility, and which normal decision maker pays out $2 million for a feasibility study before, as they put it, they determine whether the project is bankable? These things only happen when it’s an organized crime. When people are careless, clueless, and reckless about public expenditure because they don’t care. It only happens when there’s organized crime. So I think the minimum the Auditor General should be asking for is the refund of the $2 million.”
More on the botched project.
Prior to Peter Amewu’s comments, Transport Minister Kwaku Ofori Asiamah, during the ministerial vetting process, indicated that processes are still ongoing for government to construct the sky train project as a means of transport in the country.
At his vetting on February 23, 2022, Mr Asiamah told the Appointments Committee chaired by Chairman Joseph Osei Owusu that his office together with Railways Ministry had engaged various prospective developers who had expressed interest in constructing the project.
But 2021 report by the Auditor General indicated that not much has been seen in terms of feasibility studies regarding the project.
The A-G said it has already advised the management of the Fund to take steps towards “finalization and approval of the risk management policy by the Governing Board for implementation.”
The report subsequently urged management to “continue to monitor the feasibility of the investment in the SPV and make the necessary provisions based on the outcome of the feasibility studies.”
Meanwhile, despite receiving the money in February 2019, the SPV, Ai Sky Train Consortium Holdings, is yet to obtain a license for “Aeromovel Technology’ required for the Sky Train Project.
GIIF was found to not have certificates of ownership for the equity investments in three companies totaling ¢146.6 million.
“We advised Management to take steps to obtain the appropriate certificates for all its investments.”
In November 2019, the government signed the concession agreement with South African firm Africa Investment (Al) at a cost of $3 billion.
It was geared toward reducing traffic congestion in Accra with construction expected to commence in January 2020.