Minister Justifies $600,000 Business Plan

The ex-Minister of Communications (now Minister of Parliamentary Affairs ), Felix Owusu Agyapong has justified the payment of 600,000 United States dollars to the Norwegian management consultancy firm, Telenor, for a business plan it prepared for the Ghana government which Telenor now uses to run Ghana Telecom.

At issue is whether it is proper for Telenor to be paid for a business plan which it is now implementing at Ghana Telecom and for which it is being paid no less than $150,000 a month.

In a statement on the Management Service Agreement (MSA) between Ghana Telecom and Telenor to parliament on Wednesday, March 26, Agyapong said the consultancy fee could have been higher. “It should be recognised that the earlier exercise that was conducted in 1996 cost the country more than $US3 million in consultancies. I wish to assure this house that the business plan by Telenor and all other consultancy fees for the exercise shall not exceed $US 1million.”

He said now that government has paid for the business plan it belongs to the state and could have been given to another company to execute, if negotiations with Telenor had failed. The payment of $600,000 for a business plan to be implemented by Telenor itself, $1.2 million per annum in wages in addition to a $1.8 million-service contract, are some of the knotty issues Public Agenda and Weekend Agenda has raised concerns about in the past few weeks.

Other issues raised are the inconclusive negotiations with Telecom Malaysia, Telenor’s deduction of 4% interest before tax and the planned retrenchment of middle level staff above 52 years.

The country has agreed to pay the Norwegian management $150,000 per month as cost of the management contract. This is aside an amount of between $15,000 to $20,000 per month which Ghana Telecom (GT) would be doling out to each individual Norwegian currently working there. There were currently seven Norwegians working under the Telenor contract agreement, meaning GT is expected to pay $100,000 in wages in addition to the $150,000 management contract. This amounts to $250,000 a month.

The bad news for distressed Ghanaians is that the Norwegians will pay no taxes on their earnings. Sadly, Agyepong's statement to parliament was silent on these dark spots in the contract. Also, while officials deny that middle level staff aged 52 plus would be disposed off, the management of Telenor recently sent Kwaku Awuah Boateng, the Director of Finance packing, with the explanation that he ought to go on his accumulated leave. He was also asked to remove any personal items from the office. Telenor officials say he has not been sacked but insist the terms of the contract specify that the Director of Finance be a Norwegian.

The minister’s statement was however silent on this issue. Awuah Boateng was a member of the GT interim Management Committee (IMC) which steered the affairs of the company when the Malaysians left and before Telenor was brought in. Agyapong conceded that in the brief period during which the IMC handled he affairs of the company, it chalked some successes.

Telenor, which has managed GT for barely a month, has also chalked some successes, the Minister claimed. “Since Telenor took over the management of GT, the management and staff seem to have been emboldened to the extent that GT has started blocking some leakages in revenue”, Agyapong claimed.

Nevertheless, Agyapong told parliament that the “negotiations leading to the conclusion of agreement with Telenor were conducted in good faith and sufficiently to protect the interest of Ghana.”