General News of Tuesday, 2 September 2014
Business mogul, Alhaji Dr. Asoma Banda says government’s decision to choose PricewaterhouseCoopers (PwC) as transaction advisors on the setting up of a national airline raises ethical questions and lacks “the sincerity of trust.”
Alhaji Banda, who owns Antrak Air, believes PwC, which is liquidating the country's first national carrier, lacks the trust to advise on the establishment of another carrier and their selection by the government as transaction advisors means the whole process is off to a wrong footing.
“This is the same firm that liquidated Ghana Airways and they haven't even finished with the process and yet you thought it wise to choose them as transactional advisors," Alhaji Banda, who had earlier kicked against the setting up of a national airline, asked in an interview with the GRAPHIC BUSINESS.
The price for that action, he said, would be the potential collapse of the new airline after a few years of operation.
"This thing will not work. How can you choose the very firm that is liquidating Ghana Airways to advise on the setting up of another? Are they the only company in Ghana?
Attempts to get a reaction from PwC failed as scheduled appointments were not honoured.
However, it is on record that just before Ghana Airways rounded up, PwC sent in restructuring specialists to try to salvage the assets of the airline.
However, that venture did not succeed because Ghana Airways at the time carried too much debt on its books that did not make it prudent for fresh capital injection, the Senior Country Partner, Mr Felix Addo, told this paper a couple of months ago.
The accounting firm is one of the world's largest providers of business restructuring, business recovery and insolvency services, according to its website.
It said its Business Restructuring Service (BRS) has a global network of over 2,000 highly skilled professionals that can rapidly deploy cross-border services to stakeholders in troubled and seriously underperforming businesses.
The Chief Director of the Ministry of Transport, Mr Twumasi Ankrah-Selby, however, told the GRAPHIC BUSINESS in response to Alhaji Banda's concerns that there was nothing unethical about PwC’s role. He explained that PwC was only doing its job as professional consultants with expertise in the aviation industry.
"It was government that decided to liquidate the defunct airline and not PwC. They were only selected because of the experience they have in that area," he said.
He explained that the choice of the firm as transaction advisors was arrived at after a competitive bidding process conducted by the Ministry of Transport in conjunction with the Ministry of Finance and Economic Planning (MoFEP).
Ghana has, within the last 14 years, witnessed the collapse of two national airlines. The first was the Ghana Airways, which was established in 1958 but collapsed in 2004 after series of corruption allegations against management staff, interference by politicians, mismanagement and mounting debts owed creditors.
It was later replaced by Ghana International Airline (GIA), a partnership between the government and a consortium of private sector players from the United States of America (USA).
Five years into its operations, it also collapsed after a series of boardroom wrangling, political interference and widespread allegations of mismanagement against some top officials.
The liquidation and the disposal of Ghana Airways assets to pay off creditors started in 2010, with PwC as the official liquidators.
The liquidation process is still ongoing, according to PwC, which found that the defunct airline was indebted to the tune of US$250 million while its assets were sold off for US$25 million.
The firm won the bid to represent the Registrar General's Department (RGD) as the liquidator after a competitive tendering process by the Ministry of Transport in 2010.
A similar tendering followed its appointment as transactional advisors to the setting up of a new airline for the country, a process that is being financed with a US$30 million grant from the World Bank.
That notwithstanding, Alhaji Banda, who currently chairs Antrak Group and the Meridian Port Services (MPS) Limited, sees this to be double standards.
"If you are a serious company, an auditing firm for that matter, why will you be liquidating one airline and agree to advise on the establishment of another," he asked.
Alhaji Banda's other concern with the proposed establishment of a new airline was the timing.
With the current crisis facing the economy, he said establishing a national airline should be the last thing that the government should be thinking about.
"If you are in difficult times of which the whole nation has agreed, you do not have to think of things that are luxurious. Let us be serious here; is establishing a national airline a priority?" he quizzed.
Of grave concern, he said, was the fact that the Ministry of Transport, which is fronting the establishment of the airline, "is in a ‘promise-freak’ mood as though it is campaigning for votes."
"This same ministry is promising international airport in Tamale, regional airport in Ho, expansion of Kumasi Airport and development of Boankra Port and now the setting up of an airline. Where is the money to do all these projects?" He asked.
Given that the Minister of Transport, Mrs Dzifa Attivor, like any other minister is representing the President in their respective duties, Alhaji Banda fears that her inability to carry through with the numerous promises could cause people to say the President had failed to honour his promise.
The chief director of the Transport Ministry disagreed with that assertion, but explained that funds for the expansion and the setting up of new airports were not coming from the central budget.
"These are projects to be handled by the Ghana Airport Company and so if you lump them together and conclude that they will drain government funds, then you are making a wrong conclusion," Mr Ankrah-Selby said.
With the new airline, he explained that the public-private partnership initiative under which the project would be executed could insulate the government from the full financial burden, given that a larger chunk of the new company would be given to the private sector.