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General News of Saturday, 15 April 2017


AMERI controversy: 'Bloated' $150m reimbursement won't happen - Ayine

Former Attorney General Dr Dominic Ayine has revealed that the Africa & Middle East Resource Investment (AMERI) is unwilling to negotiate any new deal with the government.

He said the country is not getting any $150 million from the $510 million deal already signed under erstwhile President John Mahama government because the power company has indicated that it will be economically and financially unwise to revise anything in the current agreement.

Mr Ayine, who played a key role in the controversial deal, disclosed this on Joy FM/MultiTV's news analysis programme Newsfile Saturday and also refuted claims that he did not offer any legal opinion prior to signing the deal.

According to the Member of Parliament (MP) for Bolgatanga East, government started dealing with APR Energy, a subcontractor of AMERI where government issued an opinion. Subsequently, when there was an innovation, AMERI was substituted for APR Energy, he added.

"In substance, all the terms and conditions are the same except the substitution of the name Ameri for APR. What was the need for us to issue a second opinion to say Ameri has taken over?" he quizzed.

The AMERI deal was signed as an emergency power agreement in February 2015, between Government of Ghana represented by the Minister of Power and AMERI Energy, to ameliorate the country’s power challenges at the time.

But policy think tanks indicated that the cost of the project was outrageously high, suspecting the cost for the deal had been bloated.

The Nana Akufo-Addo government, therefore, set up a committee to look into the deal when it assumed power in 2017.

The Committee, led by private legal practitioner Phillip Addison in its report disclosed that it found technical and financial lapses in the contract.

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

The Committee said this is not equitable and recommends that operators of the plant should be invited back to the negotiating table to address and remedy the issues enumerated in this report.

However, Dominic Ayine says that is not likely to happen.

He explains that before the contract was signed, the Volta River Authority conducted a value for money analysis as well as other technical assessments before the agreement was signed.

“There has been no such contract in which government has an obligation to pay $510 million. We have a Build Own Operate and Transfer (BOT) with AMERI. In that contract, the obligation to build and operate the plant is on Ameri and then transfers it to VRA in five years.

“The key obligation for Ghana as a country [ECG and VRA] is to pay is to take and pay for the power and we are paying 14.5 cents pkh and it is only Sunni Asogli that beats Ameri with respect to the price,” he said. PricewaterhouseCoopers who did the value for money analysis has also confirmed this.

The misinformation about some $150 is pure balderdash, he added, explaining that the cost of the plant including installation and construction came to $360 million which takes into account of the cost of the equipment.

According to him, there are operation and maintenance cost elements as well in the agreement which government agreed to pay the 14.5 cents pkh.

"Government said AMERI's cost must be capped to a maximum including profit to $30 million per year which comes to $150 for the five years.

“If that is added to the $360 million it gives you the $510 million. The problem is that the people doing the analysis are not mentioning the $150 million…in all the analysis that Bright Simons [a vociferous critic of the deal] has done he has not mentioned that our principal obligation is to buy the power at the cost of 14.5 cents pkh," he said.

"I saw Bright Simons commenting that we choose the uncitral rule and so on...I taught International Investment Law for over 13 years, there is nobody in this country who is more knowledgeable in International Investment Law than Dominic Ayine," he said adding it is unthinkable for you anyone to argue that choosing the uncitral rule amounts to shortchanging Ghana.

Dr Ayine explained further, "Ghana doesn't have any obligation since we don't own the plant and if anything happens to the plant, which is not as a result of any act of the government of Ghana, the risk is to be borne by AMERI.

Regarding claims that the variable charges of 0.5 percent that comes to $16 million that is supposed to part of the bloated price that government is paying, he said that is the standard clause in Power Purchase Agreement due to the environment the company will be operating in. That is to take care of the wear and tear over the course of the contract.

He said government started with a rental agreement but VRA made it clear that they do not have the money to pay the rental charges of $450 million so the BOOT agreement kicked in where AMERI bore all the financial obligations.

"If anybody has evidence of monies paid from the government of Ghana to pay for that, they should let me have it. Neither ECG, VRA or the Power Ministry has made any payment to AMERI," he said adding Ameri chose their own third party (Medka) to do what they want on their behalf which has nothing to do with the government of Ghana.