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Business News of Tuesday, 28 June 2022

Source: www.ghanaweb.com

Judgement debt: Chinese company sues Ghana government in London court

Government abrogated Beijin Everyday contract and hands it over to Huawei Government abrogated Beijin Everyday contract and hands it over to Huawei

Ghana faces looming judgement debt

Company reportedly demands in excess of US$50 million for abrogated contract

Government abrogates Beijin Everyday contract and hands it over to Huawei


Member of Parliament for Adaklu, Kwame Governs Agbodza, has cautioned that government risks attracting a judgment debt over the abrogation of an international contract involving a Chinese company.

The lawmaker told the media on Monday, June 27, 2022; that government has been sued by Beijin Everyway in respect of the abrogation of a traffic management system contract in 2020.

According to him, the company is currently at the London Court of International Arbitration seeking payment to the tune of US$50 million dollars for the wrongful abrogation of the contract that has since been re-awarded to Huawei.

“Somewhere in 2012, the government of Ghana entered into this China Development Bank agreement with the Chinese Government. Under that there are different components, part of those were to improve traffic management in Accra.

“Subsequently, Parliament approved commercial agreement for Beijin Everyway to be the contractors of that component which costs about 100 million dollars. When government changed the programme was still ongoing. We are told that the developers have been working together with the Ministry of Road," he stated.

He added that the Ministry remained the supervising ministry of the project and the President formally opened the control center when the particular phase of the project ended.

“But from 2019, it appears there have been some challenges which led to a decision taken in 2020 for government to unilaterally just decide that they were changing the contractor from Beijin Everyway to Huawei.

“Interestingly, when they came to Parliament it was the Ministry of National Security that brought a new bill. We were surprised because it was the Ministry of Roads and Highways that introduced the bill which we passed and the implementation has started.”

He stressed that no amount of questioning on the part of civil society, the media and Members of Parliament, would sway the Majority who “insisted that it was the right thing.”

He added: “In fact, we insisted on finding out what the Attorney General’s opinion was, they told us that Attorney General okayed the abrogation. It turned out that as we speak, Huawei, has taken over the project but nothing is happening.

“Secondly, the Beijin Everyway company has sued Government of Ghana and as we speak, they are in arbitration in London. From what I know they are demanding anything close to 50 million dollars in damages and loss of revenues, legal costs and other things.”

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In November 2020, Parliament approved a $100-million loan agreement between the government and the China Development Bank (CBD) to finance the Accra Metropolitan Area information technology-enhanced traffic management project.

The House also approved tax waivers and duties of $25.8 million on materials, equipment and services to be procured for the project. The project, according to a Graphic report was intended to help manage traffic, promote road safety and improve security in the country generally.

The report said, the project comprised a comprehensive traffic violation surveillance systems (e-Police) to be installed at important road intersections to capture traffic violations and integrate these with the Driver and Vehicle Licensing Authority’s (DVLA’s) database, so that law enforcers can identify and apprehend traffic violators.

The system will also come with a video management system based on real-time recordings from surveillance cameras deployed by National Security and other state institutions, the report added.

Additional files from Graphic Online

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