Cabinet approved GHC67m Construction Pioneers payment - Memo

It has emerged that a Cabinet memo dated 19 July 2013 gave approval for the payment of some GHS67 million judgment debt to Construction Pioneers (CP).

On Thursday, 16 August, the 2016 Auditor-General’s report said the Attorney General and Ministry of Justice made payments to the tune of GHS 67,380,718.20 to Construction Pioneers (CP) as judgement debt without Cabinet’s approval.

Auditor-General, Daniel Domelovo, stated that the Ministry “could not provide any documentation with regards to the court judgement”.

In addition, the report said: “Management’s failure to investigate the cause of the direct debit for appropriate action resulted in the anomaly.”

In 2012, the then-government, led by late president John Evans Atta Mills, directed that judgement debts in excess of GHS10,000,000 be approved by Cabinet before settlement.

However, a review of bank documents of the ministry suggested that the 67 million was paid in two installments: GHS42,820,418.48 on 20 February, 2015 and GHS24,560,299.72 on 1 April 2015, even though no documentation points to approval by Cabinet at the time.

The Auditor-General, therefore, advised that “management should obtain the court judgement and all relevant documents to authenticate the payment” made during the tenure of former Attorney General and Minister for Justice, Marietta Brew Appiah-Opong.



However, the Daily Graphic reported on Friday, 17 August that even though the directive from Cabinet was in 2013 and all formalities concluded in 2013, the Ministry of Finance did not make full payment until 2014/2015.

The Cabinet memo stated that at the eighth Cabinet Meeting which was held on 25 July 2013, Cabinet considered a memorandum by the Attorney General and Ministry of Justice requesting for approval for the payment of a negotiated sum owed to Construction Pioneers.
“After discussing the memorandum, Cabinet gave approval to the request”, the memo added.

Mrs Appiah-Opong, in a memorandum dated 19 April 2013, requested Cabinet to consider and approve the payment of the outstanding balance of €16, 420,000 being the instalments due on March 31, 2012 and 30th June 2012, interest on the said sum as well as interest on delayed payment of earlier instalments.

This was pursuant to the Settlement Agreement dated March 18, 2010 executed between then-Attorney-General, Betty Mould-Iddrisu and Construction Pioneers.

Cabinet, in response to the memorandum, directed the AG to invite Construction Pioneers for an agreeable term of settlement; this was contained in a second Cabinet memo dated 17 May 2013, according to Daily Graphic.

After negotiations, the agreeable amount for payment by the Government of Ghana was £18, 455,303.94 which was paid in 2015 after Cabinet’s approval.



Background

The said request for arbitration is borne out of a Settlement Agreement executed between the Government of Ghana (GoG) and CP on 18 March 2010, by which the parties arrived at a global settlement of all GoG’s indebtedness to Construction Pioneers.

Per the terms of the Settlement Agreement, GoG undertook to pay to CP a global amount of €94 million out of which an amount of €14 million had already been paid in 2009. The outstanding sum of €80 million was to be retired in ten monthly instalments of principal and interest commencing on 31 March 2010 and ending on 30 June 2012.

The parties also agreed that in the event that any payment is made after the due date then GoG would be liable to pay additional interest.

The Ministry of Finance and Economic Planning suspended payments in 2012 of the two final instalments as it sought advice from the then Attorney-General on whether to pay or not in view of the hearings into the Settlement Agreement by the Public Accounts Committee of Parliament.

Betty Mould-Iddrisu referred the issue to the Chairman of the Public Accounts Committee who indicated at a hearing that his Committee would not be in the position to advise the Executive on what to do.