18 February 2014

Liberia: Cancellation Complication - Gov't Mouthpiece's Rants May Prove Costly in LTA Saga

Why Did Finance, Justice Sign Off On Controversial LTA Lease Without "No Objection" From PPCC as Stipulated in Regulation #003 of the PPCC Act?

A declaration by Liberia's Minister of Information Lewis Brown last week may prove costly to the ongoing efforts to terminate a controversial lease agreement between the Liberia Telecommunications Authority (LTA) and a Chinese company, Qingian International (Lib) Group Development Co. Ltd. (CNQC) to rent its apartment building to house the LTA.

Angelique Weeks, the Chair of the LTA agreed to pay US$385,000.00 (Three Hundred Eighty Five Thousand United States Dollars) per year, with a three-year upfront payment to a Chinese Landlord totaling US$1,155,000.00 (one million, one hundred fifty five thousand United States dollars).

The four-storey building contains thirty-one rooms and six bathrooms situated on two lots of land. The building, located on the Congotown back road near the Baptist Church, had previously been turned down by the National Investment Commission because the landlords demanded an asking price of US$450,000 per annum.

The agreement was terminated by President Ellen Johnson-Sirleaf last week after a FrontPageAfrica investigation blew the lid open on the controversial deal. The LTA entered into the agreement despite objections from the Public Procurement Concessions Commission and concerns from the Ministry of Justice.

However, a team of FrontPageAfrica reporters who visited the controversial property last week noticed that LTA was already situated in the building, raising concerns over whether the president's cancellation was still in place. The LTA's previous lease with the Methodist Church has already expired.

Now FrontPageAfrica has learned that some complications have emerged in the government's attempt to cancel the agreement amid a growing possibility that the Chinese company could sue the Liberian government for breach of contract.

Legal experts say, Brown's admission last week that the LTA followed all the rules against the PPCC objections could complicate the GOL's attempts to cancel the agreement.

Brown, addressing the weekly news briefing last week said:

"For the lease of a piece of property to be used by the LTA as a temporary headquarters. What has been discovered is that in fact all of the attending processes and procedures to legitimize such a transaction were followed."

"Agreements committing the LTA and by extension the Government must be signed by the Ministry of Justice, the Ministry of Finance and the operating agencies, these were scrupulously followed and so quite clearly, all of the requirements of the law have been met."

"However, the president is still very concerned that expending such an amount notwithstanding the fact that the legal processes and procedures are satisfactory, the president still construes this decision, not the processes and procedures, but the decision as one which borders on the error of judgment for many reasons."

"So notwithstanding, they say everything that is legal may not always be expedient, on the side of expediency the president has directed the Ministry of justice to take every step required under the law to ensure that the agreement is nullified."

"Notwithstanding, the fact that all the documents made available show that laws have been followed the President believes this may be an error of judgment by the LTA and has therefore instructed the Ministry of Justice to with immediate effect take every step necessary to nullify the agreement".

Lewis Brown's comments contradicted a PPCC letter responding to the LTA's request for no-objection. More troubling, are the fact that both the Ministries of Finance and Justice signed off on the deal without a "no-objection" letter accompanying the LTA's request.

Section 31 of the PPCC Act states that prior notice to the PPCC is required for proposed contract awards exceeding the following thresholds: Goods-US$200, 000; Works-US$400, 000; Services-US$100, 000. Below these threshold levels, a notice to the Commission is for information and publication of contract award as required by Section 37 of the PPC Act.

Regulation Number 003 stipulates that the Ministry of Finance shall take part in the negotiations and signing of contracts over US $250,000 and the contracts shall be attested to by the Ministry of Justice.

Many are now wondering how the Ministry of Finance and the Ministry of Justice signed off on the deal in the wake of massive hardships in Liberia. Sources at both Finance and Justice Ministries say, the sign off on the agreement was done in the absence of Ministers proper with Sebastian Muah signing for Finance and Benedict Sannoh signing for Justice.

While both ministries agree that the contract with the Chinese is binding, an authoritative source told FPA Sunday that the Ministry of Justice is currently in negotiation with the LTA and the Chinese company to find a way out.

"The bottom line is we need to negotiate first, but if it fails, then we will have to explore legal options. But the truth of the matter is both Justice and Finance failed the government on this lease deal," a source told FPA Sunday. "

"For now we are working with Justice to work with the Chinese. The issue here is that the wisdom was wrong from the beginning on this deal. If money has been paid, we need to renegotiate and find a building with a reasonable price for the LTA to transfer to. "

"The current size of LTA is too big for the work they do. That agency should not have more than 50 persons. As a result, they had employees scattered in three buildings around Monrovia. Thus, if you bring them into one building it should be at a low cost to the government. "

"On this deal, the cost is high to government, so the wisdom was wrong," said the source who spoke on condition of anonymity Sunday.

The source added that the ball remains in the Ministry of Justice's court to find a legal way out of the LTA impasse, but added that the LTA's account is still frozen even though they have already moved into the building. "They don't have money to keep on running," the source concluded.

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