22 May 2017

Ghana: Atuabo Project Was Bloated By Over $40m - Dr. Manteaw

The Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), Dr. Steve Manteaw is alleging that the one billion dollar cost of the Atuabo Gas plant in the Western Region was overpriced by 40 million dollars.

According to him, the Chinese company which undertook the project, SINOPEC, engaged in fraudulent activities in the execution of the project.

Dr. Manteaw told Citi News that Ghana Revenue Authority which is investigating the matter has so far recouped about $15 million from the company for bloating the contract sum.

"What for me is so most worrying is the fact that through my investigations I discovered that a particular plant that was imported by SINOPEC for the project was overpriced by as much as $40 million and this did not catch the attention of our public authorities. And even though I raised the concern as far back as 2013, nobody took serious notice of it."

"Again what I find to be so disturbing about this whole development is that Ghana Gas granted some tax concessions to SINOPEC which is not within its mandate. Because such mandates lies with Parliament which is not unusual but when this happens you need to go through the sector minister to come to Parliament for ratification. We did not seek Parliamentary ratification until 2016. The project was actually completed in 2014 so how do you come to Parliament in 2016 seeking ratification for tax exemptions for a project that is long been completed. That reduces the role of Parliament to rubber stamping," Mr. Manteaw opined.

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He further noted that he was surprised to discover that "Parliament approved the [$152 million] tax waivers without seeing the engineering, procurement, construction and commissioning contract with contains the fiscal exemptions."

Background

SINOPEC was to construct the Atuabo Gas plant at Ellembelle in the Western Region to provide gas to meet the energy demands of the nation.

The $1 billion project which received stiff opposition from some members of the New Patriotic Party (NPP) in Parliament was later completed in 2014 and commissioned in 2015.

It at the time was producing over 140 million cubic feet of gas per day to the Aboadze Thermal Plant.

Logistics from Dubai

According to Mr. Manteaw as part of the processes of procuring logistics, pipes and equipment for the gas project, SINOPEC set up an offshore company in Dubai by name FAZ which they procured the materials from.

"Because our authorities did not follow through these procurement activities of SINOPEC, the prices that were quoted were not fair market prices and so Ghana was shortchanged. I'm happy that the GRA has acted lately and investigated the matter. I've cooperated with them and given them as much as information that I have."

"Even though the investigations are inconclusive yet, I'm informed that as much as GHc15million has so far been recovered in additional taxes and penalties imposed against SINOPEC," he added.

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