Pwalugu Dam: Contractor was paid $12 million only for mobilization – GIDA

The Ghana Irrigation Development Authority (GIDA) has explained that the $12 million payment to the contractor responsible for the Pwalugu Multipurpose Irrigation Dam project.

GIDA in justifying the payment, said it was part of the contractual agreement with Messrs Power Construction Corporation of China (POWERCHINA). The payment, totaling $11.9 million, was designated as mobilization funds.

GIDA stressed that the payment to POWERCHINA was made in accordance with the terms of the contract, which required a mobilisation fee.

The pre-construction document submission process and the start of specific physical work were among the first project activities that this fee was meant to streamline.

It was anticipated that the 2019 project, which would include a hydro-solar hybrid system with 60 MW of hydropower and 50 MW of solar power, would be finished in the second half of 2024.

The $993 million Pwalugu multifunctional dam project in the Talensi District was formally started in November 2019 by President Akufo-Addo.

Inquiries concerning the $12 million payment made to MS Power China International Group Limited for the project were answered by the Bank of Ghana (BoG) earlier this month.

In a statement issued on Tuesday, May 28, GIDA emphasized that the $12 million payment is not to be interpreted as the project’s final payment.

GIDA stressed that it is clear that this contribution only constitutes a percentage of the total financial commitment given the scope and cost of the Pwalugu Dam project.

The statement went on to say that the payment was paid in three installments, each of which was intended to mark a different project milestone.

“The EPC contract consisted of a detailed feasibility study (engineering designs, social and environmental impact assessment, soil and agronomic studies) and engineering construction (working drawings and setting out of works). It is important to note that these are all pre-construction activities that are required before actual construction works can commence.”

“Under the contract, the government was expected to pay USD 48,570,889.69 million (which constitutes 12% of the total contract sum of USD 404,757,414.06) as mobilisation to the contractor subject to the provision of an advance payment guarantee from a reputable bank.”

“Following the receipt of the advance payment guarantee with the face value of USD 60,713,612.11 from the contractor’s bankers (Stanbic Bank), an amount of USD 11,949,088.06 (25% of the total advance mobilisation required) was paid in three tranches,” the statement read in part.

The Minority in Parliament led by the Ranking Member on the Mines and Energy Committee, John Jinapor, has vowed to ensure every amount spent so far is accounted for.

He has insisted that they will ensure that anyone who has done anything wrong in this matter is dealt with.

“We will activate all the parliamentary processes to retrieve that amount of money, almost 200 million cedis, that has been dashed to this contractor. Somebody must be held accountable. $12 million can do a lot in this country.”

“So we’ll use every legitimate means, every legal means to retrieve the money and punish those who have caused this financial crime and financial loss to the state,” he said.

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