Full text: Sammy Gyamfi unpacks NDC's position on $170m GPGC judgement debt
Source: myjoyonline

Good afternoon distinguished ladies and gentlemen of the media. On behalf of the National Democratic Congress, I will like to thank you for honouring our invitation at such short notice. The purpose of this press conference is to share with you our position on the raging issue of the judgement debt of USD$170 million dollars that has been awarded against the Republic of Ghana to a company called, Ghana Power Generation Company (GPGC) by the Permanent Court of Arbitration of the United Nations Commission on International Trade Law Tribunal, an issue that has set many tongues wagging in the past couple of days. We are pretty sure that by the time we are done unpacking the facts of this case in this evidence-based presentation, you will be left in no doubt about how we got ourselves into this avoidable financial loss situation and the personalities who are responsible for the same. BRIEF BACKGROUND Friends from the media, let me start by providing a brief background to this issue in order to situate the discussion in a proper context. As we all know, Ghana was confronted with a serious power crisis also known as “Dumsor” between the year 2013 and 2015 which negatively affected citizens, businesses and the economy as a whole. This problem which was not a new phenomenon was largely occasioned by a power generation capacity shortfall. The visionary Nation Builder, H.E John Dramani Mahama who was the President of the country at the time, did not seek to apportion blame but instead took full responsibility for the age-long problem and set out to address the country’s generation capacity deficit through the fastest mobilization of emergency power ever witnessed in the history of this country. The goal was not only to produce power to meet our immediate power demand as a country but to produce more power to meet our ever-increasing future power needs and more importantly, to potentially increase the amount of power we export to neighboring and other Sahalian countries for revenue. One of such Emergency Power Agreements (EPA) that the erstwhile NDC/Mahama administration executed in furtherance of this vision was the EPA with the Ghana Power Generation Company (GPGC) for the supply of 107MW of power. The Agreement which was signed on 3rd June, 2015 was negotiated by a competent team of technical experts from the then Ministry of Power, the Electricity Company of Ghana, the Volta River Authority and the Office of the Attorney General and Minister of Justice. After this crack team of experts had negotiated the EPA and approved its contents, the EPA was approved by Cabinet and later, the Parliament of the Republic Ghana on 23rd July, 2015 with the NPP-side fully participating in the approval process, both at the Mines and Energy committee level and at the plenary. Ladies and gentlemen, it is worthy of note that among the EPAs executed by the Government of Ghana, the GPGC EPA was the one with the most favorable terms for us as a country. Firstly, it had a capacity charge of of 4 US Cents per KW/H with GoG’s payments denominated in Ghana cedis and secondly, it had the shortest duration of four (4) years. Thirdly, and more importantly, it was the only EPA under which the Government of Ghana was not required to provide any financial guarantee or standby Letters of Credit. WRONGFUL TERMINATION OF GPGC EPA Ladies and gentlemen of the media, the implementation of the GPGC EPA proceeded smoothly under the Mahama/NDC administration until the Akufo-Addo/Bawumia government took over the reins of power in the year 2017. On 13th February, 2018, the Minister for Energy, Boakye Agyarko wrote to terminate the GPGC EPA. The termination of the GPGC EPA, according to Boakye Agyarko, was on the instructions of Cabinet, which is chaired by President Nana Addo Danquah Akufo-Addo. It is instructive to note that the reasons which were cited by the Akufo-Addo government as the basis for the termination of the GPGC EPA did not include any issue of excess power or excess capacity charges as government would have us believe. Rather, the reasons which were contained in Boakye Agyarko’s termination letter of 13th February, 2018 and the Advice of the then Attorney General, Gloria Akufo dated 28th August, 2017, bordered on alleged non-performance of certain Conditions Precedent and Subsequent by GPGC, namely; Failure of GPGC to secure a license from the Energy Commission to enable them engage in the sale of electricity in the country, in accordance with section 11 of the Energy Commission Act. Failure of GPGC to secure a siting and construction permit for the project. Failure of GPGC to achieve financial closure. Distinguished friends from the media, all these claims by the Akufo-Addo government which formed the basis for the termination of the GPGC EPA were found to be contrived and baseless by the Permanent Court of Arbitration of the United Nations Commission on International Trade Law. At paragraph 479 of the Arbitral Award, all the three (3) Arbitrators, including Ghana’s selected Arbitrator, Professor Fiadjoe, unanimously held that these claims by the Akufo-Addo/Bawumia Government did not “reflect the true facts”. The Tribunal among other things, noted that GPGC had actually secured a building permit from the Kpone Katamanso District Assembly for the Blue Ocean project and had actually applied for a commercial license from the Energy Commission, save that, President Akufo-Addo had not constituted the Board of the Energy Commission, which is the body mandated by law to issue such Licenses at the time the Agreement was being terminated. Additionally, the Tribunal found that all the Conditions Precedent and Subsequent that were yet to be fulfilled were wholly attributable to failings on the part of the Government of Ghana and not GPGC. In short, the Arbitration Tribunal found that the termination of the GPGC EPA by the Akufo-Addo/Bawumia government was wrongful and without any lawful justification, for which reason the panel unanimously awarded damages of about USD$170 million against Ghana, inclusive of interest. This can be found at paragraph 493 of the Arbitral award. Ladies and gentlemen of the media, it is crystal clear from the foregoing facts that are contained in the Arbitral Award, that this huge judgement debt of USD$170 million has been occasioned by the criminal negligence, incompetence and recklessness of the Akufo-Addo government. Their willful recklessness in terminating the GPGC EPA on the basis of contrived and frivolous basis is the reason why Ghana has been slapped with this avoidable judgment debt. GoG’s CONCESSION THAT THE TERMINATION OF THE GPGC EPA WAS WRONG. Friends, it will surprise you to know that after the GPGC EPA was terminated and the company appealed to government to rescind its decision, the Akufo-Addo government acting through the Minister of Energy and his Deputy conceded that the termination was wrong and gave the company several assurances that the President and Cabinet were going to take remedial steps to reinstate the terminated EPA. Evidence of this fact is contained at paragraph 486 of the Arbitral award, and settles the fact that indeed President Akufo-Addo, the Minister of Energy at the time, Boakye Agyarko and the Attorney General are jointly and severally responsible for this USD$170 million financial loss to the State. They knew and acknowledged that they had no basis to terminate the Agreement, yet they proceeded to terminate it and failed to remedy same by reinstating the EPA. What is even sad in all this, is the fact that Ghana is now going to pay a whopping USD$170 million as judgement debt to a private company for a deal that would have caused the nation USD$99.6 million over the full four (4)-year duration of the Agreement. That is, if the Agreement had been maintained and not terminated by the Akufo-Addo government. FRAUDULENT CLAIMS ABOUT THE AHENKORA PPA COMMITTEE REPORT Ladies and gentlemen of the media, the NDC has taken notice of certain false claims by the Attorney General and Minister for Justice, Godfred Yeboah Dame, and spokespersons of the Akufo-Addo government that the decision to terminate the GPGC EPA was based on a recommendation by the Ahenkora-PPA Committee that reviewed a number of PPAs executed by the previous NDC government. Our painstaking investigation into this matter shows that, the claim that the PPA committee recommended the termination of the GPGC EPA is palpable falsehood. In fact, this claim which is contained in an unsigned report making rounds on social media was part of the defenses of the Akufo-Addo government which were outrightly dismissed by the International Arbitration Tribunal in their decision. Friends from the media, it will interest you to know that during cross examination at the arbitration proceedings, Dr. Ahenkora, who was the chairman of the PPA committee and a key witness for the Government of Ghana, said that he could not recollect any such recommendation by the committee and dissociated himself from the AG’s advice that recommended the termination of the GPGC EPA. This fact can be found at paragraph 490 of the Arbitral award. This is how much the Akufo-Addo/Bawumia government derilicted in its duty to protect the public purse. Friends, does it not strike you as strange that Dr. Ahenkora did not bother or see the need to ask the Arbitration Tribunal for leave to refresh his memory by referring to the committee’s report which was the main essence of his testimony? FALSE ASSURANCES BY GoG TO GPGC It is also instructive to note that after the Ahenkora Committee concluded its work, officials of the Akufo-Addo government gave several assurances to GPGC that its PPA was not one of those which had been recommended for termination by the Committee. This fact is captured at paragraph 491 of the Arbitral award. This begs the question as to how the said recommendation which formed the basis of the termination of the GPGC EPA found its way into the unsigned report of the Ahenkora-chaired PPA committee. In any case, how come that the said Ahenkora-Committee report was not signed by the Chairman and members of the committee? Friends, as I have already indicated, our painstaking investigation into this matter shows that the said recommendation was fraudulently inserted into the draft Ahenkora report by political actors who were determined to terminate the GPGC Agreement at all cost even though they very well knew they had no lawful justification to do so and that, doing so could potentially occasion a judgement debt and financial loss to the State. We in the NDC believe that the circumstances surrounding the smuggling of the said recommendation into the Ahenkora-committee report raise issues of fraud and must be investigated. FALSE CLAIMS ABOUT PROPRIETY OF GPGC EPA Ladies and gentlemen of the media, we have also taken notice of desperate attempts by the Attorney General, Godfred Yeboah Dame, and some individuals to impugn the propriety of the GPGC EPA which was executed under the NDC/Mahama administration. These people have suggested that the GPGC EPA was unnecessary and its terms defective. Friends from the media, nothing could be further from the truth than this claim. In the first place, how can the NPP who fully participated in the approval of the GPGC Agreement in Parliament, both at the Mines and Energy committee level and at the plenary, turn around to question the propriety of same? It is important to make the point that aside the fact that the GPGC EPA was approved by Cabinet and Parliament, its terms are materially the same as all the other PPAs executed by the then Power Ministry, some of which (KARPOWER, Cenpower etc.) have been extended by the Akufo-Addo/Bawumia administration. In fact, and as I have already explained, the terms of the GPGC EPA were to a large extent more favorable to the interest of the Republic of Ghana than all the other PPAs executed at the time. What even makes this claim ridiculous and preposterous is that the Akufo-Addo government itself has by its own conduct expressed faith and confidence in the GPGC Agreement. The government terminated the GPGC EPA and actually proceeded to make a Counterclaim against GPGC for Early Termination damages at Arbitration, by relying on provisions in the same Agreement. Why then have they turned around to question the integrity or propriety of the very Agreement they relied on for their Counterclaim? If the Akufo-Addo government thought that the Agreement was defective, why did they rely on provisions in the same Agreement for the termination and Counterclaim? And why did they not raise the issue of the impropriety of the Agreement either in the termination letter of 13th February, 2018 or at the Arbitration proceedings? For emphasis, the GPGC EPA was approved by Parliament and its terms were very favorable to the interest of Ghana. The claim by the Attorney General, Godfred Dame that the GPGC PPA was unnecessary and defective, and his subsequent threat to refer same to the CID for investigations is nothing but a desperate post-facto face-saving gimmick, which must be treated with outright contempt. As I have already indicated, the facts show that the USD$170 judgment debt awarded to GPGC was occasioned by the criminal negligence, complete dereliction of duty and recklessness of the Akufo-Addo government in terminating the EPA without any lawful justification and not the signing of the Agreement. Therefore, those who have to be held responsible are those who were involved in the termination of the Agreement on the basis of fictitious and contrived claims, when they knew the danger their actions could portend for this country and not those who signed the Agreement, which was approved by Parliament. GOVERNMENT’S SLOPPY AND INCOMPETENT HANDLING OF COURT PROCESSES TO CHALLENGE ARBITRAL AWARD Distinguished friends from the media, another point worthy of mention in this discussion is the crass incompetence and sloppiness with which the Attorney General’s Department and the Akufo-Addo government handled the court processes to set aside the Arbitral award. As you may be aware, at Arbitration, the Republic of Ghana was represented by lawyers from the AG’s Department which included the Deputy AG at the time and now AG, Godfred Yeboah Dame, and a Ghanaian Law firm, Amofa & Partners. The Permanent Court of the United Nations Commission on International Trade Law Tribunal delivered its final award on 26th January, 2021 after which Ghana had a 28-day ultimatum to challenge same in a court of competent jurisdiction in the United Kingdom, the seat of the arbitration. The Akufo-Addo government then engaged the services of an English law firm Omnia Strategy, which is owned by Cherry Blair, wife of Tony Blair, former Prime Minister of the UK at the expense of the Ghanaian taxpayer. Sadly, the government of Ghana and its external solicitors went to sleep only to go to an English court on the 25th day of the 28-day ultimatum to ask for extension of time. The court magnanimously gave an eight (8)-day extension to allow our external solicitors file the appropriate processes. Subsequent to the grant of this extension of time by the Court, our external solicitor, Omnia Strategy, realizing that the Government of Ghana had a very bad case, and mindful of the damage the case could do to their enviable reputation, backed out of the case. The Akufo-Addo government once again engaged the services of another foreign law firm called Volterra Fietta at the expense of the Ghanaian taxpayer, who managed to file a process to challenge the Arbitral award on the 1st of April, 2021, twenty three (23) days after the extended deadline of 8th March, 2021 had lapsed. All the excuses which were cited by the Akufo-Addo government for the delay, mainly COVID-19 and the 2020 elections with its associated handing-over bureaucracies were dismissed as “intrinsically weak” by the Court and the final Arbitral award upheld. Ladies and gentlemen of the media, the NDC is appalled and disgusted by the incompetence, sloppiness and recklessness that was displayed by the NPP/Akufo-Addo government, particularly the AG’s department in the conduct of this case. The AG and her Deputy, Godfred Yeboah Dame, who led the Government of Ghana’s legal team at Arbitration, very well knew that the Tribunal had set 26th January, 2021 for its Arbitral decision or award. They all became aware of the Arbitral Award against Ghana on 26th January, 2021 at which time, their party, the New Patriotic Party was in office. They knew that Ghana had only 28 days to challenge the award if we so wished and they knew that an AG or deputy AG was not likely to be in office by that time. What instructions did they give to the Solicitor General or the relevant officers of the AG’s Department in their handing over notes or what arrangements did they put in place to ensure that the Arbitral award was challenged if it didn’t go in our favor? Clearly, the current Attorney General, Godfred Yeboah Dame, has proven to be very incompetent and sloppy as far as this matter is concerned. His desperate attempt to extricate himself from blame and shift blame to his former boss, Madam Gloria Akufo, and past government officials who left office about five (5) years ago, is shameful and unfortunate to say the least. In any serious jurisdiction, the Attorney General, Godfred Yeboah Dame, and the Solicitor General, who are paid by Ghanaians to defend the interest of the State in legal matters and who were actually involved in the conduct of the case, would have been held accountable or resigned by now. RESPONSE TO FALSE CLAIMS ABOUT EXCESS CAPACITY CHARGES Finally, ladies and gentlemen, we cannot end this press conference without responding to the false narrative about excess capacity charges that the NPP and its surrogates have been regurgitating for sometime now. The claim by the NPP that the Akufo-Addo government is paying a lot of money for power we don’t need or as excess capacity charges because the erstwhile NDC/Mahama government signed many needless take-or- pay PPAs such as the GPGC EPA is mischievous to say the least. First and foremost, let me make the point that take-or-pay arrangements are normal insurance or financial viability provisions in Power Purchase Agreements. In fact, it is not a new phenomenon in Ghana at all. For the records, the Osono/CENIT PPA entered into by the NPP/Kufour administration was a take- or-pay agreement. Also, the Trans Tema plant that was brought into the country during the Kuffuor era was on a take-or-pay basis. Again and more instructively, the Tema LNG project recently entered into by Akufo-Addo government is a take-or-pay agreement. There is therefore nothing wrong with take-or- pay agreements per se. Also, the NPP’s claim that the country currently pays USD$1 billion as excess capacity charges as a result of PPAs executed by the erstwhile NDC regime has been proven to be false. When the minister of Finance, Ken Ofori Atta, appeared before Parliament few days ago to answer a question filed by Hon. Alhassan Suhuyini on the amount of money government has paid in excess capacity charges so far, he said in his answer that the country has paid a total of $937 million to only three (3) companies, which are Karpower, Aksa and Cenpower from the year 2017-2020. This figure comes to an annual average payment of USD$234 million when it is divided by four (4) years. It is worthy of note that about USD$200 million of this amount constitutes the 20% standard reserve margin of ECG which is a necessity and not excess capacity. The remaining USD$34 million worth of power would have been totally wiped off if VALCO had been revived by the Akufo-Addo government or even if the AFD-funded 330KV transmission line project from Ghana to Burkina Faso which was commenced by the erstwhile NDC/Mahama administration and which would have ensured an increase in the exportation of power from 100MW to 200MW to Burkina Faso alone, had been completed by this government. The question we want to ask those who keep disturbing our ears with this propaganda about excess capacity charges is; why has the Akufo-Addo/Bawumia government extended the duration of the Karpower PPA executed by the NDC/Mahama government from 10-20 years and that of Cenpower from 5-10 years if the claim about excess capacity charges is true? Only recently, the Minister for Energy, Mathew Opoku Prempeh, asked for Ghana to increase its generational capacity. As we speak, a steel manufacturing company in Ghana, B5 Limited, which is currently the biggest in Africa, is operating at 30% capacity due to lack of power. Where then lies the claim that Ghana is paying for power we don’t need? Friends from the media, even if the Akufo-Addo/Bawumia government thought that the country didn’t need the 107MW of installed capacity the GPGC EPA was supposed to provide or that the country could not export same for revenue as the Mahama administration had planned, the wisest thing for them to have done was to have negotiated and deferred the implementation of the Agreement, just as they claim to have done in the case of four (4) other PPAs. Terminating the Agreement on the basis of contrived reasons which they knew could not be sustained and could potentially occasion a judgement debt and financial loss to the state was not an option. After all, the maintenance and performance of the Agreement would have caused the nation only USD$99.6 million, with the possibility of the State exporting same for revenue. CONCLUSION In conclusion, and as I have already demonstrated with indisputable facts in my presentation, Ghana has been slapped with this judgement debt of USD$170 million as a result of the reckless and wrongful termination of the GPGC EPA by the Akufo-Addo government, and their sloppiness and incompetence in defending same at the Arbitration and in Court. The then Minister for Power, Boakye Agyarko, who wrote to terminate the Agreement and his Deputy at the time, knew and actually conceded that they had no legal basis to terminate the Agreement the way they did. They very well knew that terminating the Agreement that way could potentially occasion a financial loss to the State. Yet, they did so willfully knowing fully well what the consequences of their actions were. They failed to take advantage of the opportunity they were offered by the company to remedy the situation or reinstate the EPA as they had promised. This is why the wrongful termination of the GPGC EPA by the Akufo-Addo government and the avoidable financial loss it has occasioned the State is unpardonable. As a party, we are very sad that all of us as Ghanaians will have to cough up this colossal amount of money, USD$170 million, which is equivalent to GHS1.2 billion cedis or 10.2 trillion Old Ghana cedis and which accrues interest daily, compounded on a monthly basis. This colossal amount could have been channeled into the construction of thousands of dormitories and classroom blocks to end the obnoxious double-track system which is undermining the quality of secondary and tertiary education in the country, or the provision hospital beds and other facilities to end the much-dreaded no-bed syndrome which is claiming so many precious lives. Alternatively, this huge sum of money could have been used to build roads and for other useful projects that would have created jobs and improved the wellbeing of Ghanaians. The perpetrators of this evil must not go unpunished. The NDC hereby calls for investigations into the circumstances surrounding the unlawful termination of the GPGC EPA, particularly the alleged so-called recommendation by the Ahenkora-Committee for the termination of the said GPGC EPA, which in our view raises issues of fraud. We also demand that all officials of the Akufo-Addo government who were directly or indirectly involved in the processes leading to this huge financial loss to the State are held responsible and punished for same. But in the likely event that President Akufo-Addo, “the Mother Serpent of Corruption”, who is himself complicit in this matter fails to act, a future NDC government will investigate this matter and ensure that those responsible for the wrongful termination of the GPGC Agreement and the avoidable judgement debt it has caused the nation, are brought to book. We thank you for your time. Signed, SAMMY GYAMFI ESQ.