The government has expressed its intention to take over Tema Shipyard and Dry-Dock Corporation (TSDC) as the strategic investor failed to achieve the vision and goals enshrined in the Joint Venture Agreement.
The government went into a joint venture agreement with Penang Shipbuilding and Construction SDN BHD, a Malaysian Company, in 1996 and divested 60 per cent of its interest in the Corporation as a measure to improve the standard of operations in the shipyard.
Under the agreement, Penang was to rehabilitate the Shipyard and also procure such funding as was reasonably required by the Company to meet costs in connection with the rehabilitation and completion of the refurbishment of the Shipyard.
Alhaji Collins Dauda, the Minister of Transport who announced this on Monday at a press conference in Accra to highlight the state of the TSDC, said unfortunately, after 13 years, that vision had not been achieved and the goals of the Joint Venture Agreement had not been met.
He said in divesting its share of 60 per cent at that time, the government intended to acquire a strategic partner to help transform the Shipyard into a modern, well-equipped facility to meet the nation’s strategic objectives.
“It was against this background, that the Government of Ghana settled on the divestiture option and executed an agreement with Penang Shipbuilding and Construction SDN BHD as its partner,” he said.
Alhaji Dauda said following expressions of concern from various quarters on the state of the shipyard, a Committee of Enquiry headed by Mr Chris Ackummey, a Legal Practitioner, was set up in 2009 to investigate its operations and make recommendations that would lead to an improvement in performance.
He said the committee affirmed among others things the shipyard’s strategic importance and recommended that the government initiated action to regain control of the shipyard and government had since initiated a process which would conclude arrangements for the ownership of the shipyard to return to the Republic of Ghana.
The Minister said after much deliberation, during which the Government of Ghana took into consideration Ghana’s good relationship with Malaysia, the spirit of South-South cooperation and the intervention of the Prime Minister of Malaysia, the government decided to take a majority stake in the shipyard to determine its future direction.
“Government subsequently set up a Negotiating Committee to explore an amicable resolution of the issues including increasing Ghana government’s equity stake to at least 60 per cent of the Company.
“After numerous and lengthy sessions, the negotiations reached a deadlock, principally over matters related to shareholding structure and management control. To move the process forward and to fully clarify the Government of Ghana’s position, the President sent a delegation to meet the Malaysian Prime Minster on August 18 this year, to convey to him Government of Ghana’s response to the Minister’s earlier letter and the deadlock state of the negotiations,” he said.
Alhaji Dauda said as a result of those exchanges, it had been recognized by both sides that it was in their mutual interests for the future ownership and management of the yard to revert to the Republic of Ghana and had agreed to negotiate an outline framework for a structured and well organized transfer of the entire 60 per cent of the shares held by Penang not later than December 31, 2011.
He said the government had therefore mandated the Negotiating Committee, under an oversight committee chaired by the Chief of Staff, to conclude all the relevant details of the framework and ensure a smooth transfer and takeover of the shipyard and also to advise the government on steps to attain the strategic objectives of the shipyard.
He therefore assured the public of government’s commitment to manage the shipyard more efficiently to benefit all Ghanaians.
Mr Richard Kwame Asante, Chairman of the Government’s Negotiating Team, said it was a good strategic decision to go into the joint venture in 1996 and for the fact that the investor did not fulfill its part of the agreement did not make the decision a bad one.
“That’s the reason why government wants to take full ownership to enable it take responsibility in the running, managing and controlling the affairs of the corporation in a way that would improve performance of the shipyard,” he said.