Ghana to pay $1.3m judgment debt over solar irrigation project
Government is to pay another $1.3 million judgment debt to a Spanish company, INSOFOTON SA, for a breach of contract, Mr Samuel Okudzeto Ablakwa, Deputy Minister of Information has said.
Speaking to journalists on Tuesday in Accra, the Deputy Minister said the Company was contracted in September 2005 to provide solar PV powered water pumping and irrigation systems in remote rural areas in Ghana under the second Ghana-Spanish Financial Protocol.
Mr Ablakwa said however that INSOFOTON SA’s contract was abrogated and subsequently INCATEMA INDENMA, another Spanish firm, was awarded the contract to provide the pumping and irrigation systems.
INSOFOTON SA in a letter from its lawyers protested over the breach of agreement by the ministries of Food and Agriculture (MoFA) and Energy.
In the said letter, the company indicated its intention to commence legal action against the two ministries. Subsequently, it notified the Attorney General office’s to claim specific and general damages for breach of contracts.
The then Attorney General, Mr Joe Ghartey in response to INSOFOTON SA‘s letter, indicated that the NPP Government was in breach of contract with INSOFOTON SA and that the Company was entitled to special and general damages and interest on the said amount at the prevailing bank rate from the time of breach till the day of judgment.
According to Mr Ablakwa, Mr Ghartey’s letter therefore advised the then government that any law suit arising out of the matter would be detrimental to government and consequently, a substantial financial burden could be imposed on government.
In the said letter, Mr Ghartey recommended that to avoid a lawsuit by INSOFOTON, government was to try and reach an amicable settlement with them.
Government, however, ignored the said advice and ISOFOTON sued government.
Therefore, on October 10th 2008, INSOFOTON proceeded to Court and the State entered appearance. Both parties agreed to accept the payment of $1.3 million out of which MoFA agreed to pay $850,000, while the Ministry of Energy agreed to settle $450,000.
The Court, therefore, entered into a consent judgment. Based on that Mr Ablakwa said government had so far paid one third of the judgment debts and it was finding ways to defray the rest.
“In the spirit of transparency and accountability, government has decided to come out with all judgment debts to put the ongoing national discourse into its proper prospective”, Mr Ablakwa indicated.
Source: GNA