The Minority in Parliament has expressed disquiet over what it describes as “the inflation of the cost of supply of electrical materials and equipment by about nine million dollars” for a rural electrification project.
The Minority made their protest in a debate on the floor of the House over the approval of the commercial contract of 92 million Dollars for the supply and erection of electrical materials and equipment for the electrification of 556 communities in the Eastern, Volta and Northern Regions.
The China Hunan Construction and Engineering Group, is to execute the project, with Smartty’s Management and Production Limited, being its local representative.
The local company has been embroiled in controversy for overpricing the rebranding of the 116 buses of Metro Mass Transit Limited, which it undertook last year.
The Minority side said the Government had questions to answer in relation to transparency for dealing again with a company, which had credibility issues in recently.
The contract is being funded from a $98 million credit facility agreement between the Government of Ghana and the Industrial Commercial Bank of China Limited.
The Minority said its inquest showed that the deal was initially overpriced by $22 million but it was negotiated downwards to nine million dollars after the Crown Agents, which was employed by the Ministry of Finance to value the contract, detected the irregularity.
Dr Anthony Akoto Osei, the MP for Old Tafo, argued that Smarttys had not “purged itself” of the fraud of overpricing the rebranding of buses and it should not have been involved in any Government contract.
“The dust has barely settled after their involvement in a similar fraudulent deal and they are now involved in the negotiations in this China Hunan Deal… Is the Government now satisfied with the misdeeds of the company?” he asked.
Dr Akoto, who is the Minority’s Ranking Member on Finance, said he wondered why the Mines and Energy Committee of Parliament hid the fact that Smarttys was involved in the China Hunan deal, and stated that but for the vigilance of the Minority, that fact would not have come out.
He said the Mines and Energy Committee had been derelict in their duty and should thus withdraw its report on the Credit facility to the House, and put in every relevant detail pertaining to the contract, to reflect Smarttys as the local representatives of the China Hunan Construction Group, to enable the House to know the full details of the agreement.
The Minority Leader, Osei Kyei-Mensah-Bonsu, who also raised issues with the deal, said the Government should have included lawyers in the negotiations to avoid the problems cropping up, adding that, Parliament ought to engage independent consultants to look into every contract signed by the Government.
“We must exercise proper oversight over the Executive to ensure that the nation is not unduly short-changed in such contracts,” he said.
“I would think that if this matter had happened way back and the company had sufficiently purged itself…but four days after this re-branding matter came up then we have this in Parliament, just four days, then it was reintroduced by way of the relaying of the reports.”
He explained that the Minority Legislators were not against Smarttys, as local company, or local companies in general, but said, “Smarttys’ involvement in certain contracts are unholy and questionable, that is all.”
The Deputy Power Minister, Mr John Abdulai Jinapor, who was in the House, argued that though the contract had indeed been overpriced, the price had been negotiated down from $22.7 million to $9 million.
He, however, said the “nine million dollars was deemed as “cost saving” and explained that it would be used to expand the project and ensure that many more communities benefitted.
The Minister for Roads and Highways, Alhaji Inusah Fuseini, said to ensure value for money in every contract, it was normal for the Government to call for auditing because most contractors liked to reap huge profits from projects assigned to them.
He said the Government should rather be commended for engaging in an audit of the contract and saving Ghana the Nine Million Dollars for further works on the project.
In December last year, the Chief of Staff, Mr Julius Debrah, requested the Attorney General and Minister of Justice to recover from Messrs Smartty’s Management Limited, a total of GH¢ 1.9 million.
According to Mr Debrah, the money was an excess payment made for the spraying and branding of 116 new buses procured for the Metro Mass Transit Company Limited to the company.
A statement issued by the Media Office, Flagstaff House Communications Bureau, Office of the President, said the Chief of Staff made the request upon receipt of the Attorney General’s report on the spraying and branding of buses.
The Chief of Staff requested the Attorney General to conduct an urgent review of the contract following concerns raised about the cost of the spraying and branding exercise.
In her report, Mrs Marietta Brew Appiah-Opong found that there were no cost comparisons to what was submitted by Smartty’s Management because of the method of procurement and the procedures used.
The report noted that the procurement method did not also ensure value for money.
“Independent consultations made by the Attorney General with some leading motor firms in the country confirmed that the contract would have been executed at a cheaper cost if other bids were considered and price comparisons made,” it said.