$12m Pwalugu dam payment was for mobilization – GIDA

The $12 million that was given to the contractor working on the Pwalugu Multipurpose Irrigation Dam project, according to the Ghana Irrigation Development Authority (GIDA), was only a mobilization payment.

The contractor, Messrs Power Construction Corporation of China (POWERCHINA), was to receive payment of US$48.5 million as a mobilization fee once the contractor was able to provide “advance payment guarantee from a reputable bank,” according to a press release issued by GIDA on Tuesday, May 28.

According to the authority, the $11.9 million that has been paid thus far amounts to approximately 25% of the total mobilization cost stipulated in the contract.

GIDA further argued that the government was at no point, at risk by approving the payment and that “contrary to the claim that no work has been done, the contractor has delivered both preconstruction documents and some physical works (camp and access roads).”

Edward Bawa, the Member of Parliament for Bongo, addressed the media and called for the prosecution of all individuals involved in the approval of the $12 million payment. However, GIDA insists that “no frivolous payments have been made and the USD11.9 million paid to the contractor was fully covered by a Bank Guarantee valued at USD60.7 million. All payments made were for specific activities executed under contract.”

Meanwhile, the minority members of Parliament’s Works and Housing Committee have expressed concerns about the payment after visiting the project site last week to assess the progress of work done.

The authority clarified that the terms of the contract were holistically followed after the contractor provided the advance payment guarantee from Stanbic Bank.

“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 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 emphasised.

Furthermore, John Abdulai Jinapor, the ranking member of Parliament’s Mines and Energy Committee, has made it clear that the next NDC government will see to it that anyone found guilty of any malfeasance in this case is held accountable.

Read the full statement below:

Source: Ghanatodayonline.com