A Senior Research Associate at IMANI Africa, Dennis Asare, says the Trafigura judgement debt of $140 million could have been avoided.
Speaking on JoyNews’ PM Express, Mr Asare also blamed the Attorney General’s office for ill-advising the government to terminate the power purchase agreement with the Ghana Power Generating Company (GPGC), the subsidiary of Trafigura.
Upon the advice of the Attorney General in 2017, the government terminated the deal on grounds that due to its attendant high tariffs, if implemented, it would have cost the state $115,480,000.
It also cited illegality for want of capacity of [GPGC] to enter into a PPA, failure to obtain siting and construction permits, installation of used plant contrary to policy, and failure on the part of GPGC to fulfil some conditions among others.
But the IMANI Research Associate insists that if the government had done its due diligence this debt which could cost the country some of its assets in the UK would not have occurred.
“You could see that at every point in time, the IPP was trying to find a way to ensure that this agreement went through but the government had already decided from the Power Purchase Agreement Committee’s report that this one must be terminated.
“And so they were looking for opportunities right within the agreement to get off this deal. And you can say it is part of our poor planning as well as the ill advice from the Attorney-General’s office. I see that this is a cost that could have been avoided,” he told the host, Evans Mensah.
Read also: Trafigura judgement debt: Boakye Agyarko must explain contract termination – Kwabena Donkor
The Ghana High Commission building in the UK, which provides visa and other services, the commissioner’s residence, the Ghana International Bank building, and other properties are at risk of being auctioned to defray a $140 million judgement debt awarded to Singaporean firm, Trafigura.
Trafigura, the majority owner of the power company GPGC, secured the award in January 2021 after an arbitral tribunal in London found that Ghana had unlawfully terminated a contract for the installation and operation of two power plants.
The government says the Finance Ministry has taken steps to liquidate the debt, but Ghana’s High Commissioner to the United Kingdom, Papa Owusu Ankomah, believes the financial constraints of the government are to blame for the default in the payment as agreed with the judgement creditor.
Considering that the ruling was given in 2021, Mr Asare believes the government had ample time to negotiate with Trafigura on a payment plan. However, their denial currently puts the Regina House which is the home to the International Bank of Ghana among other crucial assets of Ghana at risk.
“We had the opportunity to negotiate and plan how to pay out the debt and we’ve not been able to do that and currently there is no fund available in terms of mitigating some of the judgement debts that may arise out of the termination of contracts,” he stated.
