At a meeting with the Mines and Energy Committee, Wednesday, over the issue, Hon. Hammond said issues of misrepresentation on the part of the Africa & Middle East Resources Investment Group (Ameri Group) informed his decision to move the motion for the House to rescinds its decision over the deal.
MP for Adansi Asokwa and former Ranking Member of the Mines and Energy Committee of Parliament, K. T. Hammond has strongly put up a defense why Parliament should rescinds its decision over the approval of the controversial US$510million Ameri Energy agreement.
Parliament on March 20, 2015, approved the contract agreement for a Build, Own, Operate and Transfer (BOOT) between the Government of Ghana and Ameri Energy.
In a ten page document read before the Committee which was boycotted by the Minority members, Hammond alluded to the fact if the Mines and Energy Committee of which he was the Ranking Member during the Sixth Parliament were presented with full disclosure of information about the deal the country entered into with Ameri Energy, Ghana would have got value for money and wouldn’t have ended up paying Ameri Energy for US$150million for no work done.
The agreement was for the provision of 250MW fast track power generation solution by the installation of ten (10) GE TM 2,500 + aero derivative gas turbines in Ghana. The agreement was dated February 10, 2015.
Per the dictates of the agreement, Ameri Energy was to deliver, install and commission the ten (10) GE TM 2,500 + aero derivative gas turbines; operate, maintain and repair the equipment in accordance with the manufacturer’s instructions and prudent industry practice; ensure that the equipment is operated by qualified operators; be responsible for scheduled overhauls of the equipment as requested recommended by the manufacturer; provide on-site practical training to qualified and experienced employees six months prior to the end of the term of the agreement; and grant to the State access to the plant on biannual basis for the purposes of inspection of the site, the equipment and maintenance of records among other things.
The agreement had a clause that made room for Ameri Energy to assign their obligations to any of their subsidiaries or affiliates. However, such assignment required the prior consent of the Government of Ghana.
The said provision made it clear that if such an assignment was permitted by the Government of Ghana, then the government would not be relieved of any its obligations under the agreement.
The clause on assignment also provides that Ameri Energy may assign their right to payment under the agreement to its lenders. That means Ameri Energy would resort to borrowing to undertake its obligations.
The period for the agreement is five years with a total payment of US$102million per year.
But two years down the line, Hammond contends that per available documents he has changed upon, it was proper for the House to consider and grants his wish.
“Mr. Chairman, in the last couple of weeks, I have come by some critical information which for me, is a game changer. It is my view that if the committee had been aware of the matters contained in these documents, it would not have recommended to this August House to approve the agreement in question.
Certainly, Mr. Chairman, if I as Ranking Member had been aware of these developments, I would not have seconded the motion for the adoption of the report under any circumstances “, he noted.
He argued that per the documents he has changed upon, Ameri Energy did not provide the fast track power generation equipment by them selves. Ameri Energy, he noted, after the approval of the agreement by Parliament, promptly assigned its rights, interests and obligations under the agreement to an affiliate called Ameri Energy Power Equipment Trading LLC (Ameri Equipment) on March 6, 2015.
He alleged that per the dictates of the documents available to him dated July 17, 2015, Ameri Equipment was established as a sole purpose vehicle set up for the sole purpose of the Build, Own, Operate and Transfer (BOOT) Agreement.
Ameri Equipment, he added, was registered by the Department of Economic Development, Government of Dubai on February 23, 2015, barely thirteen days after Ameri Energy had entered into the BOOT agreement with the Government of Ghana.
Ameri Equipment, he further alleged, did not undertake the construction of the project themselves but rather also assigned its obligations to another company called Power Project SANAYI, a Turkish registered company commonly known as ‘PPR’, according to a document dated September 17, 2015.
This assignment, he argued, did not receive a prior consent of the Government of Ghana “as it should done for validity”.
“Mr. Chairman, Ameri Energy and Equipment did not raise any loans from any bank. Indeed, Ameri Energy and Equipment did not raise any capital from their own internal resources. They raised nothing on their own. The two separate agreements dated July 17 and September 17, 2015 and made between Ameri Energy, Ameri Energy Power Equipment Trading LLC and Power Project SANAYI of Turkey demonstrates clearly that neither Ameri Energy nor Ameri Energy Power Equipment had any intention to raise any loans for the project. Mr. Chairman, the agreement dated July 17,2015, is an EPC Deferred Payment Faulty Agreement.
It required. Power Project SANAYI of Turkey to provide the required financing for the implementation of the project.
Neither Ameri Energy nor it’s affiliate, Ameri Energy Power Equipment bore any financial risks whatsoever”, he explained. He added “These fixed sum agreed under this contract for the construction, commissioning, operation, maintenance and overall management of the project was US$360million.
For the EPC project cost, the agreement of July 17,2015 defines these costs to mean all costs that relate to engineering, procurement, construction and commissioning of the project under the EPC and O&M&M contract amounting to US$300million. For the O&M&M costs, the agreement defines these as the amount of US$60million as provided for in the O&M&M agreement.
The agreement was a Deferred Payment Facility Agreement and it provided for the terms and conditions for the repayment of the EPC Deferred payment amount. This facility was to be repaid to PPR in sixty equal monthly installments, commencing from the time the Government of Ghana initial payment to the Ameri Energy/Power Equipment under the BOOT agreement. It was PPR which bore all the financial risk. It was PPR which daises the required capital and undertook the EPC work.
PPR was paid on monthly basis out of the monies the Government of Ghana was obligated to pay under the actual BOT agreement approved by this House. PPR was to be paid an overall fixed sum of US$360millio. And for doing basically nothing, and taking no financial risk, Ameri Energy made a whopping killing of US$150million in one fell swoop at the expense of the poor tax payers of this country. This is not what was represented to the Mines and Energy Committee.”