Godfred Yeboah Dame
THE HUGE judgment debt ordered by the Permanent Court of Arbitration, London, UK, to be paid by the Government of Ghana, to a private independent power producer for the abrogation of a contract between the two parties, has started another round of intense ‘fight’ between the ruling NPP and the opposition NDC.
Per the court’s ruling, the government is supposed to pay $134 million, plus costs of over $3 million, making it about 138 million with interest to Ghana Power Generation Company (GPGC), under the United Nations Commission on International Trade Law (UNCITRAL) rules over the cancellation of the deal.
A heated argument has since ensued between the NPP and the NDC over which regime should be blamed for the huge financial loss caused to the state.
There are emerging details about how the whole deal was entered into during the tenure of the Mahama-led NDC administration.
In February 2015, the GPGC entered into negotiations with the Government of Ghana for the provision of 107mw of power as a way of a fast-track power generation solution when dumsor was at its peak.
It is turning out that the GPGC and its local partners used the address of the private law firm belonging to then Deputy Attorney General in the Mahama-led NDC administration, Dr. Dominic Ayine, to register the company.
The negotiations was led by another member of the NDC legal team, Dr. Abdul Bassit Aziz Bamba, who was working in Dr. Ayine’s law firm called Ayine & Feli, based at East Legon, Accra.
Dr. Ayine has confirmed to Paul Adom Otchere, host of ‘Good Evening Ghana’ on Metro TV, via a text message that GPGC used his law firm’s postal address in the agreement but added that he had absolutely nothing to do with the deal.
He said Dr. Bamba used the law firm’s address for the registration of the company but he (Bamba) later left the firm to form his own law company.
Interestingly, the Mahama administration’s own Power Purchase Agreement Committee, inaugurated by then Ministry of Power on September 29, 2016, established that there was excess capacity and if the agreements were not reviewed, the nation was going to spend a whopping $586 million on excess capacity annually.
The Inter-Ministerial Committee (the PPA Committee) was tasked to review the financial and legal implications of PPAs executed by the NDC Government. This was because, as is apparent from the report of the committee, the NDC Government had realised that the execution of the PPAs (most of which were not needed), would result in excess supply and/or financial loss.
The committee’s work concluded with a report recommending termination of some PPAs in order to “avoid payment of high excess capacity costs.”
On August 28, 2017, the Attorney General and Minister for Justice, Gloria Akuffo, presented an opinion to the Ministry of Energy recommending the termination of the GPGC Agreement based on the Report of the PPA Committee and in November, 2017, then Minister for Energy, Boakye Agyarko, reported to Parliament, among other things, that, the PPA Committee set up in September, 2016, had recommended that 11 PPAs, including GPGC’s EPA, should be terminated.
By a letter dated February 18, 2018, the Minister for Energy terminated the GPGC EPA and on August 13, 2018, GPGC commenced arbitration proceedings.
Arbitration proceedings were vigorously contested by the government which was represented by the law firm of Amofa & Partners as well as the Office of Attorney General.
Full hearing was conducted virtually in August 2020.
On January 26, 2021, the arbitral tribunal (the London Court of International Arbitration) delivered its decision awarding to GPGC the sum of $134,348,661, interest on the amount from November 12, 2018 and $309,877.74 in costs.
The government, even though the grounds for a challenge of the arbitral award did not really seem plausible, was interested in testing the soundness of the award and as a result, a London based law firm, Omnia Strategy LLP headed by Cherie Blair CBE QC, represented to government that it could file a challenge for Ghana.
Towards the end of February, 2021, Omnia obtained leave of the High Court, London, to file the challenge. By the terms of the order granted, they were to file a challenge by March 8, 2021.
However, on March 7, 2021, they indicated to the government that the grounds for a challenge of the award did not exist in the circumstances of the case and therefore, they could not file the anticipated challenge and advised the government to settle the award and that they could assist to settle the award.
Godfred Yeboah Dame was appointed Attorney General on March 5, 2021, long after the arbitral award had been given on January 26, 2021 and just about the time that Omnia Strategy LLP had failed to file the challenge.
Appointed Attorney General on March 5, 2021, the first working day for Mr. Dame was March 9, 2021 as March 6 fell on a Saturday and thus, March 8, 2021 was also a holiday.
Not convinced by Omnia’s decision not to file a challenge of the award, when Mr. Dame was appointed on March 5, 2021, he instructed the firm of Volterra Fietta to institute a challenge of the arbitral award at the London High Court although the government had already had an extension of time “wasted” by Omnia Strategy LLP headed by Cherie Blair QC by the time Mr. Dame was appointed Attorney General.
By April 2021, the new lawyers, Volterra Fietta, had filed an application seeking the grant of an extension of time within which to file a challenge of the award.
Grounds For Challenge
The grounds for the application among others, were (i) the arbitral award was delivered at a time when GoG had no Attorney General (January 26, 2021) (ii) an Attorney General was appointed after exhaustion of the parliamentary approval process on March 5, 2021 (iii) the effect of the COVID-19 pandemic on a developing economy as Ghana’s, had a toll on the bureaucratic process of Ghana.
The London High Court refused to grant the extension of time.
In the ensuing heat, Mr. Dame has confirmed that they are taking steps to probe the circumstances of the whole agreement and how the debt occurred.
“Since there is a financial loss, it means there was a criminal liability so we are going to refer part of the process for examination by the CID for a probe,” he said on Asempa FM in Accra on Thursday, adding “We could have avoided the debt but for the conduct of certain public actors. They should have considered whether the agreement was necessary or not, enquire and refer to the appropriate authority for investigations.”
He added that the probe is not targeted at any individual or personality but to serve a national interest and bring clarity to the issues.
Former Energy Minister, Boakye Agyarko, who supervised the abrogation of the contract, justified the government’s decision to terminate the power agreement.
According to him, the country would have lost more from excess power generation if the agreement had remained and insisted that Ghana is “better off” with this judgment debt.
“We have paid almost over $1 billion for excess capacity. The review committee estimated that the contract as they were if they were allowed to stand, the country will be paying at the end of the 13th year $7.2 billion in excess capacity charges. Now if the country is going to be saddled with $7.2 billion for excess capacity, we needed to rethink. In the PPA review, what it said was that if we could get the termination and the management of all the excess capacity, the liability that we will be faced with is about $600 million out of pocket,” he told Citi FM in Accra on Thursday.
“Now $600 million in year one compared to $7.2 billion, now even if you do the next present value calculation and bring the $7.2 billion into a one-year payment, we are still better off. I don’t understand why the people in whose time these excess capacity contracts were signed now have the guts and the audacity to accuse people who are trying to manage the mess they created,” he added.
Former Power Minister, Dr. Kwabena Donkor, commenting on the matter, called the bluff of Attorney General that he is going to probe the matter.
He said on Joy FM that he is ready to face the investigative bodies over the contract he entered into with GPGC.
“I am a law-abiding Ghanaian. If the CID says they want to investigate something, what do I have to hide?” he quizzed, adding “I will go to the CID. This is not the first time I have been called to the CID.”
Dr. Donkor also questioned the basis under which the agreement was cancelled by government and said Mr. Dame is trying to find a scapegoat.