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Rejection Of Isofoton SA/GoG Agreement…ALTERATION DEFACES CONTRACT   
 
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17-Jul-2012  
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- Says Gov’t Study Group


As the controversy over the issue of judgment debt arising out of the abrogation of a contract between the Government of Ghana (GoG) and Messrs Isofoton SA of Madrid, Spain, deepens, a report by a professional group commissioned by the government to conduct a research into the matter has indicated that an alteration made to the contract defaces it.

The research and field study was to help to determine whether there were indeed commercial contracts between the Government of Ghana and Isofoton SA – for the supply of Solar Powered pump for irrigation to the Ministry of Food and Agriculture as well as Solar Electrification In Ghana Phase II for the Ministry of Energy, and whether the government had breached any of the contracts with the company.

According to the report, the contract, dated 2001 for US$8,811,000, was declared invalid as it could not be enforced under the Procurement Act (Act 663). “The Isofoton Agreement with the Ministry of Energy was denominated in United States Dollars (US$8,811,000) instead of Euros,” it stressed.

The group stated, “We have stated in our Observations the fact that the date of one of ISOFOTON SA’s contracts was altered from July to 22 September, 2005. It was observed that the party who did the alteration duly initiated alongside the alteration. However, his initials were different from those of the Minister of Agriculture and the ISOFOTON SA’s representative who signed the principal Commercial Agreement, and as can be seen on each page of the contract document.

“Also, it is significant to note that the July 2005 date on the contract shows that the contract was signed before the meeting of 9 August, 2005 when the working group of the Beneficiary Sector Ministries met to determine the procedures and parameters for contracts under the protocol. The alteration was possibly made to ensure that the contract fell within the term arrived at the said meeting.”

It underscored that “such significant alteration without an endorsement by the principal signatories of the Agreement defaces the contract and thus, constitutes enough grounds for rejection.”

Furthermore, the report maintained that Isofoton failed to indicate description/types of models of equipment to be supplied and in terms of capacity/output, prices, operation area, among other things. It asserted also that while Isofoton SA contracts were to be funded under the 2nd Ghana-Spanish Financial Protocol, the contracts do not satisfy the terms and conditions laid down in the protocol.

In a letter dated 4 June, 2008, addressed to the Minister of Finance and Economic Planning, the former Attorney-General and Minister of Justice, Hon. Joe Ghartey, noted that “We have studied your letter and various documents submitted by your Ministry and the Ministry of Food and Agriculture and advise as follows: There is a breach of a binding contract with Isofoton SA and which entitles them to (1) Special damages (2) General damages (3) Interest at the prevailing bank rate from time of breach till the day of payment.”

The report described the former A-G’s letter as “misleading” and “unfortunate” adding that “the contract did not meet the requirements that had been spelt out under the Public Procurement Act 2003 (Act 663). Simply, an illegal activity could not have been enforced under the law.”
 
 
Source: Peter Atiemo/New Crusading Guide/Ghana
 
 

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