� Govt/AAL Agreement Not �Conventional Contract� � Parliamentary Official Report -Nov.8, 2001
�MR. Speaker, the only document we have here in the form of an agreement indicating the terms and conditions of everything is dated 10th of January, 2000. And as far as I am concerned, they were not conventional contracts which you and I are aware of, where witnesses and others are around. So if these are things of that nature, as at now we have not laid hands on them.�
The above quotation was a statement made on the floor of Parliament by the late Mr. Kwadwo Baah-Wiredu, the then Minister of Local Government and Rural Development (MLGRD) in response to a question posed to him by Mr. Kosi Kedem, former Member of Parliament (MP) for Hohoe South Constituency on whether or not there was a signed contract between the Ministry (MLGRD) and African Automobile Limited (AAL), which was unilaterally abrogated.
Mr. Baah-Wiredu�s reaction was captured in a Parliamentary Hansard on November 8, 2001, titled �Urgent Questions: Ministry of Local Government and Rural Development� by a legislator (Mr. Emmaneul Adjei Boye) on the terms of agreement for the purchase of 110 Galloper Station Wagons and 10 Sanitation Vehicles by the Ministry from AAL.
The purchase of the vehicles was to provide logistic support to the District Assemblies to replace old vehicles allocated to the District Chief Executives (DCEs) in 1994.
According to Mr. Baah-Wiredu, originally, the total cost of the 110 Gallopers was US$3,322,000.00. But the price was adjusted upwards by the company to US$3,355,000, which the Ministry paid a deposit of �8 billion in two tranches - �2 billion on June 5, 2000 and �6 billion on October 22, 2000, remaining with a balance of �13.3 billion due to AAL.
He said the company (AAL) supplied only 23 vehicles out of the 110 ordered, saying the 23 vehicles were allocated to the District Assemblies. Again, AAL�s non-fulfillment of contractual obligation was exposed by the Ministry, after paying deposits of �3.5 billion (US$500,000) on June 5, 2000, and �1.3 billion paid on November 13, 2000, for 10 sanitary equipment, which the company failed to deliver.
Mr. Baah-Wiredu alerted Parliament that the 23 Gallopers allocated to the Assemblies were noted to be of �poor quality and certainly not strong and robust enough for the work of a District Chief Executive and the terrain in which they would be working�, adding that �based on the field reports from the districts, we concluded that these vehicles are not in the best interest of the nation.�
�In the course of our interaction, we actually stated that we preferred getting more robust and suitable vehicles like Nissan or Toyota pick-ups to perform the functions which we have assigned to the areas these vehicles are to go�, Baah-Wiredu underscored.
He further submitted that MLGRD wrote to abrogate its contract with AAL on September 28, 2001, highlighting on their failure to honour its contractual obligation and requested the company to refund the total deposit of ؓ�13 billion by October 15, 2001, including payment of appropriate interest on the outstanding balance.
Please turn to page two for the full text of the parliamentary proceedings on the matter during a question and answer session on November 8, 2001, and stay tuned for more official disclosures on the AAL Gallopers saga.
URGENT QUESTION FOR MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT ON 110 GALLOPER STATION WAGONS AND 10 SANITATION VEHICLES
�PARLIAMENTARY DEBATES (OFFICIAL REPORT), THURSDAY, 8TH NOVEMBER, 2001
*Mr. Abraham Ossei Aidooh (on behalf of) Mr. Emmanuel Adjei Boye asked the Minister for Local Government and Rural Development whether it is true that his Ministry under the previous administration ordered 110 Galloper Station Wagons and 10 Sanitation Vehicles for which over �14 billion had been paid to African Automabile Ltd., the local agents of Mitsubishi vehicles, for the delivery of these vehicles almost three year ago, and if so what measures are being taken to retrieve the money or get the vehicles delivered?
*Minister for Local Government and Rural Development (Mr. Kwadwo Baah-Wiredu): Mr. Speaker, to start with, the total amount paid to Messrs African Automobile Limited is �13 billion and not �14 billion as stated. The schedule of payment will be provided.
Mr. Speaker, as part of its efforts to provide logistic support to District Assemblies, the Ministry of Local Government and Rural Development ordered 110 4-wheelo drive Hyundai Galloper II Station Wagons from Messrs African Automobile Limited to replace vehicles allocated to the District Chief Executives in 1994.
Mr. Speaker, under a trading agreement with Messrs African Automobile Limited, the District Assemblies were to surrender their Pajero vehicles to the company at values to be determined by the State Transport Corporation, to offset some of the cost of the Galloper II to be supplied. Twenty-two of the old vehicles were surrendered, except that of Akatsi district because it had broken down.
Mr. Speaker, originally, the total cost of the 110 Gallopers was US$3,322,000. But in October, 2000 the price was adjusted upwards by the company to US$3,355.000. Out of the total amount, the Ministry has so far paid the company a deposit of �8 billion in two tranches - �2 billion on 5th of June 2000 and � 6 billion on 22nd October 2000 � (Interruption.)
*Mr. Speaker: Hon. Minister, in view of the fact that we have no printed Answers, when it is a billion, pronounce it well for us to hear, otherwise people will think it is a million. The two are very confusing, when you are speaking it out.
*Mr. Baah-Wiredu: Thank you, Mr. Speaker. ON THE 9TH OF OCTOBER 2000, THE COMPANY, IN A LETTER, PROMISED TO DELIVER 60 UNITS OF THE VEHICLES BY 10TH NOVEMBER, 2000 AND THE REMAINDER WITHIN TWO WEEKS THEREAFTER. THIS PROMISE WAS NOT FULFILLED.
Mr. Speaker, as at today, the company had supplied only 23 vehicles out of the 110 vehicles ordered. The 23 vehicles were allocated to the District Assemblies; and I think it will please all of us to know which districts received them.
Mr. Speaker, the list is as follows: East Mamprusi district � Northern Region; Nanumba district � Northern Region; South Tongu district � Volta Region; Krachi district � Volta Region; Afram Plains district � Eastern Region; Kwaebibrim district � Eastern Region; Dangme West district � Greater Accra; Mfantsiman district � Central Region; Twifo-Hemang-Lower Denkyira district � Central Region; Adansi East district � Ashanti Region; Ejura-Sekyedumasi district � Ashanti Region; Bawku West district � Upper East Region; Bongo district � Upper East Region; Kintampo district � Brong Ahafo Region; East Gonja district � Northern Region; Sissala district � Upper West Region; Jirapa/Lambussie district � Upper West Region; Juabeso Bia district � Western Region; Aowin-Suaman district � Western Region; and Akatsi district � Volta Region. So that gives us the twenty-three districts which received them.
Mr. Speaker, the balance due to the suppliers, African Automobile Company is therefore �13.3 billion, about US$1.9 million.
Mr. Speaker, besides the Gallopers, the Ministry ordered the underlisted sanitary vehicles/equipment from the same company at a total costs of �6,118,000,000 equivalent to US$874,000:
1.2 Hyundai Skip loaders
2.3 Hyundai Septic Emptiers
3. 60 roll-on/roll-off refuse containers.
Mr. Speaker, the Ministry on 5th of June, 2000 again paid a deposit of �3.5 billion, which is equivalent to US$500,000. And then later, an amount of �1.5 billion was also paid on the 13th of November, 2000 as part payment for those sanitary equipment. SO FAR, WE HAVE RECEIVED NOTHING FROM THAT COMPANY, WITH REGARD TO THE SANITARY EQUIPMENT.
Mr. Speaker, reports received from the beneficiary districts, which I have just named, indicate that the vehicles are of poor quality and certainly not strong and robust enough for the work of a District Chief Executive and the terrain in which they would be working. We have so far received reports from 18 of the districts and it is only three which indicated that they have no problem.
The rest actually stated that the vehicles are of low quality and they cannot even use them. In fact, one said that the engine broke down even before the first servicing � that is the Mfantsiman district. The other even stated that the engine had broken down completely.
And at Akatsi, where we have not even received the report yet, what we have got now is that it had broken down a very long time ago and it is not being used. So Mr. Speaker, based on the field reports from the districts, we concluded that these vehicles are not in the best interest of the nation, to be used.
In the light of the adverse field reports about the performance of the Gallopers and the fact that the company failed to honour its contractual obligation, a series of meetings involving representatives of the Attorney-General, the Auditor-General, the company and I were held to iron out the contract problems.
MR. SPEAKER, ON 28TH OF SEPTEMBER 2001, THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT WROTE TO ABROGATE THE CONTRACT WITH EFFECT FROM 28TH SEPTEMBER, 2001. IN ADDITION, THE MINISTRY REQUESTED THE COMPANY TO REFUND TO THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT BY 15TH OF OCTOBER, 2001 THE TOTAL DEPOSIT OF �13 BILLION, LESS THE COST OF THE GALLOPERS ALREADY SUPPLIED. AND THEN THEY HAVE TO PAY THE APPROPRIATE INTEREST ON THE OUTSTANDING BALANCE. AND THEN AT THE SAME TIME RETURN TO THE MINISTRY THE 22 MITSUBISHI PAJEROS SURRENDED TO THE COMPANY BY THE BENEFICIARY ASSEMBLIES.
Mr. Speaker, in the course of our interactions, we actually stated that we preferred getting more robust and suitable vehicles like Nissan or Toyota pick-ups to perform the functions which we have assigned to the areas these vehicles are to go.
Mr. Speaker, IT IS INTERESTING TO NOTE THAT IN A LETTER DATED 15TH OCTOBER, 2001, MESSRS AFRICAN AUTOMOBILE WROTE TO ME SAYING THAT THEY HAD ACCEPTED TO SUPPLY MITSUBISHI PAJERO CROSS-COUNTRY VEHICLES INSTEAD OF THE GALLOPER. Already, we have said that we are in the process of sorting out these issues. So I do not know why he wrote this letter; and that they had notified our supplier/principals overseas to book an order for Mitsubishi Pajero 5-door, 4x4 cross-country vehicles for the earliest delivery .
Mr. Speaker, this is not our position, because we need Cabinet approval and technical advice on the vehicles that we would need to supply to the districts.
Mr. Speaker, despite the suppliers� realization of the unsuitability of the Gallopers and despite the receipt of our letter of abrogation, the company again wrote on the 22nd of October, 2001 to inform the Ministry that the remaining 87 Gallopers had arrived at Tema Harbour for clearance. I think our position is clear and I have informed the company that our letter of abrogation still stands. And the Ministry is in the process of arranging for more durable four-wheel drive vehicles for the performance of duties at the district level.
*Mr. E. Adjei Boye � rose -
*Mr. Speaker: Hon, Member for Krowor, I think under normal circumstances you should have lost your right to a supplementary, but we will permit you to do it.
*Mr. Boye: Thank you, Mr. Speaker, Mr. Speaker, these days my car is disturbing me, so � (laughter.) I am sorry.
*Mr. Speaker: Hon. Members, if we say we are to be here at 10.00 o�clock, nobody should use the state of his car as an excuse for not being here at 10.00 o�clock. Because, if you know your car is not reliable, you should find some other ways of making sure you are here at 10.00 o�clock � (laughter.)
*Mr. Boye: Mr. Speaker, I would like to know from the hon. Minister the consultants who gave the specifications for this particular car and the circumstances which led to the ordering of these Galloper vehicles.
*Mr. Speaker: Hon. Minister, are you in a position to answer?
*Mr. Baah-Wiredu: Mr. Speaker, I would just respond that we are not aware of the consultants; and this issue is under investigation. We are doing as much as possible to get all the circumstances surrounding it. So as now, we do not have that information.
*Mr. J. Darko-Mensah: Mr. Speaker, I would like to find out from the hon. Minister whether there was any correspondence between the Ministry of Local Government and Rural Development and the company from 1998, about non-delivery of these vehicles to the Ministry.
*Mr. Baah-Wiredu: Mr. Speaker, the whole transaction started in January, 1999. So there were a lot of correspondence and meetings. There were a lot of other letters and issues which went into the ordering of those vehicles. So as far as I am aware, there has been a lot of correspondence. And since I assumed duty, there has been a lot of correspondence and meetings to iron out some of those problems. So that is the answer.
*Mr. Kosi Kedem: Mr. Speaker, I would like to know from the hon. Minister WHETHER ANY CONTRACT WAS SIGNED BETWEEN THE MINISTRY OF LOCAL GOVERNMENT AND RURAL DEVELOPMENT AND THE AFRICAN AUTOMOBILE LIMITED. AND WHAT ARE THE TERMS OF THE CONTRACT? AND CAN THE CONTRACT BE ABROGATED UNILATERALLY BY THE MINISTRY, AS HAS BEEN CLAIMED BY THE HON. MINISTER?
*Mr. Speaker: Hon. Member, you can ask one question, not three, four-in-one. Hon. Minister, did you sign any contract? Did the Ministry of Local Government and Rural Development sign any contract with the suppliers � African Auto-mobile?
*Mr. Baah-Wiredu: Mr. Speaker, THE ONLY DOCUMENT WE HAVE HERE IN THE FORM OF AN AGREEMENT INDICATING THE TERMS AND CONDITIONS OF EVERYTHING IS DATED 10TH OF JANUARY, 2000. AND AS FAR AS I AM CONCERNED, THEY WERE NOT CONVENTIONAL CONTRACTS WHICH YOU AND I ARE AWARE OF, WHERE WITNESSES AND OTHERS ARE AROUND. So if there are things of that nature, as at now we have not laid hands on them.
*Mr. Speaker: This matter then becomes technical. The lawyers have a definition for contracts. So this may be a matter for the lawyers.
*Alhaji Amadu Seidu: Mr. Speaker, we are aware that the former State Transport Corporation used to be the official engineers for the Government of Ghana. I would want to find our from the Minister, whether upon the receipt of the reports on the technical capabilities of the Gallopers he did consult the official engineers for their version as to the suitability of the vehicles.
*Mr. Baah-Wiredu: Mr. Speaker, what we did was that we got the field reports; and we are in the process of accessing them. As I said, we have 23 in the districts and only 18 � and the latest one is that of Akatsi, which has completely broken down. Then, in my report too, I said that it was State Transport Company which did the initial valuation of the Pajeros, that is, during their term of office. And we are in the process of getting the rest to make sure that the full study can be completed. So in all my answers, I have just been indicating that technical advisers would have to come in.
*Mr. Steve Akorli: Mr. Speaker, I would want a confirmation. The Question on the Order Paper is quoting �14 billion as having been paid for these vehicles; and that they were paid three years ago. In the Minister�s Answer, I heard him quote 8 billion � (interruption).
*Mr. Speaker: No, no! The Minister corrected that figure. The first thing he did was to correct the 14 billion � (interruption.)
*Mr. Akorli: Indeed, it is the confirmation of this figure I want; and then the year. Is he also confirming that the transaction is not over three years?
*Mr. Speaker: Over three years?
*Mr. Akorli: Yes, Mr. Speaker. That is what the hon. Member who asked the Question was demanding.
*Mr. Speaker: Oh, yes. He said, for the delivery of these vehicles almost three years ago. He did not say over three years.
*Mr. Baah-Wiredu: Well, Mr. Speaker, I SAID THAT THE TRANSACTION STARTED EARLY JANUARY, 1999, PAYMENTS WERE EFFECTED ON 21ST JANUARY, 2000; �6 BILLION FOR THE 4X4. AND THEN ON THE 6TH OF JUNE, 2000, �2 BILLION WAS PAID FOR THE SAME 4X4. AND THEN ON THE 6TH OF JUNE, 2000, �3.5 BILLION WAS ALSO PAID FOR THE SANITATION VEHICLES AND THEN ON 13TH NOVEMBER, 2000, �1.5 BILLION WAS PAID MAKING IT �5 BILLION FOR THE SANITATION VEHICLES. THEN THE 4X4, �8 BILLION. AS I SAID, AS AT TODAY THE SANITATION VEHICLES HAVE NOT BEEN DELIVERED. SO THIS IS THE PAYMENT SCHEDULE.
*Mr. E.K.D. Adjaho: Mr. Speaker, I would want to find out from the hon. Minister whether he is aware that the District Chief Executive (DCE) for Akatsi brought his own driver, who was tested by the authorized officers of State and found unfit and unqualified to drive. But he insisted that he should be employed; and that driver had an accident with the vehicle in question for the Akatsi district.
*Mr. Baah-Wiredu: Mr. Speaker, it would have been very good, as a leading Member of this Parliament and a Member of Parliament for Akatsi to have passed on this information to me. As at now, I am not aware of that information.
*Alhaji Ali Amadu: Mr. Speaker, I would like to know from the hon. Minister whether the company has assigned reasons for the non-delivery of the sanitation vehicles.
*Mr. Baah-Wiredu: Mr. Speaker, as at now, we have not got any official position as to why they have not supplied them. But we believe that the time has already passed and we have to get off that contract, because there was another partner who actually supplied his portion of it. So in their case, we have not got the official position yet.
*Mr. Cletus A. Avoka: Mr. Speaker, in the hon. Minister�s Answer to the Urgent Question, he indicated that the Galloper vehicles were found not to be suitable for our roads; and he has made preference for Nissan and Toyota vehicles. May I also know from the hon. Minister, whether he has ascertained the unit price differentials, with regard to the Galloper and the Nissan Patrol, to have informed himself before making the preference.
*Mr. Baah-Wiredu: Mr. Speaker, I think that is a nice question from my hon. good friend. I think in my presentation, I said that we shall get technical advice � and it normally goes with financial advice � and that one will be subject to Cabinet�s approval. And hon. Asaga knows that in all these things, you must consider the technical side and the financial side; and obviously, we would be doing it. (Hear! Hear!)
*Mr. D.Y. Mensah: Mr. Speaker, from the answers given by the Minister for Local Government and Rural Development, it can be assumed that our DCEs have not been facilitated enough to move around their districts, in the absence of reliable vehicles. Mr. Speaker, may I know the impact, which the absence of reliable means of transport is having on the performance of our DCEs?
*Mr. Baah-Wiredu: Mr. Speaker, there is no complete absence of vehicles for the DCEs to work. They have available vehicles, but these are orders from their administration; and we need to make sure that we get them on board. In fact, just less than three months ago, there were vehicles from the Village Infrastructure Programme, which they are sharing with the Directors of the Ministry of Food and Agriculture. So as at now, work will not, and should not, and must not, come to a halt.
*Reginald Niibi Ayi-Bonte: Mr. Speaker, may I ask the hon. Minister whether the twenty-three vehicles supplied were old or new vehicles.
*Mr. Baah-Wiredu: Mr. Speaker, as far as I am concerned, these vehicles were delivered from African Automobile Limited at the time. Whether they were old or new, I cannot actually give the answer here, unless we do the verification.
*Mr. E.K. Salia: Mr. Speaker, from the Answers of the hon. Minister, it is clear that a lot of work still has to be done to determine the full facts concerning this particular order. Is it not the case that by abrogating the contract in advance of the facts, he could be jeopardizing the chance of the Government getting a good deal, as it purports to get?
*Mr. Baah-Wiredu: Mr. Speaker, I wish to assure the House that we are not going to suffer in any way.
*Nii A.D. Mante: Mr. Speaker, may I know from the hon. Minister whether or not there was a delivery date on the so-called unconventional contract.
*Mr. Baah-Wiredu: Mr. Speaker, WE HAD ONE HUNDRED AND TWENTY DAY CLAUSES WITHIN IT. THAT DELIVERY SHOULD BE DONE WITHIN ONE HUNDRED AND TWENTY DAYS, SUBJECT TO PAYMENT. AND IN MOST CASES, I THINK THE CLEARING OF OUR CHEQUES WAS ALSO A VERY BIG PROBLEM, SO THEY TRIED TO NEGOTIATE THEM OUT. BUT THE FINAL DATE ON WHICH THIS DELIVERY SHOULD HAVE BEEN DONE, FOR WHICH THE COMPANY ITSELF SUBMITTED CERTAIN DATES, WERE NOT FULFILLED. SO AS MUCH AS POSSIBLE � (interruption.)
*Mr. Speaker: No, he wants to know whether there was a date.
*Mr. Baah-Wiredu: Yes, there were some dates.
*Mr. Speaker: Hon. Members, that seems to be the end of this Urgent Question. We would them move on to the next business.
Source: New Crusading Guide/Ghana
Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority. |