��Sequence Of Events Leading To Joe Ghartey�s August 1, 2006 Letter �Terminating� The April 26, 2006 Contracts!
Waterville Holdings Limited (BVI) has been trying to explain why it (Waterville) made a claim on the Government of Ghana (GoG) for �damages for breach of contract� among other reliefs, �after a majority of the procurement process of materials and equipment was completed by Waterville and substantial progress made by Waterville in progressing the rehabilitation of the three stadia, the government decided to cancel its contract obligations with Waterville, on August 1, 2006�.
Waterville contended that �as a consequence of expenditure already made by Waterville at the time of the government�s cancellation of the contract, Waterville made an immediate claim for reimbursement of the amounts it had already spent towards its execution of the contract��
Insisting that there had been �nothing illegal or improper about Waterville�s actions, or decisions in competing for, executing or laying claims for cancellation of the contracts to construct and refurbish five stadia�, Waterville underscored that it �only sought full compensation for the work it did and the losses it incurred as a result of the government�s actions in canceling its contract�.
It was within this context that Waterville was able to get the Mills Administration via a mediation process in 2010, to concede that the Kufuor Administration had illegally terminated �contracts for the rehabilitation of Ohene Djan, Baba Yara and El-Wak Stadia awarded to Waterville Holdings (BVI) Limited on 26th April, 2006��, and on basis of which the sole mediator, Lawyer Ekow Awoonor recommended the payment of Euro 10 million for the �purported termination of the contracts� under reference.
However, official records available to The New Crusading GUIDE, vindicate the reasons given by former Attorney General, Joe Ghartey in his August 1, 2006 letter to Waterville, �terminating� the April 26, 2006 Contracts; a decision Waterville and the Mils Administration including the sole mediator and the EOCO appear to accept as amounting to an illegality and a violation of the Public Procurement Law!
The records show a manifest failure of Waterville to perform the financial engineering services required of it in the April 26, 2006 Contracts; a situation which informed the decision of the Kufuor Administration to �terminate� the contracts as expressed in Joe Ghartey�s letter (see Tuesday, March 14, 2012 edition, page 2 of The New Crusading GUIDE for the details).
�Having regard to the undeniable fact that time is of essence, Government of Ghana finds that it has no option but to raise the funding itself. Since you are unable to satisfy the fundamental condition that influenced Government of Ghana�s decision being engineering the funding, Cabinet cannot approve the contracts and therefore the contracts cannot be effective�, Joe Ghartey told Waterville.
And yet six years down the line, come March 12, 2012, Waterville holds a Press Conference to tell the whole world that a �majority of procurement process of materials and equipment was completed by Waterville and substantial progress made by Waterville in progressing the rehabilitation of the three stadia, the government decided to cancel its contracts obligations with Waterville on August 1, 2006�.
In spite of the above claim by Waterville, a July 7, 2006 Cabinet Sub-Committee Report published on page two (2) of this edition shows that at a meeting with Government on the same day (July 7, 2006), the representative of Waterville at the meeting, Mr. Andrea Orlandi, incidentally the man who read the Waterville press statement on March 12, 2012, �pointed out that in view of the urgent nature of the project and the delay in securing funds, it decided to request GoG to seek for bridging finance�.
Government�s response was to the effect that the new arrangement being proposed by Waterville �WAS CONTRARY TO THE CONTRACT AND AS A RESULT CANNOT BE PASSED BY CABINET AND THE PARLIAMENT OF GHANA�.
A decision was therefore taken by Government to seek bridge finance of an amount of US$23,282,115.14 on its own to finance the project while it (GoG) waited for the entire project fund to be secured by Waterville.
Interestingly, earlier in a June 21, 2006 letter to the Minister of Finance & Economic Planning, the same Andrea M. Orlandi, had informed the Government that the anticipated main source of funding it (Waterville) was relying on �Bank Austria, as you may aware, withdrew from the projects�.
The Kufuor Administration�s decision not to proceed any further with the April 26, 2006 contracts with Waterville was thus informed by a series of manifest failures on the part of Waterville to fulfil the conditions precedent of the Contracts under reference.
Readers are entreated to study the contents of the July 7, 2006 Cabinet Sub-Committee Report published under the headline FOCUS ON �WATERVILLE CONTRACTS� (2), for a deeper insight into the issues at stake, and stay tuned for more revelations on �Waterville�s Duplicity� relative to the CAN 2008 contractual obligations and payments for the stadia projects.
FOCUS ON �WATERVILLE CONTRACTS� (2)
...REPORT OF THE CABINET COMMITTEE ON THE REHABILITATION AND UPGRADING OF THE ACCRA AND KUMASI SPORTS STADIA
*1.0 INTRODUCTION:
*1.1 At its meeting held from 28th -29th June, 2006, Cabinet considered a memorandum jointly submitted by the Ministers of Finance and Economic Planning and Education, Science and Sports.
*1.2 The memorandum sought Cabinet�s approval for a short term credit facility of US$23,282,115.14 from the Merchant Bank, Ghana Limited for the rehabilitation and upgrading of the Accra and Kumasi Sports Stadia.
*1.3 Cabinet recalled that the original understanding was for Waterville Holding (BVI) Limited to source for their own funding for the Project including 30% of the total contract sum as �bridge finance�. Cabinet was therefore at a loss as to why the memorandum indicated that the loan agreement was between the Government of Ghana and the Merchant Bank, Ghana Limited.
*1.4 Cabinet therefore appointed a Committee to meet with the contractors and stress the position of Government including the fact that the project shall be pre-financed by the contractors.
*1.5 The Committee comprised:
* Minister of Parliamentary Affairs - Chairman
* Minister for National Security
* Minister of Local Government, Rural Development and Environment
*2.0 MEETING WITH REPRESENTATIVES OF MICHELETTI & CO AND CONSAR LIMITED:
*2.1 The Committee met representatives of Michelleti & Co. and Consar Limited, contractors working on the Accra and Kumasi sports stadia respectively on Wednesday 5th July 2006. They were J. Castagna for Michelleti & Co. and S. Ramella for Consar.
*2.2 THE CONTRACTORS INDICATED THAT THEY WERE ACTUALLY DOING EVERYTHING INCLUDING CONSTRUCTION, PROCUREMENT AND DRAWINGS. THEY STATED THAT FINANCING OF TWO (2) PROJECTS WERE TO BE FROM WATERVILLE (BVI) .
*2.3 The Committee informed the contractors on the new position of Waterville. That is, for Ghana Government to seek a short term credit facility of US$23,282,115.14 from the Merchant Bank as bridge financing for the two projects, when the general conditions of the contract provided that Waterville sought a 30% of the total contract sum as bridge finance.
*2.4 THE CONTRACTORS REVEALED THAT THE TOTAL COST OF THE PROJECT WAS 10% LESS WHAT WATERVILLE WAS CHARGING. IN OTHER WORDS, 10% OF THE TOTAL COST OF THE PROJECT AS STATED IN THE CONTRACT WENT TO WATERVILLE FOR BEING THE FINANCIERS.
*2.5 THE CONTRACTORS THEREFORE AGREED THAT IN THE EVENT OF GOVERNMENT OF GHANA FINANCING THE PROJECT, THE TOTAL COST WOULD BE LESS BY 10%.
*3.0 MEETING WITH WATERVILLE HOLDING (BVI) LIMITED:
*3.1 The Committee again met with a representative of the Waterville Holding (BVI) Limited, A.M. Oruandi on Friday, 7th July 2006. Also present was a representative of Micheletti, E. Taricone.
*3.2 THE REPRESENTATIVE FROM WATERVILLE POINTED OUT THAT IN VIEW OF THE URGENT NATURE OF THE PROJECT AND THE DELAY IN SECURING FUNDS, IT DECIDED TO REQUEST GOG TO SEEK FOR THE BRIDGING FINANCE.
*3.3 The Committee pointed out that the arrangement was contrary to the contract and as a result cannot be passed by Cabinet and the Parliament of Ghana.
*4.0 DECISIONS:
*4.1 The Committee agreed with Waterville Holding (BVI) Limited that:
*4.1.1 Everything possible must be done to ensure the continuation and completion of the project on schedule.
*4.1.2 GOG SHOULD SEEK BRIDGE FUNDING OF AN AMOUNT OF US$23,282,115.14 ON ITS OWN TO FINANCE THE PROJECT WHILST GOG WAITED FOR THE ENTIRE PROJECT FUND TO BE SECURED BY WATERVILLE.
*4.1.3 A new agreement should be made between GoG and Waterville to replace the current MOU and Contract.
*4.1.4 Waterville would have the sole responsibility for sourcing of the funds necessary for the project. When Waterville secured the funds the bridge funding would be reimbursed from those resources.
*4.1.5 AGREEMENT TO BE MADE BETWEEN GOG AND THE TWO(2) BUILDING CONTRACTORS, THAT IS MICHELETTI AND CONSAR TO ENABLE PAYMENTS TO BE MADE DIRECTLY TO THEM, AFTER CERTIFICATION, FROM CREDIT OBTAINED BY GOG.
*4.1.6 Work done at the two (2) sites was to be quantified by consultants to the project to be appointed by GoG.
*4.1.7 Waterville to indicate in the agreement to be prepared by the Attorney-General the period to expect the financing from Waterville for project.
*4.1.8 Waterville was to be a financial intermediary and that any expenditure so far incurred by Waterville would be paid under the new arrangement.
*5.0 CONCLUSION:
*5.1 GOG SHOULD BE IN READINESS TO FINANCE THE WHOLE PROJECT IN THE EVENT OF THE INABILITY OF WATERVILLE TO SECURE FUNDING.
*5.2 This had been brought to the attention of the Minister of Finance and Economic Planning, and had assured that arrangement could be made to secure at least US$25million from GoG resources as a matter of urgency.
FELIX OWUSU-AGYAPONG,
Minister of Parliamentary Affairs,
Chairman, Cabinet Sub-Committee, CAN 2008,
Stadia Rehabilitation & Upgrading,
July 7, 2006.
Source: Special Investigations Team (SIT)/New Crusading Guide/Ghana
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