GPHA Face Shut Down …Over Dubious MPS Ports Revenue Contract?

Daybreak investigations revel that, while the government certainly needs massive revenue to enable it fund its lofty programmes with a huge chunk coming from our ports, a recent contract ceded to the Meridian Ports Services (MPS) to boost required revenue levels may flounder, if government keeps getting lackadaisical over promptly reviewing the deal.

This is in spite of the fact that the deal was given to MPS on a silver platter by the Mahama administration.

Not quite long ago, cabinet set up a committee headed by the deputy minister of Transport, Daniel Nii Kwartei Titus-Glover to review the contract and present findings to cabinet for decisions to be taken.

In spite of the sense of urgency attached to the deal, cabinet was yet to take a decision the last time DAYBREAK checked even though the report has been submitted.

By the MPS deal, there is supposed to be a reduction in the volume of containers that GPHA will handle in its receipt and delivery (shore handling) operations.

“It will also reduce the revenues from Stevedoring of vessels that will work at Terminal 2 when MPS vacates.”

Additionally, according to the report by the committee titled AN ANALYSIS OF THE IMPACTS OF THE DEED OF AMENDMENT TO THE MPS CONCESSION AGREEMENT, “these clauses and other operational procedures announced by MPS will reduce the volume of containers transferred from MPS to GPHA from 161,768 TUEs to 43,018 TEUs.”

The report adds that GPHA’s shore handling revenue from Terminal 1 and GJT is estimated to decline from US$38.755,278 to US$17,007,125. The impact of the 20% of stevedoring revenues to be collected by MPS for their Surviving Rights is covered under Clause 3.7.

Civil society assessment of the deal, including other organizations like Danquah Institute, agree with the committee’s findings that “this provision will result in a GPHA losing all container vessels to MPS GPHA will be lift with containers on ro-ro vessels. The implication of these is that the volume of containers handled by GPHA (Stevedoring) will decline from 92,539 TEUs to 37,294 TEUs.”

The committee’s report adds that this will result in a reduction of stevedoring revenues from containers from US$10,688,768 to US$4,216,817.30, while the MPS will further take 20 percent (US$843,374.26) of the Stevedoring revenues to be earned by GPHA.

The nation’s position is further worsened by the fact that “there will be no Berth occupancy Revenue for GPHA on Terminal 3. GPHA earned US$3,192,058.21 as Berth Occupancy Revenue from container operations in 2017. Income from Berth Occupancy is expected to increase as bigger vessels are expected to call at the Port,” even as all the revenues from Berth Occupancy will be lost to MPS.

That is aside of the fact that Port Dues, a major source of revenue for GPHA will decline from US$29,006,406 to US$2,900,640.60.

“Application of these Clauses will result in the reduction of GPHA’s Royalty from MPS stevedoring operations from US$18,801,473 to US$3.760,294.60.”

In the litany of woes that afflict the nation in the deal, the “import of this Clause is that no Terminal Area Fees will be charged on Terminal 3. MPS paid US$826,156.82 as Terminal Area Fees on Terminal 2 in 2017. Terminal Area Fee for Terminal 3 is estimated US$1.60 million per annum. This will be lost to GPHA.” Another import of clause 3.13 (h) is that MPS is not required not make an Initial (Upfront) Payment to GPHA for Terminal 3. MPS paid US$5 million as Initial Concession Fee for Terminal 2, according to the report.

It is estimated that MPS should have paid 5% of the Project Cost as Initial Concession Fee. This amount is estimated to be between US$50 to 70 million depending on the final cost of the Project.

In all of these, however, government appears lax even though by June 2019, it would have lost opportunity to lawfully review the deal, while MPS takes home massive revenue that could have gotten the cash-stripped administration out of its financial woes, including funding of major education and health programmes it has promised the good people of Ghana.