Ranking Member of Parliament’s Mines and Energy Committee, Adam Mutawakilu, has said the executive order approving the controversial renegotiated AMERI power deal prior to Parliament’s blessing vindicates concerns about its soundness.
Mr Mutawakilu, National Democratic Congress (NDC) Member of Parliament for Damango, says had the deal received Cabinet approval before reaching Parliament, proper scrutiny would have been done.
“I believe that it is because of the executive approval that they couldn’t even scrutinise the document,” he said, adding “if this thing was given to Cabinet, the Minister of Finance would have analysed the financial aspect of it; Attorney-General would have analysed the legal opinions.”
His comments on MultiTV’s current affairs programme, PM Express, on Monday was in reaction to revelations that President Addo Dankwa Akufo-Addo approved the renegotiated agreement despite concerns by civil society and the Minority in Parliament that the new deal does not make financial sense.
The Minority NDC, think tank, Africa Center for Energy Policy (ACEP) and energy experts are all in agreement on the view that the amended power deal with Mytilineous will cost the country in excess of $1 billion if it comes into force.
According to the critics, who say they have studied the new agreement in detail, the current AMERI contract would have terminated within the next two years after which the country will own the power barges, but the proposed deal will push this ownership period to 15 years, albeit a marginal reduction in yearly payments for the barges.
Also, under the new agreement, critics say, the current tariff of 10.4 cents charged on power produced will increase to 11.7 cents for the same amount of power produced within the 15-year period, possibly translating into a higher cost of electricity for the consumer.
The critics suspect a sinister motive is at play in government’s refusal to back down the controversial renegotiation.
Speaking on PM Express, Adam Mutawakilu said the executive approval suggests that some persons other than the Finance Minister poorly negotiated the deal, most likely for their selfish interests.
“Executive approval is when people sit somewhere, negotiate a deal and come to the President [saying] ‘this is the deal we have and it is good, if you approve it we will get much’ and our President says ‘okay’…and he approves,” Mr Mutawakilu painted a picture of what may have gone on behind closed doors.
He is convinced the President lacks proper briefing on the key implications of the new deal.
“Executive approval is not the best way to bring documents to Parliament,” he said.
Controversy from birth: Background of Ameri deal
The $510 million Ameri deal was signed between the John Mahama-led government in 2015 at a time when the country was reeling under a heavy power paralysis. The deal was to shore up Ghana’s power supply and to help solve what became known as the return of “dumsor”- power outages.
However, the deal triggered a well of controversy with civil society groups including IMANI, ACEP raising issues about the cost of the power plant.
According to IMANI, the deal had been inflated by over $150 million and demanded that government abrogate the deal.
Vice President of IMANI Kofi Bentil said the then government officials paid a whopping $150 million to a middleman for little or no job done.
But officials of the Mahama led government were adamant in the face of criticism.
Deputy Power Minister at the time John Jinapor justified the agreement saying, the $510 million was for a period of five years which is not the same as paying for a product on a shelf.
The then opposition New Patriotic Party was not left out of the controversy, accusing the Mahama led the administration of price inflation.
It promised to review the agreement if it won power and shortly after it did, the Akufo-Addo led government quickly set up a 17-member committee led by Philip Addison, a lawyer, to investigate the details of the agreement.
The committee among other issues, advised the government to review the agreement with Ameri company.
The review has been done and a new agreement has been brought to Parliament for approval.
In the new agreement, the government claims the new deal will save the country a whopping amount of $400 million over a 15-year period.
Under this agreement, a new company- Mytilineous International Trading Company will take over the management of the Ameri power plants for 15 years.
The new company has offered to pay Ameri an amount of $52,160,560.00, with the government paying the remaining $39 million to the Dubai-based company so they can wash their hands off the deal entirely.
In the new agreement, the price at which government will now buy power will be reduced from 14.5919 cents to 11.7125 cents per kWh which will lead to a savings of $405.067 million.
“The drop in tariff of US cents 2.8793 per kWh has resulted in a yearly cost savings of about $27.004 million. The total cost of savings over the 15 year period is $405.067m,” the new agreement said in part