$2bn Tema Port Deal Stinks

The Danquah Institute, a civil society group, has threatened to take legal action after 60 days if the Tema Port expansion $2 billion contract between the Meridian Port Services (MPS) and the Ghana Port and Harbour Authority (GHPA) is not re-negotiated.

According to the group, the $2 billion contract, which is supposed to be a Build, Operate and Transfer (BOT), has mortgaged the economic interest of Ghanaians to MPS and its foreign shareholders for the next 30 years.

Speaking at a press briefing in Accra yesterday, the Executive Director of the group, Edward Kwaku Asomani, explained that Clause 3.3 of the Investment Protection Regime of the agreement has d the GPHA from operating any container terminal within a radius of 20 nautical miles on the Tema main port.

This, he said, aside affecting GPHA’s 70 per cent revenue stream source, was also inconsistent with the general duty of GPHA which requires it not to contract its statutory mandate as stipulated under Provisional National Defence Council (PNDC) Law 160.

Section 5 of PNDC Law 160 requires GPHA to “maintain the port facilities, extend, and enlarge facilities as the authority sees fit, and also regulate the use of a port and of port facilities.”

Mr. Asomani added that by November 2015, the 2014 contract (MPS2) had been amended to grant MPS the full rights to construct and operate the new terminal.

He indicated that the amended agreement, also known as MPS 3, if allowed to continue in 2019, would have dire consequence for GPHA.

This, he observed, would manifest in 72 per cent drop in revenue, 1,400 job losses by 2020, 60 percent decline in volume of container handled by GPHA and also a decline in GPHA royalty revenues from $24.12 million to $6.57 million.

“More wrongly MPS, under the terms of the new contract, is free to add additional tariffs on top of the GPHA approved tariffs without consulting GPHA,” he said.

The Danquah Institute accused the previous Mahama administration of breaching the Public Procurement rules in aiding MPS to secure a contract when it had not made a bid for the contract.

According to them, a presidential fiat halting the entire process allowed MPS to secure the contract for the project when it was not part of entities that originally made a bid for it.

“Interestingly, no bids were received from Meridian Port Services (MPS), a consortium formed in 2003 consisting of Meridian Port Holdings (MPH) and GPHA, APMT and Bollare, the companies that make up MPH, which however registered their interest as separate entities for the Terminal Operations Tender.

“Midway through the terminal operations tender, the NDC government, under former President John Mahama, issued a presidential fiat halting the entire process. Apart from the fact that this directive grossly breached the Public Procurement rules, it also severely impeded the ability of GPHA to freely and competitively negotiate in the interest of Ghanaians. This ultimately set the stage for a badly negotiated contract that mortgaged the economic interest of Ghanaians to MPS and its foreign shareholders for a generation,” the group added.