The Ghana Irrigation Development Authority (GIDA) has dismissed claims that $11.9 million to the contractor was paid to a contractor of the Pwalugu Multipurpose Dam Project with no work done. A statement by GIDA said the contractor to Messrs Power Construction Corporation of China (POWERCHINA) moved to the site and began work even though the government did not pay everything as required.
According to GIDA, the $11.9 million is a mobilization fee payable when the contractor could provide an “advance payment guarantee from a reputable bank.”
GIDA said, “contrary to the claim that no work has been done, the contractor has delivered both pre-construction documents and some physical works (camp and access roads).” It assured that “No frivolous payments have been made and the USD11.9 million paid to the contractor was fully covered by a Bank Guarantee valued at USD60.7 million. All payments made were for specific activities executed under contract.”
“Under the contract, the Government was expected to pay USD 48,570,889.69 million (which constitutes 12% of the total contract sum of USD 404,757,414.06) as mobilisation to the contractor subject to the provision of an advance payment guarantee from a reputable bank”.
“Following the receipt of the advance payment guarantee with face value of USD 60,713,612.11 from the contractor’s bankers (Stanbic Bank), an amount of USD 11,949,088.06 (25% of the total advance mobilisation required ) was paid in three tranches” part of the statement read.
GIDA also maintained all the terms and conditions of the contract were duly complied with after an advance payment guarantee from Stanbic Bank.
The statement explained that $11,949,088.06 was paid in three tranches:
i. USD 2,585,328.39;
ii. USD 4,199,175.30. and
iii. USD 5,166,584.37,
GIDA’s explanation comes on the back of a recent revelation that the government paid a contractor $11.9 million for the Pwalugu Multipurpose Dam Project meanwhile no work has been done.
The Pwalugu Multipurpose Dam located in the White Volta Basin, 16km to the east of the Pwalugu Bridge is a government of Ghana-funded project. It is intended to serve the dual purpose of generating at least 110MW of electricity; 60MW from hydro and 50MW from solar. The dam will also be used as an irrigation dam for at least 25,000 ha of land.
Aside from those two major projects that would transform the economy of the area and the country, the dam will also help prevent the annual flooding in the area due to the spillage of the Bagre Dam in Burkina Faso. Phase 1 of the Pwalugu Multipurpose Dam is under VRA and the Ministry of Energy while phase 2 is under the control of GIDA and the Ministry of Food and Agriculture.