$3BN CHINA LOAN IN LIMBO …IMANI Blames Poor Packaging For The Delay
By Emmanuel Akli
The hullabaloo that greeted negotiations and the approval of Parliament of the $3 billion loan from the China Development Bank (CDB) to carry out various infrastructural developments across the country would simply not die away.
Imani Ghana, a local Think Tank, after its initial reservation about the loan, is raising another alarm that the government would find it hard to get the loan contracted with the Chinese, due to the poor packaging of the projects, which are going to be financed by the loan.
Parliament, in 2011, approved the $3 billion loan, which was negotiated for by the late President Mills, after the opposition had raised red flags, including the allegation that $7 billion of our oil revenue had been used as collateral.
The loan is to be used to finance the Eastern corridor roads, the western railway line, gas infrastructure, a number of beach landing sites, and feeder roads among others.
A memorandum of understanding to that effect was signed in September 2010, by President John Atta Mills.
The International Monetary Fund, which has been supporting Ghana’s economy with loans and other interventions, later approved of the loan in December 2011.
The release of the funds for the execution of the intended projects, however, delayed until the then Vice President, John Dramani Mahama, led a government delegation to China in April last year, and succeeded in signing an agreement for the release of $1 billion out of the estimated $3 billion.
The funds were to execute the construction of the gas infrastructure to process gas from the Jubilee fields, and an ICT platform for the surveillance of the oil and gas infrastructure.
The development of the gas infrastructure contract, which includes the laying of pipes under water from the Jubilee fields to wheel natural gas to the processing plant at Atuabo, is being executed by Sinopec, a Chinese company. Sinopec set June this year as the deadline for the completion of the gas project.
Speaking in an interview with The Chronicle in Accra on Wednesday, this week, the founding President of Imani, Mr. Franklin Cudjoe, doubted whether Sinopec could meet the June deadline that it had set.
According to him, the company promised to complete the project in December last year, but failed to meet the target. It then set February this year, which it again failed to deliver.
To him, therefore, the June timeline Sinopec has set could not be trusted. He contended that the failure of the gas development company to meet its deadlines could be attributable to lack of funds, but Ghanaians are not being told the truth.
Cudjoe further told The Chronicle that the bulk of the Chinese loans were not being released because of the poor packaging of the projects to be financed by the loan.
According to him, no bank would finance a project that is seen as not profitable, and that the earlier the government did its homework regarding the packaging of the projects to make it viable in the eyes of the lender, the better it would be for the country.
According to the Imani Founding President, Liberia also managed to secure about $2.7 billion from the same Chinese, but because of the poor packaging of the projects they were going to execute with the loan, the money was never disbursed.
When told that the government of Ghana had decided to use part of its oil as collateral, and that the source of paying back the loan had already been secured, Mr. Cudjoe argued that notwithstanding this agreement, any lending bank would always make sure that the project it is going to finance is viable, and this pertains to the international banks.
A government source contacted by The Chronicle, however, denied claims by Imani that poor packaging had caused the delay in the release of the funds. According to the source, the release of the funds had delayed because the government was looking for its counterpart funding for the projects, which would soon be ready.
On the delay in executing the gas infrastructure project by Sinopec, the source said though the project was being financed with the same CDB loan, the executing company was financing the project until it hands it over to the government, and that any delay could not be attributable to the poor packaging of the project.
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