RED FLAG OVER GHANA-SINOPEC DEAL
By Stephen Odoi-Larbi
Even before the subsidiary agreement between the Ghana National Gas Company and SINOPEC Ghana, a sister company of China Petrochemical Corporation (SINOPEC Group), covering the Western Corridor Gas Project could come to Parliament for approval, the latter is reported to have mobilized to site, executing its part of the deal.
This has provoked some Members of Parliament (MPs), especially the minority side of the House, to question such a move. According to the minority members, the subsidiary agreement between the two entities, Ghana Gas Company and SINOPEC Ghana, have not received Parliamentary approval and does not see the reason why the green light would be given SINOPEC to begin work on the Western Corridor Gas Project.
However, their (minority) claim was strongly objected to by their colleagues on the majority side of the House, who argued that such a demand was unnecessary. The Minority Leader and NPP MP for Suame, Osei-Kyei Mensah-Bonsu, who raised the alarm on the floor of the House yesterday, argued that it was only the loan facility of US$850m that has received Parliamentary approval and not the subsidiary agreement.
“Madam Speaker, I don’t understand why SINOPEC are already on site and executing their job, when it is only the loan facility that has been approved by Parliament. That of the subsidiary agreement has not come here for approval. So why are they on the ground?” he quizzed.
His claim was strongly supported by the MP for Old Tafo, Dr. Anthony Akoto Osei who claimed that since a section of the Ghanaian populace have started raising questions about the said contract agreement not coming to Parliament for approval, it was better to do so, since the subsidiary agreements the House approved, covering the US$3bn Chinese loan was different from that between Ghana Gas Company and SINOPEC Ghana.
He buttressed his argument with Article 181 (5) which states that: “This article shall, with the necessary modifications by Parliament, apply to an international business or economic transaction to which the Government is a party as it applies to a loan.”
Per the dictates of the US$3bn Chinese loan, the Master Facility Agreement (MFA) would be disbursed under individual subsidiary project agreements (Subsidiary Agreement) to be signed between implementing agencies, and the contractors, for the construction and establishment of projects to be financed from the facility.
In February, this year, Parliament approved the Subsidiary Agreement between Ghana and China Development Bank Corporation (CDB) for an amount of US$ 850m to finance the Western Corridor Gas Infrastructure Development Project.
Ghana National Gas Company, a wholly state enterprise and SINOPEC Ghana, a subsidiary of China Petrochemical Corporation (SINOPEC Group), which is a state-owned company solely invested by the state and functioning as a state-authorized investment organization entered into agreement to late November to pre-finance the gas project and be reimbursed latter.
The gas infrastructure project involves the laying of pipeline from the Jubilee Field onshore, construction of a plant with the capacity to process 150mmscf of gas at Domunli in the Jomoro District of the Western region, and construction of a 120-kilometre pipeline to transport the processed gas to Aboadze.
Technip, early this year, constructed the 14-kilometre deepwater stretch of the gas pipeline from the Jubilee Field, using the Apache II drillship, under a contract awarded by the (GNPC), while Intecsea-Worley Parsons Atlantic completed the FEED for the 36-kilometre shallow water pipeline.
Ghana had already contracted the China Development Bank (CDB), another Chinese state-owned firm for US$3bn to finance various infrastructure projects in the country, including that of the Western Corridor Gas Infrastructure Project. Inside observers are, however, worried why another Chinese state-owned company would be contracted to pre-finance the gas project that would come with an extra cost to the nation.
But in response to such a claim in a government statement, the Chief Executive Officer of Ghana National Gas Project, Dr. George Sipa-Adjah Yankey noted the decision to contract SINOPEC to pre-finance the gas project was to avoid wasting time, “while holding ourselves in readiness for the disbursement of the CBD facility.”
Responding to the claims by the minority side of the House, the NDC MP for Tamale South and Minister of Communications, Haruna Iddrisu said since Parliament had already approved the Master Facility Agreement (MFA) of the US$3bn CBD loan and its subsidiary agreements, there was no need of bringing another economic transaction agreement to Parliament for approval.
But wading into the argument, the Deputy Majority Leader and MP for Wa Central, Alhaji Abdul-Rashid Pelpuo noted that his mind could not recollect the said transaction and would, therefore, verify the confirmation of such claim by the minority and get back to the House when permitted to do so by the Speaker.
Having listened to both sides of the House on the matter, the Speaker, Rt. Hon. Joyce Bamford-Addo directed the leadership of the House in her ruling to cross check the records of Parliament if the said transaction has received Parliamentary approval or not and report to the House.
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