Former Minister for Water Resources, Works, and Housing Collins Dauda has thrown a challenge to the government to claim US$10 million from Construtora OAS Ghana Limited if the company indeed failed to perform under the Salgemi Housing project.
According to him, the government is entitled to five percent (5%) of the contract sum under the agreement as a performance guarantee to be executed by the contractor.
Speaking through his legal counsel, Thaddeus Sorry, Mr. Dauda told the Accra High Court on Friday that the government was entitled to at least US$10 million from the contractor in the event that it failed to live up to the tenets of the contractual agreement.
He said this while Mr. Sory was cross-examining the Acting Chief Director of the Ministry of Works and Housing, Rev. Stephen Yaw Osei, as the 1st Prosecution Witness (PW1).
The Court, presided over by Justice Dr. Ernest Owusu-Dapaa, heard that the particulars of the contract between Construtora OAS Ghana Limited and the government made provision for the latter to make a claim for that performance security.
However, when a question was posed to PW1 as to whether the government has made any claim under performance security, the witness denied having any knowledge about such a claim.
The witness also testified that Mr. Duada, who is standing trial with three others, was not in office at the time US$80 million out of US$200 million seed money for the project was transferred to the contractor in January 2013.
Rev. Osei explained that the transfer was done on January 27, 2013, as an advanced mobilisation, whereas the former minister was appointed on February 11, 2013.
Fast forward: He affirmed that the former minister, who is also a legislator, is not responsible for all payments made from May 2015 to July 2017.
He concurred with the counsel that from May 2015 to July 2017, when certain payments were made, Mr. Dauda was not in office as minister for Works and Housing.
There was a tug of war between the counsel and witness about what a contract value and contract cost are.
This was as the counsel made references to the Rev. Osei witness statement, which quotes a Ghana Institute of Surveyors report that the value of the project was fixed at US$64,982,900.77.
PW1 denied using the words value but cost, which the counsel followed up with a question: “Will the value of the project defer from the cost of the project as testified by you in your Witness Statement on paragraph 109?”
Responding to the question, PW1 said what is written in black and white in the GIS report is cost.
Upon several follow-up questions on the subject matter, including whether the cost of a project will be different from its value, the witness finally answered that “the cost of the project is stated there. The cost is the aggregate of whatever work that was done.”
The counsel confronted the witness with Exhibit 1D1, which disagrees with the audit report of GIS, on which the Ag. Chief Director is relying, that the project cost is US$64,982,900.77, but he also disagreed.
Mr. Sory asserted that the money received by the Bank of Ghana for the Saglemi project was not exactly US$200 million, as the witness wanted to portray, but US$198,460,000.
With the help of the witness calculation, it was established that US$1,550,000 was deducted from the contract sum as banking charges and fees.
Nevertheless, the witness insisted that the charges and fees are normal banking practices and did not take the focus away from the fact that the seed money was US$200 million for the 5000 housing units.
Rev. Osei also disclosed that although Architectural & Engineering Services Limited (AESL) is a limited liability company under the Ministry, it has been inundated with several legacy debts, and for many years it has not made a profit.
The Architectural and Engineering Services Limited was the project consultant, in charge of effecting payments only when specific works had been duly executed, verified, and certified.
Although AESL is an independent entity, whatever profit it makes, it pays dividends to the state, but this has not been the story.
Accusation and plea
Other accused persons in the trial are Dr. Kwaku Agyeman-Mensah, a former Minister for Water Resources, Works, and Housing; Alhaji Ziblim Yakubu, a former Chief Director at the Ministry for Water Resources, Works, and Housing; and Nouvi Tetteh Angelo, Chief Executive Officer and owner of Ridge Management Solutions Ghana Limited.
One of the accused persons, Andrew Clocanas, Executive Chairman of Construtora OAS Ghana Limited, gave up the ghost last month.
They pleaded not guilty to 72 counts of willfully causing financial loss to the state, misapplying public property, issuing false certificates, and dishonestly causing loss to public property.
