HomeNewsLocal NewsGIDA defends $12 million payment for Pwalugu dam project

GIDA defends $12 million payment for Pwalugu dam project

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The Ghana Irrigation Development Authority (GIDA) has justified the $12 million payment to the contractor responsible for the Pwalugu Multipurpose Irrigation Dam project.

In a press statement released on May 28, GIDA clarified that, the payment was in accordance with the contract terms.

The contract with Messrs Power Construction Corporation of China (POWERCHINA) stipulated that once the contractor provided an “advance payment guarantee from a reputable bank,” they were entitled to receive a mobilization fee totaling $11.9 million.

GIDA’s statement aims to provide transparency regarding the payment and emphasizes adherence to contractual obligations.

GIDA further clarified that, the government faced no risk in approving the payment.

Additionally, they stated that despite claims of no progress, the contractor had provided preconstruction documentation and initiated some physical work, including establishing a camp and access roads.

Members of the Minority in Parliament’s Works and Housing Committee, who had expressed concerns about the payment, visited the project site last week to assess the extent of the work completed.

They were left disappointed because according to the members, the contractor had sold materials meant for the project and abandoned the site.

The Member of Parliament for Bongo, Edward Bawa, called for the prosecution of all persons involved in the approval of the $12 million payment but GIDA maintained 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.”

GIDA insisted that the terms of the contract were holistically followed after the contractor provided the advance payment guarantee from Stanbic Bank.

“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.”

Below is the full statement

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