(Cassiel Ato Baah Forson): Mr Speaker, thank you for the opportunity to speak to the Motion that was moved by the Hon Chairman of the Finance Committee. In doing so, let me first of all draw your attention to the fact that, the key players that signed this major Agreement are not even in the House to guide us in debating.
Mr Speaker, I was expecting to see the Hon Minister for Finance and the Hon Minister for Roads and Highways, who are the main signatories to this very Agreement for them to be able to answer a few questions that may arise as part of the contributions.
Mr Speaker, again, let me put on record that any attempt by any Administration to improve on our infrastructure is something that we Hon Members of Parliament would certainly support. But the Agreement before us, as it stands, has certain problems that would not make me support it.
I say this, and I would start from the last page of the Report of the Committee. Mr Speaker, “breakdown of financed amount” --
Mr Speaker, one would notice that the first line is “Original EPC Contract Price”. We have LOT 1 to LOT 10 giving us a total of US$497,200,051.27.
But if I may also refer to page 5, paragraph 6.1 of the Committee's Report, “Financing for the Project”, and under it, one would notice that the Hon Minister for Finance and his team, and in fact, the Deferred Payment Agreement says that Sinohydro is lending Government up to 85 per cent of the original EPC Contract and Government of Ghana is to pay, 15 per cent as owner's contribution.
Mr Speaker, so, if we are to look at it, out of the US$497,200,051.27, Government of Ghana is contributing US$74.5 million and Synohydro is bringing on board, US$422.6 million.
Mr Speaker, on the second column of the Breakdown of Financed Amount, one would see, Management Fee, Commitment Fee and Sinosure Premium, and finally, Interest and Fees for Interest During the Construction Period.
Mr Speaker, if we are to add the Management Fee of US$4.1million, Commitment Fee of US$2.6million, Sinosure Premium of US$62.2million and Interest and Fees for Interest During Construction Period of US$80.3million, that would give us approximately, US$150million.
Mr Speaker, we are actually borrowing US$422.6million from Synohydro, but we are going to end up paying fees and insurance with interest up to, US$150million. This is according to the document that the Ministry of Finance has given to us.
Strangely, if we are to express this as a percentage on the amount that we are asking them to finance which is US$422million, of which we are going to pay US$150 million, then it means we are paying about 35 per cent in nominal terms and this is very expensive.
Mr Speaker, I say this because I have been in this House for some time. Yesterday, we debated the China Development Bank Loan, and the all-in- cost as was recommended to this House by the Committee was 6 per cent.
Even that, I raised the point that we are moving it from 4.1 per cent to six per cent because of the premium. But in this
case, the amount is a bit too much, and that is why I am asking that this Government pauses a bit, rethink about it because we are not getting value for money.
Mr Speaker, my second point relates to the fact that we were told that this is not a loan agreement. Time and time again, we were told that this is not a loan agreement. But the Deferred Payment Agreement before us clearly shows that it is a buyer's credit. And they are saying that it is not a loan but a barter arrangement.
Again, we were also told that Government of Ghana is not going to grant what we call sovereign guarantee. Unfortunately, if we are to look at page 10 of the Deferred Payment Agreement that was given to all Hon Members of the House, item 5.4, it states and I beg to quote:
“5.4 MOF irrevocably and uncon- ditionally undertakes to pay the amounts due under which Interim Payment Certificate (IPC), including interest, on the dates pursuant to the Payment Schedule and following notice served by Sinohydro and/or any other party designated in writing by Synohydro.”
5.5 MORH and MOF hereby further explicitly, unconditionally and irrevocably waives any right to withhold payment that it may have under any applicable law, the EPC Contract and this Agreement, be it for suspension of the Project, defects, delay, damages or any other ground, or under any other agreement with Sinohydro or any of the Financiers.
5.6 MORH and MOF hereby further explicitly, unconditionally and irrevocably waives any right to
deduct, set off or counter claim in relation to any of the payment obligations,…”
Mr Speaker, these are the words that normally would be used under sovereign guarantee.
The Ministry of Finance would have to give sovereign guarantee to Sinohydro in a form of a loan. Unfortunately, the Deferred Payment Agreement that has been laid before this Honourable House is embedded in it as a sovereign guarantee, which is normally given as a form of loan. If this is not a loan, then what is it?
Mr Speaker, clearly, Ministry for Finance is using words like “irrevocably”, “unconditionally” and “explicitly makes money available”. Unfortunately, it looks as if the Government does not want to come clean on this matter.
Mr Speaker, again, on the same Deferred Payment Agreement Relating to EPC Contract Agreement, permit me to refer you to the Annexes of the Deferred Payment Agreement. Under Annex III of the Agreement, you would see “NOTICE
OF ASSIGNMENT OF DEBTS”.
We were told at the Committee and as part of the Deferred Payment Agreement Relating to EPC Contract Agreement that Sinohydro would be assigning all of its obligation to a bank to collect the amount on their behalf. Strangely, the words as being used in the NOTICE OF ASSIGNMENT OF DEBTS, if I should refer you to item 4 of Annex III which is on page 36 of the Agreement, it says:
“… all our rights, interests, benefits and/claims in, under or to (i) all or part of payments by You under the EPC Contract and the Deferred
