Contractors’ in Trouble With Ghana First Judgement Debt Looms For MMDAs

Contractors’ in Trouble With Ghana First Judgement Debt Looms For MMDAs

In an interview with PRO For GFCL Mr Kwame Owusu Bampoe, into the ongoing impasse between contractors and Ghana First Company Limited (GFCL) over the construction of Clean Ghana Sanitation facility, has established that the Metropolitan Municipal and District Assemblies (MMDAs) could be dancing their ways into paying huge judgment debt.

It would be recall that some contractors recently abrogated their contract with Ghana First Company Limited, citing ‘fraud’ and fundamental breaches in the whole contract.

These contractors who have abrogated their contract with the company claimed to be in consultation with some other foreign company to take over the contract; and hence will soon be entering into a service contract with the said company on the project.

This paper has established during its investigations that the decision taken by the contractors could land government into paying huge judgment debt as the Project Owner (Ghana First Company Limited) is indemnified and the Project Partner (MMDAs) cannot take the project away from the Owner for a period of 30 years.

A Clean Ghana Sanitation Facility Agreement signed between Ghana First Company Limited and the MMDAs indicted clearly that the Project Owner shall provide the entire funding for the construction of ultra-modern toilet facilities within the districts whilst the Project Partner shall provide land(s) and not funding for the project.

In Clause 3(ii) of the said Agreement, it was stated succinctly that, “the Project Partner hereby covenants that the land it shall provide shall be its self-acquired land with title, right and or interest in the said land having vested in the Project Partner. Furthermore the land so provided shall be vested to the project owner who is authorized to use the respective land for the purpose of securing funding only for this project.”

In indemnifying the Project Owner (Ghana First), it was noted that the Project Partner shall ensure that the “Assembly itself, agents, privies, assigns, servants, workmen whomsoever or otherwise howsoever during the tenure of any government shall not dispose the Project Owner from its ownership and that no person at law shall take over the property comprised in the project herein either permanent or temporarily and that the project is indemnified against all government interferences.”

However, the parties in the project agreed to enter a 30 years contract period during which period Ghana First will continue to own 90 percent of the facility built on the land whilst the Assemblies have ten percent equity.

Checks have revealed that, the Assemblies have until 30 years after which they can either decide to take over the project or allow the Project Owner the first option of renewal for another ten years, hence any other company coming in at this time to take over the project is an impossibility.

Meanwhile, the Agreement Clause 3(viii) states also that, “Where renewal is denied, ownership of the project is transferred from the Project Owner to the Project Partner. The Project owner then has the first option of a Management Franchise agreement with the Project Partner if the Project Partner so desires.”

The MMDAs being the Project Partners, will be paying all related legal cost arising out of any government interferences in the project.

It is also however revealing that, the contractors who have accused the Ghana First of defrauding them because it failed to pay them and for not paying them 60% of the contract sum as they claimed, have not completed the project within the stipulated and agreed period.

According to the contract signed with the Project Owner, the Contractors are mandated to complete the project within a period of three (3) calendar months, yet almost all the contractors are yet to complete the project even two years into the contract.

The contractors who have all signed onto the their various work schedules which will guide them in meeting the three months period, were to work on their various site on the project for 28 continuous days, yet have also flouted that provision in the contract.

Information received has indicated that the contractors who have written to the Project Owner (Ghana First) abrogating their contract with the company are taking steps to write to the Metropolitan Municipal and District Assemblies (MMDAs) of their intention to bring in another company for the Assemblies to take the contract away from Ghana First.