US$93m termination clause in UNIPASS deal strange – MPs

The Minority Members in Parliament have described the government’s commitment to pay US$93 million in case of terminating the Ghana Link/UNIPASS contract, whose total value over the 10 years is US$40million as “strange and worrying”.

They questioned why the government would go ahead to sign such a contract without recourse to due process and with a company that has no tried and tested single window system.

In March 2018, Ghana Link Network Services Limited in collaboration with Customs UNI-PASS International Agency (CUPIA) of Korea Customs Services were, through sole-sourcing, contracted by the Ministry of Trade and Industry to introduce the UNI-PASS system at Ghana’s ports for a period of ten years at a cost of US$40m.

In the contract, the government would have to cough out US$93million payable to Ghana Link and its overseas partner, CUPIA Korea owning UNIPASS, if the company is allowed to start operating Ghana’s National Single Window platform and asked to stop in the first year in the event of any anomaly whatsoever detected.

Despite this termination clause, caution was thrown to the wind, rather than ensuring that before Ghana Link and UNIPASS were allowed to start work all uncertainties would have been cleared.

Rather, Senior Minister Yaw Osafo-Marfo instructed importers to start working with UNIPASS at a time the company had demonstrated significant technological challenges that could affect its work and completely disrupt the trade facilitation structure and disrupt revenue generation.

In a press statement released, deputy Ranking Member on Trade, Industry and Tourism Committee, Yusif Sulemana said: “It would have been logical to pay Ghana Link/UNIPASS the remaining value of their contract in the event of a unilateral termination of the contract by Ghana.

“If it is the contention of the government that this is not the logical thing to do, then on what basis are they – in a letter signed by Senior Minister Yaw Osafo-Maafo – proposing to pay GCNet the value of their unspent term on the contract?” he asked.

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Mr. Sulemana said the GCNet and West Blue system has been audited by both local and international agencies and been acclaimed globally for its robustness and efficiency – receiving some of the highest ISO certifications for this as well as several local and international awards.

He said the two companies operating Ghana’s Single window at the ports have since 2015 worked to increase government’s revenues consistently, except in 2019 when the government reduced benchmark values at the ports, adding that: “The accumulated growth in Customs revenues between 2015 and 2018 was about 76 percent; i.e. rising from some GH¢7.5billion in 2015 to about GH¢13.2billion in 2018.

“So, why would our government seek to replace such companies with a sole-sourced company having no proper track-record in the business and with no verifiable superior systems?” he quizzed.

Mr. Sulemana said the closest anyone can affiliate Ghana Link to port services delivery is through its subsidiary Africa Link Inspections Company Ltd. (ALIC) in Sierra Leone.

Ghana Link sacked in Sierra Leone

Ghana Link’s subsidiary, ALIC, was contracted by Sierra Leone to deliver an end-to-end system in 2012 – but as at January 2020, when their contract was being terminated, they were yet to deliver.

Giving details on why the ALIC was kicked out, he said the company was found to not only have failed to implement important and vital components of its contract, but also to have – in connivance with its parent company, Ghana Link – manipulated financial records for tax evasion purposes.

“Again, the Sierra Leonean Authorities also found that ALIC had failed to pay taxes to the tune of Le45 billion,” Mr. Sulemana added.

He stated that in Ghana, also, the company’s earlier scanning and valuation service was noted to be poor.

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“In spite of these negative factors, our government led by President Akufo-Addo has decided to replace companies that have been delivering improved services and revenues; companies that are acclaimed globally for their capacity and transparency with a company that has been found not only to be incompetent and incapable of delivering a Single Window system, but is also allegedly very corrupt,” Mr. Sulemana said.

“The only reason this can happen is when there are ulterior motives,” he said.

Contract Fees

Mr. Sulemana asked: “Why would any government replace a cheaper system that is delivering its mandate with a more expensive one that is unproven to be superior?”

He said: “The combined fees paid to GCNET and West Blue for their services is 0.54% of FOB. With this Ghana Link/UNIPASS deal, the government of Ghana has decided, for whatever reason, to pay 0.75% of FOB.  This was after granting Ghana Link duty- and tax-free importation of their inputs (which GCNET and West Blue do not enjoy).

“Our question to President Akufo-Addo is: what specific addition is Ghana Link/UNIPASS bringing onboard to warrant the extra 0.21% of FOB? Why is the government providing Ghana Link with inordinately higher fees for a service that is being provided at a lower cost? Ghanaians want to know why they will be paying more for this unproven system.”

Mr. Sulemana warned that the action of government will erode the gains made at the country’s ports by successive governments since the year 2000.

“Our belief is that the puppet-masters pulling the strings for this transaction could only be motivated by what they stand to gain privately. Those people must be reminded that dawn is on the horizon and they will answer,” he said.

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