- as Contractor has no operational licence despite being paid US$2m – Auditor-General
After a payment of US$2million to Africa Investor Holdings Limited by the Ghana Infrastructure Investment Fund (GIIF) toward construction of the Accra Sky Train Project, according to the latest Auditor-General’s report the project may not come to fruition as the contractor is yet to receive an operational licence to begin work.
Africa Investor Holdings Limited incorporated a Special Purpose Vehicle (SPV) in 2018 in the Republic of Mauritius for purposes of establishing Ghana Sky Train Limited to develop the Accra Sky Train Project through a concession on Design, Build, Finance and Operate arrangement.
Despite receiving the money almost four years ago in February 2019, the SPV – known as the Ai Sky Train Consortium Holdings – according to the Auditor-General is yet to obtain a licence for ‘Aeromovel Technology’ required for the Sky Train Project.
The inability to secure the licence, the A-G said, could hamper the project’s feasibility studies which inform the project’s economics for approval.
The US$2million to Africa Investor Holdings as full consideration is for 10 ordinary shares in the SPV. The report however disclosed that the premium paid for each share, which was US$199,999 in the SPV, has reported a net liability for the year December 31, 2020.
Though the A-G noted that feasibility studies are still ongoing, the report is however apprehensive that the investment in the SPV might not be recovered if the Accra Sky Train Project is unable to secure the licencing as well as Executive and Parliamentary approval.
The Auditor-General urged management of the fund to continue monitoring the feasibility and recoverability of investment in the SPV, and then make the necessary provisions based on outcomes of the feasibility studies.
The Accra Sky Train Project
Government through GIIF in November 2019 signed a concession agreement with South African firm Africa Investment (AI) to construct the Accra Sky Train project at a whopping cost of US$3billion.
The Railways Ministry at the time asserted that the Sky Train Project was the solution to increasing traffic congestion in Accra, being a deal expected to take nine months for execution as construction was expected to begin in January 2020.
As a world-class mass transport system in the capital, GIIF was optimistic the project would create 5,000 jobs during construction and further open-up Accra – considering the system’s multiplier effects and property growth around the transport system.
