Ofori Atta orders cancellation of IBISTEK’s single-source contract

The Minister of Finance, Ken Ofori-Atta, has instructed the Ghana Ports and Harbours Authority (GPHA) to cancel a Concession Agreement with Messers Ibistek Ghana Limited, for the development and operations of on-dock container and multi-purpose terminal at Takoradi Port.

The directive cited by the B&FT is contained in a letter dated December, 29, 2017, and is copied to the Office of the Vice President, Ministry of Transport, Public Procurement Authority and other relevant offices concerned with the project.

The letter said the GPHA should reopen a competitive procurement process it had truncated in respect of the project, after which it went ahead and awarded the concession to IBISTEK in a single-source fashion.

“You are hereby directed to suspend any prior concession agreement to undertake the above-mentioned project, without cost to GPHA and government, and report same to this office,” states the letter addressed to the Director General of GPHA.

“Thereafter, GPHA – together with the Transaction Advisor – should continue the competitive procurement process with the shortlisted bidders.”

The project is under the Ghana Public Private Partnership Project of the World Bank Group.

The Ghanaian investment firm IBISTEK Ghana Limited announced plans last year that it was to build and operate a multi-purpose on-dock terminal that would help drive traffic to the country’s exports-based Takoradi Port.

Construction of the terminal was expected to shore-up the cargo throughput capacity of Takoradi Port to about one million total enclosed units (TEUs) from the current average of about 63,000.

It said the deal, which spans a period of 25 years, aligns with the GPHA’s Master Plan to develop and reposition the port to meet increasing demand and create much-needed jobs.

The letter ordering the contract’s abrogation states that government is still committed to local capacity development, value addition, and value creation in projects such as the Container and Multi-purpose (Integrated) Terminal Project through enforcement of its local content policy.

To this end, it asked that the Transactional Advisor be asked to incorporate local content requirements into the Request for Proposals (RFP) of the transaction.

Again, the letter directs that construction of basic infrastructure for the terminals should be a requirement in the RFP.

“The RFP should indicate that the winning bidder, at financial close, will pay not more than two percent (2%) of the cost of the potential partnership to recover the cost of project preparation and transactional advisory services.”

It also states that “the RFP and the draft Concession Agreement should be submitted to the Ministry of Finance for review and approval before they are issued to the shortlisted bidders”.