A US$4.5m consultancy fee earmarked out of a US$150m Transport Sector Improvement Project (TSIP) deal has incurred the wrath of some Members of Parliament (MPs), including the First Deputy Speaker, with the lawmakers calling for a total review of the agreement to give the country value for money.
However, the Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, argued that the terms of the World Bank facility are” generous” and pleaded with the House to give it full blessings to loan agreement.
The lawmakers, Thursday, were presented with the report of the Finance Committee on the financing agreement between the Government of the Republic of Ghana and the International Development Association (IDA) for an amount of SDR 110,600,000 (US$150million) to finance the proposed Transport Sector Improvement Project (TSIP).
The report in part captured a total amount of US$4.5million for consultancy services, the breakdown of which US$2.5m was meant for “Monitoring Consultancy” with the remaining US$2.0million meant for “Monitoring Consultant”.
But the lawmakers who were troubled by the amount captured in the report argued that there will be no value for money on the said project and therefore pleaded with the Speaker to step down the agreement and refer it back to the Committee for a total review.
No value for money
The National Democratic Congress (NDC) MP for Ajumako-Enyan-Essiam, Casiel Ato Forson, who led the onslaught on the government, questioned why US$4.5million out of the US$150million project sum will be allocated for consultancy services.
He also asked if there was any difference between “Monitoring Consultancy” and “Monitoring Consultant”.
The former deputy Minister for Finance further told the House that he has every reason to believe that the money earmarked for consultancy services will go down the drain and Ghana will be the end loser since there will be no value for money on the said project.
Ploy to get some of the money back to the lender
The First Deputy Speaker of Parliament, Hon. Joseph Osei Owusu, who was also not enthused about the US$4.5million earmarked for consultancy services, told the House that the act was a deliberate ploy to get some of the loan amount back to the lenders.
“Mr. Speaker, I wish to suggest that going through the planned imbursement of the loan, we should review what we intend to use the loan for. I have looked at particularly, the component dealing with road safety, DVLA, National Road Safety Commission, and Urban Roads. From my experience, Ghana will not get any value for those expenditures. The reason is simple; all those things they call consultancies, first if it is not given to a company that is Ghanaian. You will never get the approval to spend it. And the components that are coming from outside, I don’t want to make allegations – they come and don’t even give value”, he noted.
He added “I had the occasion to work on the Vehicle Testing System. I am surprise it is back here. What is left to be learnt? We designed what is there – and under the previous transport sector program, they refused us the money because we were not willing to use consultancy from UK and other people. We said we will do it ourselves and we did it. Let us not agree to take a loan for the same thing which will let us bring some people here who will not add any value. I recall there was somebody who was coming from somewhere – Norway. He will come and sit in a hotel for three days and write a report and said I should approve it for him to go and take money. I did one, two and I refused to sign the rest and he said the money is from his country and I said to hell if it is not giving me value, I will not approve it. It is the same thing that we are seeing here. Mr. Speaker, colleague Members in the Roads and Transport Committee will recall the problem we had with DVLA regarding software.
From their budget, we had raised issues over how much money they’ve spent over the years purporting to be installing software and they couldn’t show to us at the Committee level what value they were giving to Ghanaians for all the softwares they were purporting to have been installed.
Now they have programmed to install another software – what value will it give Ghanaians for inspecting the vehicle testing companies – they are private. DVLA charges them. If the fee they are charging is not enough, they should increase it because DVLA is giving them a business and if it should supervise them, then that cost should be borne by the companies.”
Review agreement
The Bekwai legislature further noted that, “all those monies that are programmed for consultancies and study, I propose that they should be turned into infrastructure. It should be giving to build road infrastructure because at the end of the tenure, we will pay the loan and we will have nothing to show to Ghanaians what we used the money for. Ghanaians will not know that indeed, there is some maneuvering to take part of the monies back to the lenders without giving any value. We should take the loan but we should invest not less than 80% of the loan into road infrastructure and not into consultancies that have been put here. I will urge the Committee to go back, review the agreement and take the money for road infrastructure and not for consultancy services.”
Generous terms of loan
But, the Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah, in a sharp rebuttal told the House that 89.1% of the loan facility is going to infrastructure. He also told the House that the purchase of the software was meant for the National Road Safety Commission and not the DVLA.
That notwithstanding, he said out of the US$4.5million earmarked for consultancy services, US$2million is going to the Ghana Highways Authority whilst the remaining US$4.5million will be spent by the Department of Feeder Roads.
“So, if you just stand in the Chamber and say Monitoring Consultancy – $2m and another $2.5m there, are you suggesting that the consultants working on the Highways are the same people working on the Feeder Roads? Mr. Speaker, this is a World Bank facility and the terms are generous and for anybody to suggest that we are approving money – maybe onetime some Norwegian funds came which didn’t go to do what it was expected. This is the project appraisal document and so I do not see why Parliament at this point should not approve this facility. I think Parliament should give its full blessings to this facility”, he stressed.
After back and forth argument over the issue, a majority vote was enough for the adoption of the report of the Finance Committee on the US$150m World Bank loan facility.
The project aims to reduce time on selected parts of the Classified Road Network in Northern Ghana, promote road safety and strengthen the institutional management of the transport sector.
The loan has a five year grace period and a repayment period of twenty (20) years. It has a maximum commitment charge of 0.5% (waved for 2018), a service charge of 0.75% and an interest rate of 1.25%.
