The Ghana Irrigation Development Authority (GIDA) has debunked any misconceptions surrounding the recent $12 million payment made to the contractor responsible for the Pwalugu Multipurpose Irrigation Dam project. Amidst public scrutiny and questions regarding the sizable sum, GIDA has stepped forward to provide clarity on the matter.
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In a statement released on Tuesday, May 28, GIDA reaffirmed that the $12 million payment to Messrs Power Construction Corporation of China (POWERCHINA) was entirely within the parameters of the contractual agreement.
Contrary to speculation, this payment, amounting to $11.9 million, was specifically designated as mobilisation funds.
GIDA stressed that the disbursement was made in strict adherence to the terms outlined in the contract with POWERCHINA. According to these terms, a mobilisation fee was stipulated to kickstart the initial phases of the project. This fee is customary in large-scale construction endeavours and is intended to facilitate various preparatory activities essential for project commencement.
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Part of the statement read;
“The EPC contract consisted of a detailed feasibility study (engineering designs, social and environmental impact assessment, soil and agronomic studies) and engineering construction (working drawings and setting out of works). It is important to note that these are all pre-construction activities that are required before actual construction works can commence.”
“Under the contract, the government was expected to pay USD 48,570,889.69 million (which constitutes 12% of the total contract sum of USD 404,757,414.06) as mobilisation to the contractor subject to the provision of an advance payment guarantee from a reputable bank.”
“Following the receipt of the advance payment guarantee with the face value of USD 60,713,612.11 from the contractor’s bankers (Stanbic Bank), an amount of USD 11,949,088.06 (25% of the total advance mobilisation required) was paid in three tranches,”
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