As the government suffers from an avalanche of attacks for parting with GH¢42 million in a judgment debt for the construction of stadia to host the CAN 2008 tournament, a Poland-based construction firm has also sued the government for breach of contract emanating from the construction of the proposed 15,000 seating capacity stadium in Cape Coast, with a contract sum U5$25,000,000.

Polmot Holding SA of Poland has sued the government, through the Ministry of Youth and Sports, as well as the Attorney-General, for breach of contract, based on an agreement entered into on March 27,2008, for the designing, building, and equipping of ,a 15,000 seating capacity stadium in Cape Coast in the Central Region.

The plaintiff is claiming cost and damages amounting to US$25,275,000; made up of US$2,500,000 being the concept design and building of the proposed Cape Coast Stadium, US$3,000 being cost of Advance Payment Guarantee valid for 18 months, and US$272,000 being the cost of business travel to Ghana in pursuit of the execution of the contract and settlement of the dispute with the Ministry of Youth & Sports.

Additionally, liquidated damages in the sum of US$18,750,000, calculated at 3% of the contract sum and multiplied by 25 months, being cost of delay, as provided by the contract agreement from the date of issuance of the Advance Payment Guarantee calculated at between 2% and 5% for each month of delay.

The company is also demanding US$3,750,000 in damages for breach of contract calculated at 15% of contract sum, all being the loss suffered as a result of the breach of the contract on the part of the Ministry of Youth and Sports.

It was further the claim of the plaintiff that the contract stipulates that if the Ministry of Youth & Sports failed to abide by the terms of contract, it would reimburse the construction firm for any costs, loss and expense resulting from the Ministry’s failure.

According to the plaintiff, it carried out on all the specifications of the agreement entered into with the Ministry of Youth and Sports in constructing the stadium, which included design, engineering, planning works, supply, installation testing and commissioning of the plant and equipment, as well as supply of technical documentation.

Under the agreement, the Ministry of Youth & Sports was obliged to hand over the stadium site immediately after signing the agreement.

Polmot Holding SA further pointed out that by the terms of the agreement, the contract sum of US$25,000,000 was to be paid, beginning with an advance payment of 24% of the contract sum, being US$6,000,000, with an advance payment within 14 days of signing the agreement against the submission of an advance invoice and advance payment guarantee in the equipment amount issued by its bankers.

Subsequently, the government was to make the second tranche of 16% of the contract sum, being US$4,000,000, by December 31, 2008, against the submission of a payment invoice, with a third tranche of 20% of the contract sum paid by June 30, 2009, against the submission of an invoice, and the final tranche of 40% of contract price paid against the presentation of a copy of the Provisional Acceptance Certificate and a Retention Bond.

The plaintiff noted that even though it had complied with all the terms of the agreement, with an Advance Payment Guarantee from its bankers, in the sum of US$6,000,000, as far back as December 2008, it had not received the Advance Payment from the Ministry of Youth & Sports, stressing that no other payments had been made, despite several demands made to the Ministry.

Polmot Holdings SA, therefore, stated that due to failure on :he part of the Ministry of Youth and Sports in abiding by the contact agreement, it had suffered considerable trouble, inconveniences and expense, resulting in the loss of the profit it would have made in undertaking the work.

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