The Ghana Irrigation Development Authority (GIDA) has clarified the $12 million payment to the contractor responsible for the Pwalugu Multipurpose Irrigation Dam project. 

Defending the payment, GIDA asserted that it was part of the contractual agreement with Messrs Power Construction Corporation of China (POWERCHINA). The payment, totaling $11.9 million, was designated as mobilisation funds.

GIDA emphasised that the payment to POWERCHINA was made in accordance with the terms of the contract, which stipulated a mobilisation fee.

This fee was intended to facilitate initial project activities, including the submission of pre-construction documents and the commencement of certain physical works.

In a statement issued on Tuesday, May 28, GIDA reiterated that the $12 million payment should not be misconstrued as the final disbursement for the project. 

Given the scale and cost of the Pwalugu Dam project, GIDA insisted that it is evident that this payment represents only a portion of the overall financial commitment.

The statement further clarified that the payment was made in three installments, each corresponding to specific milestones in the project's progress.

"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."

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"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," an excerpt of the statement said.

Already, the Minority in Parliament has taken a decisive stance. Led by the Ranking Member on the Mines and Energy Committee, John Jinapor, they have pledged to pursue accountability vigorously.

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The Ranking Member on the Mines and Energy Committee of Parliament, John Jinapor, has insisted that they will ensure that anyone responsible for any wrongdoing in this matter will be held accountable.

"We will activate all the parliamentary processes to retrieve that amount of money, almost 200 million cedis, that has been dashed to this contractor. Somebody must be held accountable. $12 million can do a lot in this country."

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"So we'll use every legitimate means, every legal means to retrieve the money and punish those who have caused this financial crime and financial loss to the state," he said.

The project, initiated in 2019, was expected to feature a hydro-solar hybrid system with 60 MW of hydropower and 50 MW of solar power, and to be completed in the second half of 2024. 

President Akufo-Addo officially launched the construction of the $993 million Pwalugu multipurpose dam project in the Talensi District in November 2019.

Earlier this month, the Bank of Ghana (BoG) addressed inquiries regarding the $12 million payment made to MS Power China International Group Limited for the project.