GRi Press Review 09 – 05 - 2003
Govt to appeal against "Quality Grain" Judgement
The Position of Ghana on the Arrangements with Valco
NCA to be free of Govt control
Resist attempts to subvert constitution
Kume Preko killers identified?
Rawlings,Obed Make Up
Accra (Greater Accra) 09 May 2003 - The NDC has announced
that the misunderstanding between the party’s Founder, Flt Lt Jerry John
Rawlings and its Chairman, Obed Yao Asamoah has finally come to an end. ''We
have got to where reconciliation manifested openly at Tuesday’s demonstration,
Baba Jamal, NDC’s Deputy General Secretary told the Evening News.
Jamal
said it took sometime for true reconciliation to be achieved because the
process of solving the dispute could not be achieved in one day. He confirmed
that the differences between the two had been a teething one for the party.
The
problem between the Founder and Chairman began prior to the NDC’s National
Delegates Conference in April 2002, when Rawlings openly challenged the decision
of Dr Asamoah to contest the position of chairmanship.
Rawlings
then accused Dr Asamoah of using the party’s resources to campaign for himself.
The conflict however reached its peak last month when Dr Asamoah defied all
odds and questioned the reasoning for the organization of a news conference by
Rawlings, which he thought was not his function.
Now,
Baba Jamal says the bickering is over and the NDC is prepared to enter 2004 as
a united force. ''The searchlight is now on the NPP and we will tackle them and
kick them out in 2004,'' he added. - Evening News
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Govt to appeal against "Quality Grain" Judgement
Accra (Greater Accra) 09 May 2003 - There are indications that the Attorney General’s Department will file an appeal against the judgment delivered by Justice Dixen Kwame Afreh in the $22m Quality Grain Case.
According
to the Daily Guide newspaper, the AG's office feels that the 4-2-2 custodial
sentences imposed on the culprits were not deterrent enough and would encourage
other public officials to fall foul of the charge of “Causing Financial Loss To
The State,” as enshrined in the country’s Criminal Code. – Daily Guide
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The position of Ghana arrangements with Valco
Accra (Greater Accra) 09 May 2003 - In January 2003, the Government of Ghana and the Volta River Authority (VRA) on one part and representatives of Kaiser Aluminium & Chemical Corporation (Kaiser) and the Volta Aluminium Company (Valco), its 90% owned subsidiary which operates an aluminium smelter in Tema, Ghana on the other, met in Washington, DC, USA in the hope of resolving a dispute via the process of mediation under the supervision of the eminent American Jurist, Judge Stephen Schwebel, one-time President of the International Court of Justice at the Hague, Holland.
The
dispute relates to the expiration of the Power Contract in April 1997, which
entails the provision of electric power from the Volta River Authority to
Valco. Although VRA has continued to supply Valco in the hope that a new Power
Contract would be finalised, changing circumstances have now required VRA to
charge Valco a power rate that is commensurate with the cost of production of
electricity. Regrettably, the mediation broke down at the instance of the
Kaiser/Valco team.
Subsequent
to the breakdown of the mediation, Kaiser and Valco have filed a Request for
Arbitration to the International Chamber of Commerce. Ghana's position was and
still remains that long-term partners ought to solve differences via dialogue
rather than via an acrimonious legal battle.
We
in Ghana believe that our commitment to ensuring that we provide optimal energy
services to all our stakeholders should not be wavered even in the face of
Request for Arbitration filed by Kaiser and Valco to the International Chamber
of Commerce. Naturally, Ghana is prepared to go through this process if that is
the wish of Kaiser/Valco.
We
in Ghana are resolute that our message is right and that we are prepared to
bring our case into the public arena in a proactive manner devoid of
unilateralism.
Background
Over
forty years ago, the Republic of Ghana took a bold decision to build an energy
infrastructure for development that could propel the vision of an industrial
and commercially sound economy. The Volta River Development Project in Ghana
was thus implemented with the construction of the Akosombo Hydroelectric
Generating Station, in the process also creating the Volta Lake.
Ghana
contributed 50% of the funds for the project and sought loan financing from the
World Bank, the United States Agency for International Development and the US
EXIM Bank among others. Ghana was solely responsible for investment in
associated infrastructure such as the development and creation of the
industrial township of Tema, which included the new Port at Tema. With the
assistance of the US Government, Kaiser Aluminium accepted to build an
aluminium smelter in Tema to off-take power from the new hydroelectric power
station.
To
facilitate the participation of Kaiser, a complex set of agreements - referred
to as the Valco Agreements - were executed. Among these agreements was the
Master Agreement with its scheduled documents including the Power Contract and
the Long Term Tolling Contract. With Kaiser and Reynolds Metals holding 90% and
10% equity respectively, the Volta Aluminium Company (Valco) was also
incorporated.
In
recent times amendments have been made to various provisions of the Agreements
essentially to establish greater equity and fairness in the arrangements
between Valco and Ghana for the mutual benefit of both parties, as provided for
in Article 49 of the Master Agreement.
Furthermore,
even though the parties have attempted since 1994 to evolve a new power
contract for the future that has not succeeded, VRA has gone out of its way to
assure and provide Valco with energy. Moreover, VRA has continued to provide
power, effectively extending credit to Valco because Valco has refused to pay
the agreed minimum price. To date, significant arrears have accumulated which
Valco has unreasonably withheld and which Valco should pay.
1.
Ghana's Constitution requires that all international business or economic
transactions involving the Republic of Ghana as a party must be subject to the
consideration and approval of Parliament.
1.1.
The Valco Agreements fall into the category of agreements that require
parliamentary ratification. Furthermore, the Volta River Project (Supplementary
Provisions) Act, Act 96 of 1962, specifically subordinated the Master Agreement
and all its scheduled documents including the Power Contract to the control of
the Constitution
1.2.
Ghana's position is that the 1997 exercise of the option to renew the Power
Contract by Valco after the expiry of the initial 30-year period of the
agreement should have been subjected to due Parliamentary consideration and
approval. This has not been done thereby rendering the purported exercise of
the renewal option non-effective.
2.
Hydro energy can therefore no longer be the sole source of energy to supply
Ghana's Power needs. Valco like all other customers can only benefit from the
mixed hydrothermal power system. Today Ghana's power needs are met from a
generation mix of 35% cheaper hydro energy and 65% thermal.
2.1.
Sole dependence on Hydro puts the strategic national resource - the Akosombo
Dam - in considerable and potentially irrecoverable danger.
2.2.
The low level of the Volta Lake considerably limits the output of the power
system and severely constrains the VRA's capability to produce hydro power
2.3.
Notwithstanding the above, Ghana can meet all of its energy needs utilising the
significant thermal power facilities it has prudently introduced to complement
Hydro.
3.
The price payable for power supplied to Valco must relate directly to the cost
of production.
3.1.
The link to the world average power prices payable by aluminium smelters must
be seen in the context that such prices in the reference countries reflect the
cost of producing electricity in those countries. The Valco insistence to have
its prices pegged to the average prices without reference to cost is untenable.
3.2.
Ghana has proposed 3.0US Cents/kWh. Even this price would not remove the
requirement for Government to subsidise VRA's operations to meet the shortfall
in tariff revenue from Valco so that the commercial viability of VRA is not
threatened. It is unacceptable that Ghanaian taxpayers have to subsidise a
private company.
3.3.
After 35 years in Ghana, Valco continues to insist that it should be treated in
a unique category and be allowed to pay rates for power that are far below the
cost of providing that power in Ghana. It costs the Volta River Authority 6.5
US cents/kWh to actually produce electricity from its mixed hydro/thermal
system. It is worthy of note that the cost of producing hydro-power alone is
2.5 US cents/kWh. The ordinary Ghanaian pays in the region of 7.8 US cents/kWh
whilst other industrial customers pay well over 4.5 US cents/kWh. Up till
today, Valco has been paying 1.1 US cents/kWh and has resisted efforts to make
it pay a more realistic price reflecting the current costs of producing power
in Ghana.
4.
Valco owes significant arrears in payments from its utilisation of power from
January 1999 to December 2002 which have been unreasonably withheld thereby
further worsening VRA's financial viability.
4.1.
Arrears arise from Valco's recognition of necessity to introduce thermal power
into Ghana Power System. Valco thus agreed to the introduction of Thermal
Complementation Element (TCE) by the VRA as part of the pricing mechanism
effective January 1999. Valco paid the TCE for a few months before unilaterally
discontinuing payments
4.2.
VRA, notwithstanding the non-payment of TCE by Valco, has not terminated supply
of power.
5.
The Bankruptcy Proceedings of Kaiser, the primary shareholder of Valco with 90%
shares is a matter of critical concern for the Government.
5.1.
Valco has failed to respond to requests by Government to provide complete
disclosure on the bankruptcy and its impact on Valco.
5.2.
From information available to Government, Valco is owed an unsecured sum of
nearly US$146 million by Kaiser. Government fails to see how such a huge debt
could have accumulated and is very concerned that the bankruptcy process may
compromise Valco's recovery of the amount.
5.3.
Government is also concerned that the result of the bankruptcy proceedings may
impact on Valco's continued existence as a going concern. This is so
particularly in view of the complex tolling and revenue arrangements between
Valco and its shareholders, who incidentally are also its sole customers.
5.4.
The threats inherent in the possible outcome of the bankruptcy gives further
concerns to Government about Valco's ability to pay for power (including its
past unfulfilled obligations with respect to the TCE)
6.
Government vehemently disputes the claims by Valco that requesting them to pay
a fair price and allocating energy in a manner responsive to the conditions of
the Ghana Power System amounts to expropriation.
6.1.
It would be inconceivable to suggest that an action by Government to achieve a
power rate that is consistent with the realities of the time amounts to
expropriation.
6.2.
The parties via Article 49 of the Master Agreement expressly agreed to effect
changes in the terms of the Valco arrangements to reflect changing
circumstances. The circumstances of today relating to the power generation mix
and its associated costs of production is a fundamental basis for ensuring
recognition of the need to adjust the power rates payable by Valco. Valco cannot
continue to be insulated from the true costs of producing power in Ghana. Ghana
can no longer subsidise Valco's power consumption at the expense of its
citizenry when such funds are critically needed for our national development.
6.3.
Ever since Ghana signed these Agreements in 1962, Ghana has gone out of its way
to respect them and to protect the existence of Valco's operations. There has
never been any intention to expropriate or nationalise Valco's operations, even
though the Master Agreement gave Ghana the legal option of taking over Valco's
facilities with compensation after the initial 30-year period of the Agreement
6.4.
Over the past 35 years, a number of amendments have been made to various
schedules in the agreements increasingly to normalise the operations of Valco
in the context of the Ghanaian economy especially after the pioneer company
status relief and tax holidays granted Valco expired.
Of
critical significance is the fact that, over the past fifteen years, some
movement has been achieved towards the full normalisation of the operations of
Valco in respect of water rates, smelter site lease payments and port dues.
Ghana intends to work with Valco to complete the cycle, including placing Valco
under the general laws of Ghana in respect to customs duties and taxation.
Indeed, Ghana has also made the requisite overtures to Valco with respect to
Energy Allocation, Power Rate, the Tolling Fee and has over the past few years
sought to conclude arrangements with Valco that would broadly reflect the
circumstances of the times.
7.
Ghana has been in a state of Force Majeure since November 2001 and any
excessive extraction of water from the Volta Lake to meet the power demands of
Valco is a recipe for national disaster.
7.1.
The VRA's notice of Force Majeure continues to subsist. The Volta Lake, which
serves as the reservoir for hydroelectric power production at Akosombo,
experienced very low inflows of water in 2002. This occurrence has impaired the
VRA's ability to produce optimal quantities of energy from the hydro-electric
facilities. Valco is all too aware of this fact.
7.2.
With the thermal power sources that have been developed to complement the Ghana
energy system, Ghana is capable of supplying its customers, including Valco,
with electricity reliably but this has to be paid for. The genesis of the power
allocation to Valco for 2003 represents the technical and operational
conditions on the ground.
8.
Ghana cannot ignore the changed circumstances today.
8.1.
Article 49 of the Master Agreement specifically enjoins both parties to act to
revise the Agreements to reflect changing circumstances. This includes a review
of its Pioneer Company Status and move towards normalisation of Valco's
operations in all areas to the mutual benefit of both parties
8.2.
Ghana is not using its Constitution or other legal subterfuge as an excuse to
unilaterally effect unwarranted changes in the Valco Agreements. The need for
change is a consequential response to the tenets of the Valco Agreements themselves.
Valco as a Ghanaian corporate citizen is all too aware of the physical
conditions on the ground.
9.
Ghana has expressed strong disapproval for false aspersions.
9.1.
Contrary to the false aspersions cast against Ghana in international circles,
Ghana would continue to respect and collaborate with all its business partners
including Valco and Kaiser and Ghana also expects that Valco and its
shareholders will accord the Government of Ghana and its officials due respect
at all times and also cease from creating false impressions about the
Government of Ghana in order to win unwarranted sympathy
Finally,
in spite of the impending Arbitration proceedings, it is Ghana's expectation
that a mutually satisfactory arrangement would ultimately be agreed by both
parties so that the long-standing business relationship that Ghana and Valco
have nurtured over the past 35 years would continue.
The
Government of Ghana wishes to reaffirm its commitment to good governance and
the rule of law, constitutional democracy and freedom of speech. We would not
relent in our efforts to promote the private sector as the primary engine of
growth in Ghana. -Government of Ghana
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NCA to be free of Govt control
Accra
(Greater Accra) 09 May 2003 - Plans are far advanced to make the National
Communication Authority an independent regulatory body. This follows the
resignation of the Minister of Communication as chairman of the communication
authority, which has laboured to assert its independence in the fast-expanding
ICT sector.
The Minister of Communication, Albert Kan Dapaah announced this during a familiarization tour of the offices of KASAPA, a private mobile phone service operator in Accra.
He
said the Ministry of Communication in collaboration with the NCA would soon
enter into regular consultations with the various communication providers to
ensure effective communication network in the country. He urged service
providers in the communication industry to make their services affordable to
the ordinary Ghanaian. - MyJoyOnLine
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Resist attempts to subvert constitution
Cape
Coast (Central Region) 09 May 2003 - The Chairman of the National Commission
for Civic Education (NCCE), Laary Bimi, has called on Ghanaians to intensify
efforts to protect the current constitutional democracy and resist any attempt
to subvert the Constitution.
He
said Ghanaians owe posterity the duty to ensure that the Constitution is
restored if it should be subverted. Bimi said this in a speech read on his
behalf at a three-day workshop as part of the third annual Constitutional Week
celebration at Busua Beach Resort.
The
theme for the workshop, which was organised by the United Nations Development
Programme (UNDP), is, “Harmonising the Relationship Between Traditional Rulers,
Assembly and Unit Committee Members for Sustainable the country’s Development.”
He
said the NCCE has simplified the Constitution into ordinary language to
demystify the document and to encourage Ghanaians to exercise their rights to
protect democracy. Bimi also stressed the need for chiefs to conduct their
traditional governance in a way that will promote peace and stability.
He
said that chiefs need to encourage their people to appreciate the 1992
Constitution as the best frame of political governance that guarantees freedom
and justice.
The
Deputy Western Regional Minister, Ms Sophia Horner-Sam, who launched the
workshop, urged assembly and unit committee members to fully discuss and
exhaust issues that are likely to cause conflict before decisions are taken.
She said development at the district level could be enhanced when the
stakeholders learn to do a lot of consultations. Ms Horner-Sam expressed the
need for chiefs to ensure that peace reigns in their communities for
development to take place.
She
expressed concern about the numerous chieftaincy disputes, which are hindering
development in the Western Region. Ms Horner-Sam, however, noted with
satisfaction that the Western Regional House of Chiefs has formed a
reconciliation committee to resolve some of the chieftaincy cases out of court.
The
Assistant Resident Representative of the UNDP, Franklin Asamoah-Mensah,
stressed the need to strengthen the relationship between traditional and
contemporary governance, especially at the grassroots level.
He
said the position of chiefs in the Ghanaian community is crucial to peace,
stability and sustainable development. The Western Regional Director of the
NCCE, Kwaku Baa Owusu, urged chiefs, assembly members and civil society
organisations to complement each other in order to remain relevant to the
communities.
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Kume Preko killers identified?
Accra (Greater Accra) 09 May 2003 - Two young men have approached the leadership of the Alliance For Change (AFC) and volunteered an account of the circumstances surrounding the death of a 14 year-old JSS pupil and others who were killed by Commandos during the ''Kume Preko'' demonstration in 1995.
The
two young men who have indicated their preparedness to appear before any
properly constituted independent commission of enquiry have also identified one
of the killers.
They
gave the name of the commando who shot and killed Ahunu Hongar as Lantei
Charles, stationed at the so-called Sankara Barracks at the Castle during the
NDC era. Four people were killed during the peaceful demonstration in protest
against the introduction of VAT by the NDC government.
The
leader of the ''killer gang'' was identified by his nickname, which is ''Black
Shirt''. He was also a commando and based at the Sankara barracks.
The
AFC is in the process of gathering solid evidence from various sources with
which the Rawlings regime would be indicted before both Ghanaian and
international public opinion. - Crusading Guide
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