Gov’t cancels ¢362m Jospong contract
The Government has cancelled a $74m contract awarded to the Jospong Group of Companies to supply waste bins, a contract JoyNews investigation found to have been highly inflated.
The cancellation of the contract which translates to ¢362m follows JoyNews investigations in 2017 by award-winning journalist Manasseh Azure Awuni.
JoyNews found the procurement of one million waste bins and 900,000 pieces of disposable bin liners was inflated by at least ¢148 million.
The contract awarded was in November 2016 by the Ministry of Local Government and Rural Development. The order to award the contract was given by the Office of the President in a letter signed by then Chief of Staff, Julius Debrah.
Checks at the Registrar General’s Department revealed that all the five companies handpicked for the single-sourced contracts belonged to the Jospong Group, owned by Joseph Siaw Agyepong.
According to the contract, the cost of the one million waste bins was $60 million while the cost of the 900,000 pieces of bin liners is over $14million. These amounts do not include Value Added Tax.
The contract was awarded through sole sourcing, with approval from the Public Procurement Authority (PPA).
When JoyNews requested a pro-forma invoice from the Jospong Group as part of the investigation, the price of a 240L waste bin was quoted at 150cedis.
That’s the price for the public. But it was sold to government for ¢258 or $60 with the exchange rate of $1 to ¢4.3 at the time the contract was signed. The payment for the contract was to be made based on the prevailing exchange rate at the time of the payment. Currently, $1 is equivalent to ¢4.9.
The Ministry of Local Government and Rural Development had an ongoing waste bins contract to a different company and charged ¢15 for transportation, so JoyNews made the cost of transportation for the Jopong Group ¢20.
Also, a piece of disposable bin liners from Jospong Group, according to pro-forma invoices taken from them at the time of our investigation was ¢0.98, less than ¢1.
This means the 900,000 pieces of bin liners cost less than ¢1million (about $200,000).
But the contract quotes the price of a piece of bin liner at $15.6 or ¢70. This means the bin liners which should cost less than ¢1million or $200,000 ended up costing ¢63 million ($14,040,000).
Together with the waste bins, this contract appears to have been inflated by over ¢148 million.
Even worse, Joy News also was found the Local Government ministry had procured 150,000 waste bins for District Assemblies across the country, which it had been unable to distribute. Visits to metropolitan, municipal and district assemblies across the country showed that the waste bins procured earlier had been left to waste away. But while the ministry struggled to distribute the 150,000 bins, it went ahead to award a contract for 1,000,000 bins from the Jospong Group at an inflated cost.
In September 2017, the Minister of Justice and Attorney General, Gloria Akuffo, ordered the police CID to commence criminal investigation into the waste bins and other such questionable sanitation contracts after the JoyNews investigative series dubbed ‘Robbing the Assemblies’. A cabinet committee headed by the Senior Minister, Yaw Osafo Maafo, was also formed to comprehensively review the contract. It is this committee that ordered the cancellation of the waste bins contract.
The cancellation was contained in a letter from the Local Government ministry communicated to the businessman.
”I have been directed to invite your attention to the fact that the contracts have lapsed on account of non-performance by the contracting companies.”
No monies have been paid to the companies awarded the contract.