Pwalugu Dam: $11.9m paid to contractor was for mobilisation – GIDA

Source The Ghana Report

The Ghana Irrigation Development Authority (GIDA) has revealed the $11.9 million payment to the contractor responsible for the Pwalugu Multipurpose Irrigation Dam project.

GIDA said the $11.9 million payment was designated as mobilisation funds and not the final payment for the work done.

In a statement issued on Tuesday, May 28, to defend the payment, GIDA asserted that it was part of the contractual agreement with Messrs Power Construction Corporation of China (POWERCHINA).

GIDA emphasised that the payment to POWERCHINA was made in accordance with the contract’s terms, 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.

GIDA reiterated that the $11.9 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 instalments, 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.”

“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.

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However, the Minority in Parliament has pledged to pursue accountability vigorously.

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. $11.9 million can do a lot in this country.”

Meanwhile, the Chairman of the Energy and Mines Committee, Mr. Samuel Atta Akyea, has joined calls for an investigation into the allocation of $11.9 million to the project, which has yet to show tangible results.

For him, demanding answers from the contractor by Parliament will be a good place to start instead of politicising the issue.

“The first point of the engagement is to bring the contractor, maybe with the consultant as well, and then we begin to grill the contractor that has received $11.9 million; if there’s documentary evidence to that effect, how did you apply it? Why have you abandoned it? Sometimes, we colour everything as political. But some contractors, too, can be very funny.

“They’ll receive the money and then probably they’ll abandon the project. I am not saying that is what the contractor has done, but let’s probe into what has happened and the first person we should engage is the contractor. Because the allegation is that it is not a politician who is a beneficiary of a million dollars, but a contractor,” he said on May 27.

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.


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