Plans by government to hand over the controversial Africa and Middle East Resources Investment Group’s (AMERI Energy) power plant to a new company to run for 15 years have sparked heated debate between the Majority and Minority sides in parliament.
While the Majority argues that the new arrangement will save Ghana about $400 million over a 15-year period, the Minority believes that the country will rather pay more for the power project.
Under the new agreement, a new company – Mytilineous International Trading Company – will take over the management of the AMERI power plant for 15 years.
The new company has offered to pay AMERI an amount of $52,160,560, with government paying the remaining $39 million to the Dubai-based AMERI Energy to wash its hands off the deal entirely.
The agreement covering the new deal was laid before Parliament yesterday for approval.
According to the agreement, the price at which government will now buy power will be reduced from 14.5919 cents to 11.7125 cents per kilowatt hour (kWh), which will lead to a savings of $405.067 million during the 15-year period.
The new agreement said in part that the drop in tariff of 2.8793 US cents per kWh has resulted in a yearly cost savings of about $27.004 million each year, which means the total cost of savings over the 15-year period is $405.067m.
Minority says Ghana will pay double the price
Reacting to the new deal, the Minority said the new agreement is terrible, saying it would make Ghana pay double the amount for the original contract to AMERI.
Minority spokesperson on energy, Adams Mutawakilu disputed the claim by government that the new deal would save Ghana $400 million.
He said the new deal will rather make Ghana lose money, thus the old deal should have been allowed to stay.
“There are a lot of questions for the minister to answer. This agreement will be worse. They say ours is worse. Theirs will be terrible,” he said.
He said the cost will be about twice what AMERI was claiming.
“The old deal was perfect, and that is why the Attorney-General vindicated us,” he said.
Mutawakilu asked government to provide details on the cost of the amended AMERI agreement for parliamentary ratification.
He challenged government to provide clear details on the cost of the renegotiated deal, saying, “We are all aware that the plant that should cost $360 million, AMERI gave it to us at $510 million.
“However, in this agreement, he did not put how much we will be paying with this new agreement and how much it will cost, so we want to find out how much we will be paying a year in respect to this agreement.
“We have our figures, but we would like him to either confirm or otherwise. If our figures confirm, then we can speak authoritatively on it. In the agreement as well, I saw some savings of $405 million, but we beg to differ because we have different figures on that. We would like to verify those figures from him and then come out publicly with better information,” he added.
“We are worried that this document, which is very important and of interest to Ghanaians, has just been laid last night. Soon, we will be rising, either tomorrow or tomorrow next, and this will put constraint on us to scrutinise the document. We will be meeting the minister this afternoon, and we have a lot of issues to discuss because the purpose for which you will ask for the abrogation, we are not sure that it is the cure in the agreement,” Mutawakilu said.
The $510-million AMERI deal was signed between the Mahama-led government and AMERI Energy in 2015 at a time when the country was reeling under a heavy power paralysis.
However, the deal triggered a well of controversy as many questioned the cost, which was believed to be too expensive.
METKA deal is $350m
Meanwhile, Metal Constructions of Greece S.A. (METKA), an Engineering, Procurement and Construction (EPC) contractor, revealed that the entire cost of the fast-track engineering, procurement and construction services, as well as operation and maintenance support, for a 250MW AMERI Energy power plant in Ghana is $350m.
EPC works of six months cost $250m
According to METKA, the project has an overall duration of five years and a budget of $350m, consisting of fast-track Engineering, Procurement and Construction (EPC) works of six months at a cost of $250m.
Operation and maintenance cost of $100m
According to the company executing the contract, the project has a four-and-half-year operation and maintenance cost (O&M) contract worth $100m.
The company explained that the AMERI power plant has build-own-operate-transfer (BOT) characteristics.
This implies that METKA takes the country risk (guarantees are in place) during this period, and will be partly financing the project with its own cash for a certain time period.
METKA announced on September 17, 2015 that its 100%-owned subsidiary, Power Projects Limited, signed a new EPC plus O&M contract with the Government of Ghana for a 250MW power plant.
E&P paid GH¢25m to prepare site for AMERI
Aside the $510 million, Ghana government also paid Engineers and Planners (E&P) GH¢25 million to do civil works to make the site ready for the fixing of the AMERI Energy plant.
The then opposition New Patriotic Party (NPP) promised to review the agreement if it wins power, and shortly after it did, the Akufo-Addo-led government quickly set up a 17-member committee, led by Philip Addison, a lawyer, to investigate the details of the agreement.
The committee, among other issues, advised the government to review the agreement with AMERI Energy.
The review has been done and a new agreement has been brought to Parliament for approval.
Portions of the agreement
Equipment payment –– US$850,000 per month per unit
Number of units –– 10
Output of each unit (site) –– 23MW
Total capacity –– 250MW (ISO)
Guaranteed output –– 230MW
Guaranteed availability –– 90 per cent
Payment per year –– US$102 million
Variable charge per year –– US$0.005/kWh (US$16.6 million per annum)
Applicable tariff (Year 1 to 5) –– US Cent 14.5918/kWh
Applicable tariff (Year 6 to 20)–– US Cent 10.4149/kWh