Minister of Finance & Economic Planning
Ministries, Accra
Attn: Dr. Kwabena Duffour
SETTLEMENT OF CLAIMS INVOLVING THE REHABILITATION OF THE OHENE DJAN, BABA YARA AND EL WAK SPORTS STADIA
This is in response to your letter dated 12th April, 2009.
In that letter, you stated that Austro-Invest by its letter dated 16th February 2010 indicated that it is prepared to accept one percent (1%) of the total value of the project as compensation and that Austro-Invest had agreed with Mr. Alfred Woyome for the amount to be divided between them.
You also stated that you have a copy of a petition by Mr. Woyome in which be makes a claim for two percent (2%) of the total value of the project, to be shared between Mr. Woyome and Austro-Invest.
Furthermore, you indicated that your Accounts Office require clarity and evidence on the supporting documentation with regard to whether the claim is being made by the consortium that won the bid to conduct the financial engineering led by Mr. Woyome, jointly or separately.
Further to a Ministry of Finance letter dated 4th May 2005, Mr. Woyome made arrangements for the grant of concessional loans for the rehabilitation of the Ohene Djan and Baba Yara stadia and the construction of three others for the Ghana 2008 football tournament, the construction of six (6) hospitals and the Cobait to Irradiation Plant among others.
Mr. Woyome’s role in project financial engineering is further evidenced by the letter from the Ministry of Education and Sports dated 5th July 2005 and an earlier letter from the then Minister for Environment and Science, Prof. Kasim Kasanga dated 28th October 2004. In addition, Mr. Woyome together with Waterville set up offices in Vienna, Austria and Washington D.C. Italy and Switzerland as part of the project financial engineering work for the projects in Ghana (copies of letters attached).
It can be seen from the available documentation that Mr. Woyome, as Alternate Director of M-Powapak at the time, acted as the principal party in discussions with government officials to facilitate the financial engineering of the projects.
Mr. Woyome then entered into an agreement with Austro-Invest on 1st September 2005 (copy attached) in which the Parties agreed to formalize their collaboration into a working business relationship for their mutual and common benefit. The agreement provided that Austro-Invest shall offer service relating to syndication of funds from financial institutions as part of the financial structuring and acquisition of projects by Mr. Woyome. The Parties also agreed that Mr. Woyome will pay Austro-Invest up to 15% of the total amount syndicated. This figure was subsequently negotiated downwards to 1% for Austro-Invest in the 16th February 2010 agreement.
Mr. Woyome’s role, as district from Austro-Invest’s role which was mainly for the syndication of funds, is further evidenced by correspondences with international financial institutions such as the Export-Import Bank of the United States and the Final Demand Letter of J. Michael Farrell, a Washington-based lawyer, who worked on Mr. Woyome’s instructions in respect of a contract involving Austro-Invest (copy of Demand Letter attached). Mr. Michael Farrell has recently threatened to institute legal action against Mr. Woyome and the Government of Ghana for non-payment of legal fees relating to his work for Mr. Woyome (copy attached).
Mr. Woyome has on 19th April 2010 also instituted a civil action against the Attorney-General and the Ministry of Finance to compel the Government of Ghana to pay him GH¢41,811,480.59 being the cost of financial engineering owed to him, interest on the said sum from September 2006 till date of payment and genera damages for the inconvenience suffered by him for the delay in paying the financial engineering fees.
I wish to state therefore that the claim for the payment of two percent (2%) of the total value of the project was made by Mr. Alfred Woyome and Austro-Invest jointly and severally. Mr. Woyome’s claim is for one percent (1%) of the total value of the project engineering fees whilst the claim for Austro-Invest is also for compensation of one percent (1%) of the total value of the project financial engineering fees.
I wish to repeat here that the two percent (2%) that I recommended should be paid Mr. Woyome and Austro-Invest jointly and severally, but in the name of Mr. Woyome in accordance with their agreement of 16th February 2010, was arrived at through negotiations with Mr. Woyome. It is hoped that settlement of this matter through negotiations will forestall the legal action and the huge financial costs that will be incurred as a result of the payment of interest and damages.
Mr. Woyome, by his petition dated 18th February had indicated that the normal percentage charged for such project financial engineering is four percent (4%), but it was negotiated down to two percent (2%) by Government. I requested for the input of the Building Industry Consultants Limited, Mr. Magnus Rex Danquah and the Ministry of Finance to enable me make an informed decision with regard to what should be paid as compensation. It was based on the information received that I gave the opinion dated 31st March 2010 and the subsequent opinion dated 11th April 2010.
It will be recalled that the claim is for project financial engineering fees by Mr. Woyome and Austro-Invest. The financial arrangements were made in respect of the concurrent approval given by the Central Tender Review Board for the award of contract to Vamed Engineering, who transferred its rights in the project to Waterville Holdings (copies of letter of transfer and acceptance attached) and (copy of letter of Central Tender Review Board dated 5th August 2005 attached). It was in these circumstances that the then Government terminated the entire process.
IT IS MY OPINION THAT THIS LETTER DATED 5TH AUGUST 2005 FORMED THE BASIS OF A BINDING AGREEMENT BETWEEN VAMED AND THE GOVERNMENT OF GHANA AND THE PROCESS HAVING BEEN TERMINATED WRONGFULLY BY THE GOVERNMENT, THE CLAIMANTS WERE ENTITLED TO COMPENSATION FOR SERVICES RENDERED.
The claim for two percent (2%) of the total value of the project that Mr. Woyome and Austro-Invest financially engineered, which they have agreed should be paid to Mr. Woyome is therefore in order, hence my recommendation that you authorize payment of the amount due. Your Ministry may, however, negotiate with Mr. Woyome regarding the modalities for the payments of the amount due him.
Finally, I am making available to you the enclosed documentation from the Solicitor for Mr. Woyome for your records. I hope the documents will be of some relevance to you.
Betty Mould-Iddrisu (Mrs)
Attorney-General
Minister for Justice
29th April, 2010
cc: The Chief of Staff
Office of the President
The Castle –Osu
The Deputy Ministers
Ministry of Finance & Economic Planning
The Ag. Chief Director
Ministry of Finance & Economic Planning
The Director, Legal
Ministry of Finance & Economic Planning
From The Woyome/Waterville File (4)
FINANCE MINISTER, KWABENA DUFFUOR …FROM: FINANCE MINISTER, KWABENA DUFFUOR
TO: PREZ. MILLS
CHIEF OF STATE
THE CASTLE, OSU
ACCRA
REPORT ON PAYMENT OF JUDGEMENT DEBT TO MR. ALFRED AGBESI WOYOME
*1: I refer to your letter on the above subject matter dated December 15, 2012.
*2: Available records show that Government in conjunction with the Local Organizing Committee (LOC) for the Ghana 2008 Football tournament advertised for Expressions of Interest in year 2005. The tender was to be awarded on Turnkey basis including the arrangement of requisite financing for the project.
*3: Following the receipt of financial offers, a Finance Sub – Committee with representation from the Ministry of Finance evaluated the financial bids and made recommendations on most competitive bid to the Hon. Minister for Education and Sports. The Committee recommended the bid submitted by Vamed Engineering. The technical bids were evaluated separately by the then Ministry of Education and Sports.
*4: The records also show that the Ministry of Education and Sports entered into a Memorandum of Understanding with Waterville Holdings and Micheletti (Gh) Ltd. on November 30th, 2005 for the turnkey, design, construction, fixtures, fittings, and equipping of the Ohene Djan Accra and the Construction of an 8 – Lane athletic track at El- Wak Stadium.
*5: On 26th April 2006, formal contracts were signed between the parties.
*6: In early 2010, the Honourable Attorney General informed this Ministry of a petition filed by Mr. Woyome for payment of compensation for the cost of financial engineering on mobilization of funds for the staging of the CAN 2008 Football Tournament (See Appendix 1).
*7: By letter dated 31st March, 2010 the Hon. Attorney General informed this Ministry that a settlement had been reached with Mr. Woyome and requested the Ministry to pay 2% of amount claimed (c1, 106,470,587.00).
*8: The Ministry of Finance and Economic Planning by letter dated 12th April, 2010 asked the Attorney General to clarify the petitioner’s claim of right to the amount. (See Appendix 2)
*9: The Attorney General reverted on 29th April, 2010 with the explanation that Mr. Woyome’s claim was supported by documentation including letters from the Ministry of Education and Sports. The Attorney General specifically advised that the claim for 2% of the total value of the project that Mr. Woyome and Austro – Invest engineered, which they have agreed should be paid to Mr. Woyome, was in order and thus recommended that Ministry of Finance and Economic Planning should pay the amount due. The Ministry was also mandated to negotiate with Mr. Woyome on modalities for the payment of the amount (See Appendix 3)
*10: As a result of this Ministry’s refusal to comply with the above, the Attorney General followed up with letter dated 28th May, 2010 stating that as a result of the position taken by the Ministry of Finance and Economic Planning, Mr. Woyome had gone to Court and obtained judgment on 24th May, 2010 in the sum of GHC 41,811,480.59 plus interest of Euro 5 million (GHC 9,447,000.00) and cost of GHC 25,000.00, giving a total of GHC51, 283,480.59 (See Appendix 4).
*11: At this stage, Ministry of Finance negotiated with the Solicitors for Mr. Woyome to pay the money in three equal installments as follows:
*1st installment: GHC17, 094,493.53 to be paid not later than the first week of July 2010
*2nd installment: GHC17, 094, 493.53 due by end of July 2010
*3rd installment: GHC17, 094, 493.53 due by end of August 2010
(See Appendix 5)
*12: Even as the Ministry was in the process of paying the first installment as agreed during the first week in July, 2010 the Attorney General surprisingly went to court for a stay of execution which was refused on 9th July, 2010 (See Appendix 6).
The Court ordered as follows:
*Judgment Debt – GHC41, 811,480.59
*Interest from Sept 2006 - April 2010 – GHC9, 447,000.00
*Costs – GHC25, 000.00
TOTAL – GHC51, 283,480.59
*13: Subsequent to the refusal of the stay of execution application, the Attorney General filed a writ and obtained a partial stay of execution of the terms of settlement.
In granting the partial stay, the Judge ordered that the first installment of GHC GHC17, 094, 493.53 that was due Mr. Woyome on 30th June (payable in the first week of July) plus interest thereon be paid pending the final determination of the suit.
The Court also ordered that Mr. Woyome give an undertaking to refund the money paid him should he lose the case (See Appendix 6).
*14: In a letter dated 7th December, 2010 fro the Solicitors of Mr. Woyome to the Attorney-General which was conveyed to this Ministry by the Attorney-General on 9th December, 2010 the Ministry was informed that a pre-trial settlement conference had taken place and an understanding reached that the parties should attempt an out of Court settlement (See Appendix 7).
In the letter under reference the Attorney-General asked the Ministry of Finance and Economic Planning to honour the terms of settlement including the balance of GH¢34,188,987.06.
*15: In view of the heavy burden on public finances, the Ministry negotiated a phased payment of the debt by installments. This was fully settled between January 2011 and September 2011. The breakdown of the installment payments are outlined below:
*1. January 27, 2011 - GH¢10,000,000.00
*2. April 8, 2011 - GH¢10,000,000.00
*3. September 12, 2011 - GH¢14,188,987.
Total - GH¢34,188,987.06
*16: The Ministry has recently been served with copy of a suit on the payment of additional interest on the judgement debt. The suit is being defended by Honourable Attorney-General.
*17: Enclosed are copies of the relevant documents including the report of the finance bid evaluation committee, the MOU and Contract.
*18: Please revert to us if you require any further clarification on matters outlined above.
DR. KWABENA DUFFOUR
MINISTER
6TH January, 2012
cc: H.E. The President, Castle – Osu
H.E. The Vice President, Castle – Osu
Source: New Crusading Guide - Ghana.
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