GH¢9.2m street lights contract awarded before approval — Audit Report

GH¢9.2m street lights contract awarded before approval — Audit Report

A contract worth GH¢9.2 million for the supply of solar-powered street lights went into execution even before an approval was given in 2016, the 2020 report of the Auditor General on the Public Accounts of Ghana has revealed.

According to the report, by the time the approval was given, about 5,030 units of the solar lights had been supplied without recourse to the procurement law by the Ministry of Local Government and Rural Development.

The ministry, the report said, handpicked Oasis Africa Resources Limited for the supply and installation of street lights instead of subjecting the supply transaction and processes to competitive procedures as prescribed by the Public Procurement Act.

“Management of Oasis Africa Resources Limited on August 10, 2015 wrote to the Ministry, referencing earlier discussions made between the company and the ministry and quoted US$2,300,000.00 for the contract,” it said, adding “the ministry in its bit to regularise the transaction, applied for approval from the Public Procurement Authority (PPA) to use the restricted tendering method on January 25, 2016.”

The report said the ministry shortlisted Oasis Africa Resources Limited, Energy & Power Ventures as well as Fersil Ghana Limited, and included in the application for approval by the PPA.

It said the ministry got approval from PPA on February 26, 2016 and wrote to the shortlisted firms on February 29, 2016 requesting them to purchase, complete and submit bids not later than Thursday, March 3, 2016.

“We noted that Oasis Africa Resources Limited (the successful bidder) submitted two bids; one in its name as Oasis Africa Resources Limited and another as Energy & Power Ventures Ltd. This came to light during our review of the contract file where we noted that the Managing Director of Energy & Power Ventures Ltd, Mr. Kofi Tandoh, witnessed the contract signed between the Ministry and Oasis Africa Resources Limited. He also raised invoices and requested for payment in his capacity as Director of Business Development for Oasis Africa Resources Limited,” the auditors pointed out.

The report said Mr. Tandoh again signed the letter mentioned and the bid securities for both companies were obtained from Provident Insurance Co. Ltd on the same day and serially following each other and gave the bid numbers for Oasis Africa Resources Limited and Energy & Power Ventures Ltd as PIC/DC/BON/16-000011 and PIC/DC/BON/16-000012 respectively.

The report said that the Central Tender Review Board (CTRB) on April 8, 2016, declined concurrent approval request sent to it by the ministry on March 21, 2016 and requested the Entity Tender.

“Surprisingly, even before the letter to CTRB for concurrent approval could be sent, management on 15th March, 2016 served notification of award letter to Oasis Africa Resources Limited without recourse to CTRB's concurrent approval,” the report revealed, adding “it is also worth mentioning that the CTRB finally gave concurrent approval on 5th October, 2016 when 5,030 units of the solar lights had already been supplied and installed by the contractor.”

“From the forgoing, Management action is in breach of the Public Procurement Act and therefore could not lead to the attainment of value for money as contained in Section 13 (2) (e) of Public Financial Management Act 2016 (Act 921),” it said, adding “we recommended that Management should be sanctioned as prescribed under Section 92 of Act 663 as amended for breach of provisions of the Public Procurement Act as indicated above.”

The report said that “Management responded by stating it is well noted Mr. Tandoh inadvertently signed for both Oasis Africa Resources Ltd and Energy & Power Ventures Ltd. The Ministry has written to him to explain this anomaly,” adding “in our opinion, management's explanation pointed to only one irregularity amongst the lot enumerated above. The rest of the breaches were not addressed.”

The report said the ministry admitted in further explanation that it took the decision under “the exigency of the moment (urgency), with the government determination to provide solar lights to the affected communities and pressure groups, approvals were sought from regulatory authorities including PPA and CTRC.”

It added that “the correspondence from Oasis Africa Resources Limited on 10th August, 2015 to the Ministry was just unsolicited proposal as he was already on the Ministry's data as a potential supplier. On 25th January, 2016 when the Ministry finally decided to procure the solar lights, the Ministry applied for Restrictive Tendering from PPA with the shortlisted Companies including Oasis, Energy and Power Ventures and Fersil Ghana Ltd.”

The report also said Mr. Tandoh explained that he had earlier been an employee of Energy and Power Ventures, but he resigned and joined Oasis, adding further that his signature appearing on both documents was not in error or connivance to help Energy and Power Ventures to win the contract for the supply of the solar lights as opinioned by the Auditors.

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