The government has been sued for US$3.9 million by Selftech India Pvt Limited for breach of contract in the development of a sugarcane nursery for the Komenda Sugar Factory.
This was made known by the Trade and Industry Minister, Alan Kyerematen on the floor of Parliament in Accra yesterday, while responding to myriad of questions posed to him by members of the Legislature.
The questions also featured areas including prospects of the Africa Continental Free Trade Area Agreement (AfCFTA) to the Ghanaian economy and the 1D1F initiative of government.
“Mr Speaker, Selftech India Pvt Limited claims that the government of Ghana had refused to pay for the development of the 50 hectares sugarcane nursery estimated at US$2.7 million. The company is therefore claiming damages estimated at US$3,900,635 with interest,” he told the House.
The government on the other hand, Mr Kyerematen said contended that the contract was not fully executed and handed over to the ministry.
The government’s rejection of the Indian firm’s claims, the minister said was because the contract was not approved by Parliament as required by the constitution.
“The government is therefore seeking reimbursement from Selftech of an amount of US$5,400,000 with interest being the cost of items paid for but never supplied,” he explained.
As a result of this, Mr Kyerematen said Selftech filed for arbitration in May, 2020 against Ghana at the Ghana Arbitration Centre.
“Mr Speaker, all hearings on the matter has been concluded since October 10, 2021 and both parties are currently waiting for the final award from the Arbitration.”
He clarified that the contract with Selftech was signed in 2016 for the company to cultivate the 50 hectares of land with sugarcane to feed the Komenda Sugar Factory.
On 1D1F, he said over the last four years, the government, through the Ministry of Trade and Industry, had facilitated the setting up of a total of 278 companies and projects across the 16 regions under the One District, One Factory (1D1F) initiative.
Out of the number, 106 of the companies are currently in operation, 148 are under construction and 24 at mobilisation stage.
The government, he said has over the period, successfully mobilised loan for the companies from participating financial institutions totalling an amount of GH¢2.69 billion.
“This amount has been leveraged through the disbursement of an amount of GH¢260 million by government as subsidy to de-risk loans and support interest payments for beneficiary 1D1F companies and projects.”
He explained that the initiative was private sector-led being facilitated by the government.
“The role of government includes payment of interest subsidy on loans granted to 1D1F companies and projects by participating financial institutions; granting of incentives such as waiver of import duties on capital goods and raw materials; and facilitation of access to infrastructure such as electricity, water and roads.”
BY JULIUS YAO PETETSI