24.08.2011 Politics

Parliament's Finance Committee approves $3bn loan

By Daily Guide
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24.08.2011 LISTEN

The Finance Committee of Parliament has recommended for approval by majority decision, a $3 billion loan agreement between the Government of the Republic of Ghana and the China Development Bank.

The Minority members of the Committee disagreed with the decision, especially with portions governing subsidiary agreements, but lost when a vote was called, Citi News understands.

The loan is meant to finance a number of infrastructure projects, including the Eastern Corridor roads and Accra Plains Irrigation project.

The Report, signed by Hon James Klutse Avedzi, Chairman of the Finance Committee and Peace Fiawoyife (Ms) Clerk to the Finance Committee, is expected to be laid before the House later today.

A copy of the Report sighted by Citi FM's Parliamentary Correspondent Richard Sky read:

'Majority of members of the committee agreed that request 1.1 asking the House to agree the master agreement was in order and therefore the committee should recommend it to the House for approval

'However, the minority disagreed with that opinion.

'Honourable members of the Committee were of the opinion that the projects earmarked for funding under the facility are critical to the nation's development, especially the gas infrastructure development. The Majority therefore opines that approval must be given to enable the subsidiary agreements to be negotiated and presented to the House for approval.

'Again they suggested that since the terms of the agreement were not in question, approval should be given in accordance with Article 181 of the 1992 Constitution.

'The dissenting Minority however argued that since the definition of 'facility agreement' includes subsidiary agreements, approval of the facility agreement would necessarily imply the approval of the subsidiary agreements which are not yet known.

'They were also of the opinion that the approval of the Master Facility Agreement (MFA) is inextricably linked with the approval of the other requests and therefore it would be improper to approve the MFA without seeing the relevant subsidiary agreement.

'They suggested that the China Development Bank (CBD) should be given only a 'Letter of Comfort' otherwise the agreement should rather be treated as a Memorandum of Understanding and be approved to give government the greenlight to negotiate the subsidiary agreement and bring them back for approval in that context so that it does not constitute a binding contract…

'The request asking Parliament to approve the earmarking of 40 % of the financing for disbursement under subsidiary agreement to enable government to access the best technology and expertise available was similarly being premature since such subsidiary agreements are not available and even when they become available later it would still be required to be laid before Parliament for their consideration and approval

'The committee therefore recommends to the House to consider the request redundant at this time.'

The Committee concluded:
'Upon critical examination of the Master Facility Agreement, the committee by Majority decision finds that the facility would contribute to provide a comprehensive and accelerated infrastructural development across the country.

'The committee therefore by majority decision recommends to the House to adopt this report and approve by resolution for signing by government, the Master Facility Agreement for a three billion United States dollars (US$3,000000000.00) term loan facility between the Government of the Republic of Ghana and the China Development Bank to finance agreed infrastructure development projects under the Ghana Shared Growth and Development Agenda (GSGDA) in accordance with Article 181 of the 1992 Constitution and Sections 3 and 7 of the Loans Act 1970 (ACT 335).'

In another development, Majority MPs from the Western Region have commended the President for superintending the contracting of the $3 billion loan for the development of infrastructure in the Western Region. At a press conference addressed by Hon Emmanuel Kofi Buah, MP for Ellembele and Deputy Minister for Energy, the MPs pledged their support for President Mills' Better Ghana Agenda.

Source: Citifmonline