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Crime & Punishment | Nov 24, 2004

CP Files Suit Against Gov't

Chronicle

Construction Pioneers (CP), one of the leading foreign construction companies in Ghana is currently locked up in various legal battles with the Government of Ghana both locally and at the International Court of Arbitration.

Speaking to the Chronicle, a management source that wants to remain anonymous said it had been very defensive of its rights and hesitated not to lock horns with the Ghana Government in litigation anytime it thought its rights were being trampled upon, or that legitimate contracts entered into were being breached.

The company told The Chronicle that unlike most local construction companies that suffered in silence when their contractual rights were trampled on, they had been quick to the draw and engaged the Government of Ghana in several legal battles both locally and abroad.

It was one such legal battle filed by CP against the Ghana Government at the ICC that led the Ato Quarshie administration of the Ministry of Roads and Highways into an amicable settlement with CP in respect of disputes arising out of the execution of the Accra City Centre Improvement Project, the Kaneshie - Mallam Rehabilitation Project, the Daboase-Takoradi Road project, the Accra City Roads Project and the Ring Road West Extension Project.

In two Memoranda of Understanding signed on 9th December 1994 and 5th December, 1996 respectively, the Government of Ghana and CP agreed to an amicable settlement by which government was to make payment in agreed amounts to settle claims made by CP on the various projects under dispute.

Some of these payments were questioned by the incoming NPP administration and described as fraudulent. They have since become the subject of investigation and prosecution by government.

CP claimed it had become the target of victimization following the change of government in 2001 because since the New Patriotic Party (NPP) took over the reins of Government in January 2001, CP had been swarmed by various investigative agencies including the Serious Fraud Office (SF0), Auditor General's Office, Attorney General's Dept. and several others.

The company recalled that there was a Special Audit commissioned by the Auditor General and executed by Messrs Baffuor Awuah and Associates. CP responded to the audit report with a sharp reply to the Auditor General, describing the audit as an exercise whose results were clearly predetermined to charge CP for fraud.

Since CP's almost 200-page response to the audit was forwarded to the Auditor General in June 2003, there has been no reaction from that office to date.

CP successfully claimed against government and at an arbitration tribunal, was awarded payment for claims on unpaid certificates of over Euro 24 million and over ¢ 22 billion plus interest on the asphalt concrete for the Biriwa-Takoradi Project.

It said while the Arbitral Tribunal was sitting, government filed a suit in an Accra Fast Track High Court to revoke the authority of the tribunal upon the excuse that it had refused to take into consideration, accusations of fraud leveled against CP by government.

The arbitration tribunal, nonetheless, went ahead and entered an award for CP, stating that an award on claims in respect of the dispute did not preclude the Government of Ghana bringing whatever criminal actions it intended against CP in the local courts.

Several other disputes have been referred to the international court by CP against the Government of Ghana. They include the outstanding payment for the Nkontompo sea defence project, which remains unpaid although the project was awarded by the NPP Government and carried out under a certificate of emergency.

In the case of non-payment for works done on the Obuasi Township Roads, the Attorney General has entered no contest to the claims by CP. Yet officials of the Ministry of Finance remain pig-headed in their refusal to pay CP for legitimate contract works awarded under both the previous NDC administration and the current NPP government.

The company said the net effect of these would be the award of interest charges against government in international arbitration, which represent financial loss to the state.

CP, which represents one of the biggest foreign direct investments in the construction industry, has been in operation in Ghana since 1976.

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