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June 1, 2016 | Special Report

$3.6m - $9.8m Contract Inflation Scandal: Ex. Dvla Boss Exonerated

....No Monies Paid, Attorney General Cancels Contract....AG Documents Reveal

Ernest Addo || New Crusading Guide
$3.6m - $9.8m Contract Inflation Scandal: Ex. Dvla Boss Exonerated

The former Driver and Vehicle Licensing Authority boss, Dr. Justice Amegashie, whose public image suffered huge blot following the mysterious jump in the contract sum between the Authority and Foto-X; from $3.6m to $9.8m in what skeptics say is the biggest scandal at the Authority can now heave a sigh of relief.

Documents available to this paper after months of tip-toeing at the Attorney General department infers that instead of demonizing the former DVLA boss, Ghanaians should rather praise him, for it was his vigilance and legal wit that has saved the nation from paying huge sums of dollars to Foto-X.

According to the documents, dated February 18, 2016, and signed by Helen A.A. Ziwu (Mrs.), after the Attorney General reviewed the documents and correspondence, and taking into account the discussions it had with the DVLA and Foto-X, it identified a couple of issues as pertinent to the fair solution of the matter.

The letter revealed that the issue that arose for discussion in respect of the Agreement dated the 2nd of August 2012 executed between DVLA and Foto-X (2nd Agreement) was whether the 2nd Agreement was valid, effective and enforceable.

It pointed out that the 2nd Agreement had been executed by the parties and they also executed what they referred to as “Statement of Understanding between the DVLA and Foto-X.

It said that the Statement of Understanding stated that the 2nd Agreement was not finality and that an addendum would be signed to address issues raised by both parties that had not been addressed in the 2nd Agreement.

“It is reasonable to conclude the 2nd Agreement is incomplete and its conclusion depends on the resolution of the issues which the parties had identified. In effect the parties have not reached final agreement and therefore the 2nd Agreement cannot be enforce”, it emphasized.

Information available to this paper reveals that the introduction of a ‘Statement of Understanding’, which captured that the agreement was not a finality and that an addendum would be signed to address issues raised that were not covered in the 2nd agreement was initiated by Mr. Amegashie. This obviously shoots down the widely held view that Mr. Amegashie changed contract figures; since it is untenable that one would alter contract figures when he took steps to ensure that the agreement was not finality.

Meanwhile, our checks at the DVLA revealed that no monies have been paid to Foto X as a result of the clause in the contract which stated that the agreement was not finality.

With respect to the 1st Agreement, the issues in the documents were what the nature of the agreement dated 11th day of July, 2016 (1st Agreement) by Foto-x and DVLA was, how much the consultant was entitled to be paid in respect of the 1st Agreement, whether or not based on the 1st Agreement there had been any overpayment to the Consultant which must be discovered by DVLA and whether the 1st agreement should be terminated.

The documents revealed that Clause 7 of the agreement provided that for services rendered pursuant to annex A, the Client shall be paid twenty percent of the total revenue by the Consultant during the entire life of the project.

“An amount not exceeding Two Million seven hundred and seventy two thousand United States Dollars (US$ 2,772,000) shall be invested by the Consultant in the Turnkey project adding that the amount had been established based on the acceptance of the financial proposals submitted by the Consultant which included all of the Consultant’s professional cost, per diem and profits as well as any tax obligations that may have imposed on the Consultant”, it revealed.

The documents indicated that by the language of clause 7 the parties had set a ceiling on the contact sum which included all cost to be incurred by the Consultant regarding the performance of the contract as well as profit.

It said that with the six-year tenor of the contract, the Consultant was entitled to recoup his investment as well as profits in the sum of Two Million seven hundred and seventy-two thousand United States Dollars (US$ 2,772,000) and thereafter nothing more.

The Attorney General and Minister of Justice letter pointed out that it was reasonable to conclude that any money which may have been paid to the Consultant after reaching the limit of US$2,772,000 and any payments made after the expiration of the contract term had been wrongfully paid to him and same must be recovered adding that any further sums paid in respect of the consumables must also be covered.

It pointed stating that the breakdown of what was described as “estimated investment cost” set out at page 22 of the Financial Proposals (Annex A to the 1st Agreement) did not include profit which raise the issue of whether any amount of money paid to the Consultant beyond the limit of US$2,772,000 includes all costs and profits of Consultant.

It indicated that there was the need for DVLA to determine the extent of overpayment made to Foto-X and to take steps to recover the amount by which the Consultant was overpaid.

Whether or not the 1st Agreement should be determined, the letter stated that Clause 3 of the 1st Agreement provided duration of 6 years noting that the 1st agreement had expired and did not require any termination.

Making recommendations in respect to the two Agreements, the document from the Attorney General and Ministry of Justice noted said that the sloppy drafting made it difficult to tell whether the 1st Agreement was a BOT or a turnkey.

It further said that the breakdown of what was described as estimated investment cost set out of the Financial Proposals (Annex A to the 1st Agreement) did not include profit which raised the issues of whether any amount of money paid to the Consultant beyond the limit of US$ 2,772,000 could be profit.

It pointed out that from the tenor of the Clause 7, the Consultant was entitled to recoup his investment as well as profits in the sum of Two Million seven hundred and seventy-two thousand United States Dollars (US$2,772,000) and thereafter nothing more.

“It is reasonable to conclude that any money which may have been paid to the Consultant after reaching the limit of US 2,772,000 and any payments made after the expiration of the contract term had been wrongfully paid to him and same must be recovered”, the documents indicated.

It said DVLA should determine the extent of overpayment made to Foto-X and take steps to recover the amount by which the Consultant was overpaid.

It would be recalled that in the 4th November 2015 issue of the Ghanaian Times, extracts of the EOCO report on the DVLA was published.

Amongst other things, it was stated that the report said the then Chief Executive Officer of DVLA, the man who introduced eye test, before driver’s license is issued could be held responsible for gross negligence leading to the over payment of the various forms of money to FOTO – X. The Attorney-General agreed with EOCO that the overpayment in respect of the 1st contract of the tune of GH¢15,447,558 should be recovered from Messrs. Foto-X.

With regard to the consumables an amount of GH¢2.892, 233 million was paid to Foto-X.

Information available indicates that the erstwhile Chief Executive submitted the initial bill to the Auditor-General for advice since he was in doubt of the claim.

The Auditor-General took between September 2009, and 1st April 2010 to undertake an exhaustive study of the operations of the authority to produce report and offered its advice. Amongst the advice are as follows:

DVLA should pay the claim to Foto-X. Henceforth the Controller and Accountant General should assume the responsibility of procurement of the consumables should take over the procurement of the PVC cards in accordance with the financial regulations, namely: regulation 210 and 211.

Stay glued as this paper goes into the wild to expose who at the DVLA inflated the contract sum and what the Economic and Organised Crime Office (EOCO) said about the whole deal.

Video News

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