PURC exposé: $600,000 worth of contract sole-sourced to IT firm

In the continuing exposé on questionable payments at the Public Utilities Regulatory Commission (PURC), it has emerged that the utility regulator paid a little over $400,000 for software and other services to a US-based firm through a contract that was sole-sourced.

Documents intercepted by Joy News reveal that PURC first paid $200,000 out of a total cost of $400,000 for software from a US-based IT firm, Power Systems and Energy Consulting, without withholding tax.

The Commission also spent an additional $208,000 for what it calls ancillary services, again, without holding any taxes.

Power Systems Energy Consulting was to supply a transmission line database software and outage manager software.

The software, Dayzer Ghana Model, is a predictive tool that is supposed to inform the user about the current and future state of the power system up to ten years in advance or more. The software is believed to be able to predict whether there will be power generation shortage or inadequate transmission capacity.

The balance of $200,000 was yet to be advanced to the US-based firm.

An audit report sighted by Joy News observed that as at the end of the year 2012, 50% of the cost of the $400,000 software representing 200,000 dollars had been paid, leaving a balance 200,000 dollars.

The documents, however, revealed that the total cost of the ancillary services which was 208,440 dollars had been paid.

A staff of the Commission who spoke Joy News on condition of anonymity says the Commission was supplied with a demo by the US-based firm, but, both software and ancillary pricing services have not been functional for some time now.

But in an interaction with Joy News’ investigations desk, the Executive Secretary of PURC Samuel Sarpong explained that the software has been installed and is used as and when it becomes necessary.

The Commission breached section 84(2) of the Internal Revenue Act (Act 592) when it failed to withhold any taxes on the payments made to the US-based firm.

The Management of PURC in its response said the contract payment under the agreement is net of all taxes, adding that there are outstanding amounts to be paid to the IT firm.

The Management said the Commission will duly pay the taxes when payment has been completed.

Subsequently, the contract has been reviewed by the Public Procurement Authority to include 15% as the tax component, bringing the cost of the contract to over 700,000 dollars.

Story by Ghana | Myjoyonline.com | GN