Some members expressed grave concern about the choice of NTHC as the project implementer and requested that Government takes a second look at the kind of license the company holds, its capital base, the kind of business they are capable of doing and their track record of managing Government funds.
The Committee recommended that other financial institutions be brought on board in the management of the facility.
House to approve subsidiary agreements
The Committee- demanded that all Subsidiary Agreements emanating from the Master Facility Agreement should be brought to Parliament for consideration and approval.
Funding for build, operate and transfer (BOT) projects
Some Hon Members of the Committee expressed concern about the fact that a loan is being procured for build-operate transfer investors to execute some of the projects_ In their opinion, such investors should be applying their own funds to such projects.
Deputy Minister for Finance and Economic Planning, Hon Seth Terkpeh, however, explained that even though Government is convinced of the viability of some critical projects, investors have been reluctant to invest in those areas, and hence as a pilot, Government is funding the projects with sound recovery mechanisms so as to convince and attract more investors into viable road and other infrastructure projects in the country.
The Deputy Minister assured that recovery would be vigorously pursued to ensure that the impact of the projects on public debt is reduced to the barest minimum
Approval of the entire amount
Some members of the Committee were of the opinion that since each individual project would have to be approved under a separate Subsidian/Agreement, it would be more reasonable to approve those specific project agreements individually, and not the umbrella amount of US$3 billion. The Minister for Finance and Economic Planning, Hon Dr Kwabena Duffuor, however, explained that such bit- by-bit approval by the Board of CDB would delay the implementation of the projects.
It would also require that the Board of CDB_has to sit again and again to approve each loan, thus making the Whole process unnecessarily cumbersome and fraught with uncertainty. The approval of the Master Facility Agreement would, however, facilitate easy access by Government to the Facility.
In accordance with clause 12.1 of the Agreement,
"all payments to be made by the Borrower to the Lender under the Finance Documents shall be made free and clear of and without any Tax Deduction unless the Borrower is required to make a Tax Deduction, in which case the sum payable by the Borrower (in respect of which such Tax Deduction is required to be made) shall be increased to the extent necessary to ensure that the Lender receives a sum net of any - deduction or Withholding equal to the sum which it would have received had no such Tax Deduction been made or required to be made."
Waiver of stamp duty
Clause 12.1.1 further requires the Government of Ghana (Borrower) to
"pay or procure a waiver of all stamp duty, registration and other similar Taxes payable in respect of any Finance Document".
Parliamentary decision requested
In the Memorandum submitted by the Minister for Finance and Economic Planning to Parliament, the Minister had requested Parliament to give approval to four (4) different requests.
Firstly, the Minister had requested Parliament to consider and approve for signing by Government, the MFA for a US$3 .0 billion term loan facility between the Government of Ghana and the China Development Bank (paragraph 1.1 at page 2 of 12 of the Minister's Memo to Parliament).
Secondly, the Minister had also requested Parliament to approve the use of relevant ABFA to support repayment of the Facility, under the escrow mechanism agreed with CDB (paragraph 1.2 at page 2 of 12 of the Minister's Memo to Parliament).
The Minister further requested Parliament to approve Government's proposal to on-lend the proceeds of the financing to relevant governmental agencies that would be responsible for implementing the projects (paragraph 1.3 at page 2 of 12 of the Minister's Memo to Parliament).
The fourth and final request was for Parliament to approve government's proposal to earmark up to 40 per cent (40%) of the financing for disbursements under subsidiary project agreements (Subsidiary Agreements) to ensure that Government can access the best technology and expertise available to develop the projects (paragraph 1.4 at page 2 of 12 of the Minister's Memo to Parliament).
Out of these four requests, the Committee reached consensus on three. Consensus was reached on requests 1.2, 1.3, and 1.4. On the request for Parliament to approve the use of the ABFA, the Committee agreed that the modalities have been spelt out in the Petroleum Revenue ManagementAct, 2011 (Act 815) which sufficiently empowers the Government to use the ABFA to support the Budget.
The Committee therefore agreed that such request was not necessary since Act 81 5 deals sufficiently with the matter. The Committee is therefore of the view that the request is not necessary and should not be considered at this time.
On request 1.3 asking Parliament to approve the on-lending of the proceeds of the Facility, the Committee agreed that even though the principle of on-lending is good, its terms are not yet available and so the request is deemed premature. The Committee therefore recommends to the House to consider the request redundant at this time.
The request asking Parliament to approve the earmarking of 40 per cent (40%) of the financing for disbursements under Subsidiary Agreements (SAs) to enable Government to access the best technology and expertise available was similarly deemed premature since such Subsidiary Agreements are not yet available and even when they become available later, they would still be required to be laid before Parliament for consideration and approval. The Committee therefore recommends to the House to consider the request redundant at this time.
Inability to reach consensus
Majority of the members of the Committee agreed that request 1.1 asking the House to approve the Master Facility Agreement was in order and therefore the Committee should recommend it to the House for approval. However, the minority disagreed with that opinion.