Anti-corruption campaigner kicks against loan facility meant to enhance public transport system

Posted: July 28, 2010 in Crime, Economic Reporting
Tags: , , , ,

Anti-corruption campaigner and Member of Parliament (MP) for Asikuma-Odoben-Brakwa, P.C. Appiah-Ofori has kicked against a loan facility for the purchase of 50 additional buses to enhance the operations of the Metro Mass Transport (MMT) Limited.

P.C. Appiah-Ofori, MP for Asikuma-Odoben-Brakwa

He has in effect, requested for the audited accounts of the MMT to enable Parliament scrutinize their operations before approving the loan to purchase the buses.

According to him, the MMT has failed on numerous occasions to submit its audited accounts, cash flow statements and amortization schedule for the period it has operated. He said until such a directive is complied, approval of the loan should not be entertained.

Mr. Appiah-Ofori said this in Parliament yesterday when he was contributing to the approval of a motion on the loan agreement between the Government of the Republic of Ghana and Commerz bank AG of Belgium, for an amount of €8,210,129.00 for the financing of the second batch of fifty VDL Jonckheere buses and spare parts for the MMT.

“In 2003, the NPP administration brought a request to Parliament to give approval of a loan for the purchase of one hundred and fifty buses for the MMT, we approved it. In 2006, another request came for us to give approval for fifty buses. I was then a member of a member of the Finance Committee, and so when the matter was referred to us, I insisted that the MMT should render accounts for the money given to them, before additional money is approved.

Specifically, I asked that the company should submit to us their audited accounts for the period under review. I also requested for the cash flow statement and amortization schedule of the company to enable Parliament approve of the loan to MMT, so that at the end of the day, it will not become the responsibility of the Government of Ghana to pay this. They pleaded that we should allow for the approval of the loan and that they will bring the audited accounts to us, but till date, nothing has come before us,” he noted.

He argued that failure to scrutinize the operations of the MMT will amount to “dissipating state resources to the benefit of the MMT.”  “If they are not prepared to show us the amortization schedule, we should not sit down unconcerned for inefficiency to be passed onto government as a cost. People will misappropriate state funds, steal and at the end of the day, it will become a burden for the government, which we should not entertain that,” he added.

The MMT has 1,400 fleet of buses under its disposal, but only 800 are in good use. The remaining 600 are broken down. With this, MP for Old Tafo and Ranking member of the Finance Committee, Dr. Anthony Akoto Osei, in contributing to the motion urged the Minister for Roads and Highways to immediately decide on what to do with the broken down vehicles.

“We need to decide whether to scrap them and use the resources to buy new buses or we need to decide whether they are capable of being repaired and put back on the road,” he noted.

MP for Aowin, Mr. Mathias Kwame Ntow, on his part requested for equitable distribution of state resources to the benefit of all districts in the country. In its report to the house, Chairman of the Finance committee, Mr. James Klutse Avedzi said the facility is to enable the country to be supplied with the second batch of 50 VDL Jonckheere buses and spare parts to help boost the operations of the MMT.

In addition, the importation and use of the high occupancy buses would help reduce congestion in the cities and lower fuel cost which will be an added advantage to the passenger to pay less, the Committee noted.

Furthermore, the Committee noted that the buses would be delivered during the fourth quarter of 2010 and would be consigned to MMT for operations countrywide to alleviate the problems that the travelling public in both the urban and rural areas face.

However, Mr. Avedzi noted that some members advised that since Government continues to make investment into the MMT, the shareholder structure should be recalculated to reflect the true state of affairs.

In March 2003, the Ministry of Transport on behalf of the Government of Ghana and some financial institutions incorporated the MMT Limited to operate mass transport services throughout the country. The MMT currently operates in all the Regional Capitals and some major towns and cities in the Regions.
Following the actualization of the Government’s policy on the reintroduction of mass transportation, the Belgian Government in 2006 granted approval for the supply of 150 VDL Jonckheere buses under concessionary financing. All the 150 buses have since been delivered to the MMT.

In view of the durability and sustainability of the buses, the then Ministry of Transportation in 2008 made a request for additional buses. The Government of Belgium through a financial intervention with the Commerzbank AG, Brussels Branch again provided a credit facility for the supply of additional 150 Jonckheere buses to augment MMT’s bus fleet for its expansion program.

That notwithstanding, the Finance Committee noted that due to budgetary and production constraints, the Belgian Government has agreed to stagger the financing and the delivery of the buses into three batches of 50 buses per batch.

The first batch of 50 buses together with their spare parts and Global Positioning System (GPS) to track and monitor their movement and usage have been delivered to the MMT.

In pursuance of the deal, the Committee said the Belgian Government has made available a concessionary loan of €8,210,129.00 through the Commerzbank AG, Brussels Branch and an additional grant of €1,896,734.00 for the supply of the second batch of 50 buses.

The credit agreement has the following terms; total contract amount-€10,106.863(including insurance premium), loan amount- €8,210,129.00, interest rate- 0%, moratorium period- 18 months after signing of the loan agreement, repayment period- 7 years by 14 semi-annual installments, grant amount- €1,896,734.00 and grant element of 35.78%.


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