MR FIRST DEPUTY SPEAKER
VOTES AND PROCEEDINGS AND THE OFFICIAL REPORT
Mr Speaker, page 7, paragraph 2, in respect of (b), the Hon Ameyaw-Akumfi moved an amendment for the deletion of the word "source". Mr Speaker, before you put the Question, that was the case, so "source" should not be in (b). It should be "the prevention of marine pollution", delete "source".
And the amendment was agreed to?
Yes, Mr Speaker: Mr First deputy Speaker Thank you very much; Table Office to take note. Page 8...21--
Mr Speaker, page 21, "The committee met on Wednesday, 24th August, 201 1 at 11.00 a.m. and finalised . . "It should be "finalised discussions . . "
Very well, thank you. Hon Members, the Votes and Proceedings of Wednesday, 24" August, 2011 as corrected be adopted as the true record of proceedings.
Item 4(b) - Chairman of the Finance Committee, is your Report ready?
Mr Speaker, the Report is not ready.
Very well. Item number 5 - Yes, Hon Majority Leader?
Mr Speaker, I wish to humbly inform the august House and your good-self that following the laying of the China Development Bank (CBD) LoanAgreement in Parliament, the joint Finance and Poverty Reduction Strategy Committee had occasion to meet as a joint committee in Koforidua to look at the Agreement, and then they came out with certain concerns, particularly from the minority group. Subsequently, when the Committee submitted its Report to this august House concerning the Agreement and capturing the concerns of the Committee, Leadership met and decided that in the supreme interest of this country, it is important that this august House is seen to be looking at the CBD Loan in consensus.
Accordingly, we invited Government through the Minister for Finance and Economic Planning to re-look at the areas of concern and see whether we can do some further cleaning on it to enable the House debate it as a body. I am happy to indicate that the Hon Minister for Finance and Economic Planning has drawn my attention to the fact that the concerns or the directives given to him by the Leadership of the House have been addressed. In the circumstance, the Hon Minister for Finance and Economic Planning has come to this august House and I will crave your indulgence to invite him to inform the House accordingly. Mr Speaker, The document would speak for itself; the concerns, we know them already. The document had already been deliberated at length, several days by the Committee and all the members have had the opportunity to look at the Agreement and even the Committee Report. So there is nothing new about it that takes time to be looked at. But the Committee would come back and advise Leadership and then we would programme the House accordingly during the course of the day. Due to the exigency of the situation, we could have come by way of an addendum. But this is an emergency Sitting and time is not on our side. So I want to crave the indulgence of the House to take note of this exigency situation and only endorse the decision taken by Leadership on this matter. S 0 with your kind permission, you can invite the Hon Minister for Finance and Economic Planning to do as indicated.
Hon Minister for Finance and Economic Planning?
Mr Speaker, thank you for this opportunity. Mr Speaker, I confirm that the concerns expressed by the joint Finance and Poverty Reduction Strategy Committee have been addressed by Government through the Ministry of Finance and Economic Planning. I therefore apply to withdraw the old document and substitute a new one.
Mr Speaker, I think we are happy that we have this announcement that some concerns raised at the meeting in Koforidua and also some others raised at the Leadership meeting yesterday have been taken on board by the Hon Minister to affect the original document submitted to us. The extent to which it addresses the concerns certainly remains to be seen' and I would plead that we leave it to the relevant Committee to consider and appropriately advise Parliament. But it is just that to give them a few hours would be prejudicial. We should beware of the STX saga. Let us not revisit it, let us leave it to the Committee, for
Hon Members, in line with what the Majority Leader, the Hon Minister for Finance and Economic Planning and the Minority Leader have said, the original Report is accordingly withdrawn. What we had to do really, was to prepare an addendum to have the new Report duly laid which would capture that other additional business. But I have the privilege of discussing with Leadership of both sides and they said that in order for the Committee to go back earlier and look at it, that can be waived, so that they would have it laid. So accordingly, the Report is withdrawn and therefore the Finance Committee's Report. is deemed to have been withdrawn, because that Report is based on that main Paper. So once the Paper is Withdrawn, then it follows; it goes without saying that the Finance' Committee's Report is deemed to have been withdrawn. On this note, I would call on the -
MrSpeaker, I think the appropriate thing to do is to call on the Chairman to withdraw the Report.
Hon Chairman, withdraw your Report; it is consequential-
Mr Speaker, in accordance with Order 82 of the Standing Orders of the House and as consequential to the withdrawal of the original Agreement, the Report of the Joint Committee has accordingly been withdrawn.
Hon Members, there is no need to take debate on this matter at this stage, because the truth of the matter is that, once the main document has been withdrawn, it means that you cannot put something on nothing; it would not stand -
A Yes, you are the Ranking Member.
Mr Speaker, in principle, you are right. But it is not the Chairman's Report; it is the Committee's Report. So the appropriate thing was to do some consultation, so we agree to withdraw.
Hon Ranking Member, you are right. But once the Agreement is withdrawn, what report do you have, what are you to report on? But l agree with you that it is the Committee's Report and he should have consulted you.
Should we deem it that consultations have occurred?
Yes, l agree. [Laughter] I agree entirely with you. So Hon Minister for Finance and Economic Planning, we would suspend our rules of the order of addendum for you to lay the new document.
As to when that Report would be ready is entirely a matter within the purview of the Committee- But they must try as much as possible to work very hard and bring the report to us within a reasonable time.
Mr Speaker, I just want to be sure, what was read, is it the amended one? I did not hear it; I want to be sure.
The title of the Agreement is the same, but because that one has been withdrawn-
But it is the amended version?
It is the new one, but the title is the same. Hon Members, in view of the fact that the other Loan Agreement is not ready, what do we do? I need some direction from Leadership. Hon Majority Leader, do we suspend the House, since - the Upper East Loan Agreement is not ready- Hon Members, order!
Yes, 1 will humbly apply that we suspend proceedings- [Interruptions]
The time now is five minutes to 11.00 o'clock; we can suspend proceedings until 12.00 noon and advise ourselves. One hour.
Hon Majority Leader -
Just a minute. [Pause] Mr Speaker, 1 thought we could take item numbered ll on page 5 of the Order Paper. We could start with that one because it is not contentious and the amendments are basically from the Committee. It is subject to your discretion. If we could fill in the time with that one, subject to your discretion, Mr Speaker.
Hon Majority Leader, are you sure when we start the amendment today, we can complete it tomorrow and rise? This is because my experience is that when you start an amendment and you suspend, and you go, the reasoning behind the earlier amendment can be lost on Hon Members and it creates problems. If you are sure that if we start it today, we can complete it tomorrow, then l will start it. Mr Avoka Yes, we can take them. They are not controversial.
Very well. [Pause]
Mr Speaker, to give the joint Committee on Finance and Poverty Reduction the opportunity, I think we can adjourn because the Hon Minister himself is not available to assist us in prosecuting the amendments - the Hon Minister for Health is not available.
So Hon Majority Leader, let us have an indication as to when we are coming back. . Mr Avoka: One o'clock l.00 pm. Thank you.
Hon Members, the IIouse is suspended; we shall reconvene at one o'clock. 10.59 a.m. - Sitting suspended. 2.50 p.m. -Sitting resumed.
Hon Members, we have Order Paper Addendum. Hon Members, when the House suspended, we agreed to reconvene at 1.00 pm. I was in the Speaker's Lobby up to 1.00 pm. I did not receive any communication from the Committee or from the Leadership of the House. So -I went to my office until I was called well after 2.00 p.m. to come back. So we have to proceed and Sit outside the prescribed period. If we had come at 1.00 p.m., we would have evoked the rule, Standing Order 40 (3). But we are continuing so we are going to Sit outside the prescribed period Hon Members, laying of Papers by the Chairman of the'Finance Committee.
Hon Members, item number 2 on the Order Paper Addendum.
Mr Speaker, much as we want to facilitate this, we have just come and I have seen that we have the Report. Copies of the Report have been circulated and I would want to plead that maybe, Hon Members be given the opportunity to study it. I thought that it was going to be a completely new Report. Looking at the back page, it does appear about the same August, 2Ol1. I do not know what has changed. It is important that we have time to read and I guess more importantly, the amended Agreement itself, so that we have time to digest. As for the issues, I think they are known, so when we come to addressing them against the backdrop, then we can have an informed debate. I think that is the way to proceed instead of just having arrived in the Chamber to see the new Report', then we move a Motion to start the debate. I think that will be too much for us. So I want to plead that we have time to read this which should not take perhaps too long. But more importantly, we should have the amended Agreement for all Hon Members.
Hon Minority Leader, before I came, I asked whether the documents had been made available. The understanding that I got before I entered was that they have printed enough copies of the Report for Hon Members here.
Mr Speaker, while I appreciate the intervention by the Hon Minority Leader, I want to indicate as a fact that the committee report that we had this morning before it was withdrawn, is substantially the same like the one that they have gone to amend. The amendment was in respect of only one page, -the last page and that is only a paragraph, a paragraph in the last page of the original Report. Otherwise, from page l to the end is the same. So there is nothing new about it. The only difference is that the original Report that talks about filling of gaps and the rest of them has been deleted. Otherwise, the Report is the same. The Report is the same except a paragraph.
Hon Majority Leader, there are two A issues being raised by the Minority side. * The first is with regard to the Agreement itself. Some of them are claiming they have not seen - [Some Hon Members: All of us.] I know that there was a committee meeting so I do not know how you went for a committee meeting without seeing an Agreement. I do not see how you could have a committee meeting without the Agreement. That is the first point that is being made. The second point being made by the Hon Minority Leader is to allow them some few minutes to go through the Report and the Agreement. Mr Kyei-Mensah-Bonsu Mr Speaker, if there is any change in the Report, certainly one would have to juxtapose it with the old one to assure oneself that there has been a change. In any event the change cannot be effected in a vacuum. It will be predicated on the amended Master Agreement. So we need to have this. Mr Speaker, to flash back, I want to quote Mr Speaker, as a Member of Parliament-
Please, once I am presiding do not quote me. [Laughter]
Mr Speaker, I will excuse that. But it is important. The joint Committee met and when I enquired from the Hon Minister, only fifty copies of the amended Master Facility Agreement (MFA) had been sent. The joint Committee number forty-five. The rest of us will not have it and this enterprise is not for the Committee members alone. It is for the entire House. So it seems to me that the better way to do it is to anvil copies to Hon Members, let us study it and I believe when we come to debating it, if we allow ourselves maybe today, and - copies are given to Hon Members, those of them who do not have, then We can attend to it.
Mr Speaker, in fairness to everybody, I would want Hon Members to have an informed debate on this subject. I know that the new Agreement was laid earlier in the day. But if Hon Members say that at that time they did not have copies, we can break for another 30 minutes and then they can look at it and in about one hour we can comeback and debate. I am talking about time now. I do not know what their problem is. It is in everybody's pigeon hole. It has been there for some time.
Mr Speaker, I think this far, we have worked with understanding. We came, they have brought the Report, it is beyond 2.00 pm we have allowed it to be laid. They have only distributed copies of the Report of the Committee. We do not have copies of the amended MFA. So, what we are
Mr Speaker, I think we should be guided by our experience, We have been here for three days, since Monday; today, we have had some movements that certain gaps have been filled. We do not have a problem with that. We are asking that Hon Members be given the amended Agreement and the Report to study for the rest of the day and come tomorrow. What is the problem? To debate tomorrow, what is the problem? I do not see it. We want to do a diligent job. People must be well informed of the issues. We do not want to have to just defend positions without relating to the Agreement. How can we debate without the amendedAgreement? So, I think that we should not reduce this Parliament to a rubber stamp, we want to do a diligent job.
Let me take the last comment from the Hon Minister for Communications.
Mr Speaker- [Interruption]-- Thank you very much. We have been - [Interruption]
Hon Members, order!
Mr Speaker, as you are well aware, Parliament was primarily recalled to consider this important Loan Agreement of US$3,.0 billion and this morning, guided by yourself and Leadership, we were told that there were some changes which were to be made to the MFA. My understanding is that the changes are not substantially different from those in the Agreement that was earlier laid In the circumstance that the Report is now being distributed, you may just want us to have (conferring with the Leadership) just 30 minutes break, after which we can come and commence debate on this particular matter. This is not the first time reports are being delivered and after 3 O minutes, they are debated. It is possible, 30 minutes to one hour and we should come back and then look at it.
Hon Members, this is a very important Loan Agreement and you have to study it and come and debate but there are some Hon Members who are aware of all the information in the document. I will let the Motion be moved and seconded, then we suspend it and then we continue tomorrow. The Motion will be moved- [interruption] by the Hon Chairman and if the Ranking Member or whoever will second, will second then we come back tomorrow and start a full-blown debate. By that time, everybody would have taken his time to study the document very well. I think that, that way we can make some progress.
Mr Speaker, I want to believe that you want to facilitate the business of this House, that is why you are making this proposal for us to consider. But I would plead with you, the documents are not meant for the Chairman of the Finance Committee and the Ranking Members alone. They are supposed to be for the House so, once we concede that we have not had time to read, let them distribute as many copies as possible and then perhaps, we make a plea that Hon
Hon Minority Leader, it is true that the document is not meant for the committee members, you are absolutely right. I agree with you. But it is equally true that the committee members can start the debate and I am not asking - They are only moving the Motion and seconding and then we end it there. Then tomorrow,.we start the full-blown debate, that is all. We are only moving the Motion today- [Interruption] and then they second. The person who is seconding can decide to have the liberty to contribute tomorrow; then at least, some work has been done. Otherwise, why have we detained ourselves from morning up to this time. The understanding that I have with Leadership, the spirit - This morning, when I met with Leadership, my understanding was that, since it was only the gaps that were being filled, when we come back, we should adjourn, the Committee goes to look at it, -then they bring the Report, then we can start the debate. That was the spirit of the discussion in the Speaker's Lobby this morning. It was on that basis. Otherwise, we would have decided that, let us come back tomorrow to start the debate because of that, that all of us have been waiting up to this time only to come back and say that we should not. Let the Chairman move the Motion and then let the second person second with liberty to contribute. He can reserve his contribution for tomorrow and then we adjourn the House.
MrSpeaker, if Hon Members have not been given copies of the amended MFA, it will suggest that the document is not properly before us. So, on what basis are we going to move the Motion? Secondly, you made a statement that when we met at the pre-Sitting meeting, we agreed that the only missing link related to the gaps. Mr Speaker, that cannot be true. That was not what we agreed on. The Hon Minister said, the concerns from the Committee and also from the Leadership meeting which we held 'yesterday have been taken on board. And We said we wanted to see to what extent those concerns have been factored into the amended document. Nobody said that the only concern is -
Hon Members, the rules of this House are very clear. The only time that we start a debate in this House is when a Motion is moved and seconded; until a Motion is moved and seconded, there is no debate. Also, the debate is not starting today, it is starting tomorrow, so, they move a Motion, then it is thrown for the debate of the House.
Thank you, Mr Speaker. [Interruption.] Please, I would want to humbly plead with distinguished Hon Members of this august House that time is not on our side even though we want to do diligent debate. So, I would want to prevail and appeal to Hon Minority Leader and all my Colleagues that with the Speaker's intervention, we are only moving the Motion and then somebody will second the Motion and we will end it
Mr Speaker, I beg to move, that notwithstanding the provisions of Standing Order 80 (1) which require that no Motion shall be debated until at least forty-eight hours have elapsed between the date on which notice of the Motion is given and the date on which the Motion is moved, the Motion for the adoption of the Report of the joint Committee on Finance and Poverty Reduction Strategy on the Master Facility Agreement between the Government of the Republic of Ghana and the China Development Bank (CDB) for a loan of US$3.0.billion to finance infrastructure development projects under the Ghana Shared Growth and Development Agenda (GSGDA) may be moved today.
Mr Speaker, I beg to second the Motion. Question put and Motion agreed to. Resolved accordingly. Mr First Deputy Speaker; Hon Members, item number 3, Chairman of the Committee. Government of Ghana/ChinaDevelopment Bank(CDB) Master Facility Agreement for a Loan of USS 3.0 Billion Chairman of the Committee (Mr James K. Avedzi); Mr Speaker, I beg to move, that this Honourable House adopts the Report of the joint Committee on Finance and Poverty Reduction Strategy on the Master Facility Agreement between the Government of the Republic of Ghana and the China Development Bank (CDB) for a loan of US$3.0 billion to finance infrastructure development projects under the Ghana Shared Growth and Development Agenda (GSGDA).
Mr Speaker, we want to reiterate the point that apart from the members of the Committee no other Member of Parliament has a copy of the amended Agreement - [Interruption.] Now the motion is going to make referral. If you have not studied it, you cannot follow. I thought that you said we are moving the procedural Motion before we start the debate tomorrow which is fine. But if he is now going to the subject matter then it means that some cannot follow and we should remember that the Chairman should be able to convince everybody here. So if he is making argument and people cannot follow, it rather does not contribute to consensus building. I was thinking that once he had moved the procedural Motion, we will agree that we will debate tomorrow. What is the problem? You read the Report tomorrow, we would have studied it and we would follow the debate but whatever he says
Hon Members, we have made a lot of progress so" far. We have done a lot of consultations behind the scenes among ourselves. We should not destroy what we have done so far. All that we are doing is that it is the Committee's Report which everybody has, that is what the Chairman is reading. What I am saying is that, the person will second with liberty to contribute tomorrow. That is all. It will be entered in the Votes and Proceedings according to our rules then the full debate takes place tomorrow. Then at least, we would not have wasted all our time from morning, the time we suspended to this time. Hon Chairman of the Committee, continue.
Mr Speaker, the Master Facility Agreement between the Government of the Republic of Ghana and the China Development Bank (CDB) for an amount of three billion United States Dollars (US$3,000,000,000.00) to finance the infrastructure development projects under the Ghana Shared Growth and Development Agenda (GSGDA) was laid in the House on Thursday, 25th August, 2011 by the Minister for Finance and Economic Planning, Hon Dr Kwabena Duffuor. Pursuant to the Standing Orders of the House, the Agreement was referred to a joint Committee on Finance and Poverty Reduction for consideration and report. The Committee met and considered the Agreement with the Minister for Finance and Economic Planning, Hon Dr Kwabena Duffuor and his Deputies, Hon Seth Terkpeh and Hon Fiifi Kwetey; Minister for Roads and Highways, Hon Joe Kwashie Gidisu; Minister for Transport, Hon Collins Dauda and his Deputy, Hon Peace Dzifa Aku Attivor; Minister for Communications, Hon. Hamna Iddrisu and his Deputy, Hon Ernest Attuquaye Armah; Minister for Trade and Industry, Hon Hannah Tetteh; Deputy Minister for Energy, Hon Emmanuel Armah-Kofi Buah. Others are Deputy Minister for Food andAgriculture, Hon Nii AmasaNamoale; and officials from the Ministry of Finance and'Economic Planning, Ghana Ports and Harbours Authority (GPHA), Ghana Irrigation Development Authority (GIDA), Volta Lake Transport Authority (VLTA), Ghana Railway Development Authority (GRDA), Ghana National Petroleum Company (GNPC), Ghana National Gas Company (GNGC), Bulk Oil Storage and Transportation Company (BOST) and hereby presents this Report to the House pursuant to Order 161(1) of the Standing Orders of the House. 1.1 Appreciation The Committee wishes to express its profound gratitude to all Ministers of State, Deputy Ministers, officials and all other persons who appeared before the
Committee to assist in its deliberations on the Master Facility Agreement. Their inputs were very helpful to the Committee in coming out with this Report. The Committee hopes to count on their co- operation and assistance in future endeavours. 2.0 Background His Excellency President John Evans Atta Mills visited the People's Republic of China in September, 2010 at the invitation of His Excellency President Hu Jintao. During the said visit, a Framework Agreement for China Development Bank's Comprehensive Project Finance Facility for Ghana was signed to extend. the coverage of bilateral economic co- operation to the mobilization of financing for Ghana's development agenda. In April, 201 1, following two previous rounds of discussions with CDB in Beijing, China (January, 2011) andAccra (February, 2011), the Ministry of Finance and Economic Planning (MOFEP) and CDB signed an agreed "Indicative Term Sheet" subject to necessary internal approvals. This formed the substantive basis for the Master Facility Agreement. Cabinet approved the draft Term Sheet to facilitate the negotiations with CDB in April, 2011. Another discussion with CDB was on a special line of credit for the development of African SMES. With the successful negotiation and initial-ling in June/July, 2011 of the drafi: Master Facility Agreement on the approved financing terms, the Agreement is now before the House for consideration and approval. The Master Facility will involve the financing and construction, primarily of infrastructure expansion and development projects in priority sectors under the GSGDA. During the negotiation sessions, the President's Task Force on the Sino-Ghana Technical and Economic Co-operation Agreements also held talks on a similar Framework Agreement signed with the China Exim Bank in September, 2010, including successful discussions in April, 201 1 for a Supplementary Loan Facility in the amount of US$168 million for the Bui Hydroelectric Project. Segments of the Eastern Corridor Project were also discussed. 3 .0 Purpose of the loan The purpose of the Facility is to obtain funds from CDB to undertake infrastructural development projects in Ghana pursuant to the GSGDA. 4.0 Terms of the Loan The terms of the Facility are as follows: Total Facility amount - US$3,000,000,000.00 TRANCHE A --US$l,500,000,000.00 Grace period -Up to 5 years Tenure - 15 years Interest rate -- 6 months Libor + 2.95 per cent Upfront fees - 0.25 per cent p.a. Commitment fee -l .00 per cent p.a. TRANCHE B -US$1.5 billion Grace period - Up to 5 years Tenure - 10 years Interest rate - 6 months Libor + 2.85 per cent
Upfront fees - 0.25 per cent p.a. Commitment fee - 1.00 per cent p.a. 5.0 Observations and recommendations The Committee observed that the goal of the Facility is to enhance the efficiency and effectiveness of the oil and gas sector operations, value-adding industrial minerals processing ventures, and agro industrial ventures. The Committee noted that the Master Facility will be disbursed under individual subsidiary project agreements (Subsidiary Agreements) to be signed between implementing agencies and contractors for the construction and establishment of the projects to be financed from the Facility. Actual disbursements of funds will be for projects for which the Subsidiary Agreements have been approved by the Government of Ghana (GoG) through its Parliament and the China Development Bank (CDB). It was noted that the Facility will be disbursed through two windows (that is, Tranche A and Tranche B) and that specific disbursements under each of the tranches will be determined project-by- project as would be spelt out in the Subsidiary Agreements. The following projects are proposed to be financed under Tranche A of the Facility (Tranche A is further divided into A1 and A2): Tranche A1: Infrastructure renewal for integrated industrial minerals processing ventures (a) Western Corridor Infrastructure Renewal Project - Railway Components [Rehabilitation/ modernization of Takoradi- Kumasi and Dunkwa-Awaso railway lines in line with Scenario 1 of EU funded feasibility study conducted by Bonifica]. Project Developer is the Ghana Railway Development Authority (GRDA). Project implementation is under a performance-based design- build-maintain contract (estimated amount of US$5 00 million). (b)Western Corridor Infrastructure Renewal Project-Takoradi Port Phase 1 Retrofit/Rehabilitation. Project Developer is the Ghana Ports and Harbours Authority (GPHA). Project implementation is under a performance-based design- build-maintain contract (estimated amount of US$15 0 million). (c) Sekondi Free Zone Project - Development of on-site infrastructure and utility services for the proposed industrial minerals processing estate, including an alumina refinery. Project to be implemented by a Free Zone Developer to be licensed by the Ghana Free Zone Board (GFZB) under a build-op crate-trans fer contract (estimated amount of US$l 00 million) Tranche A2: Infrastructure development for accelerated agricultural modernization (a) Accra Plains Irrigation Project- Phase 1 covering 5,000 hectares. Project Developer is the Ghana Irrigation Development Authority (GIDA). Project
implementation is under a build-operate-transfer contract (Estimated Amount of US$100 million). (b) Coastal Fishing Harbours and Landing Sites Project-Axim, Dixcove, Elmina, Winneba, Mumford, Senya Bereku, James Town Teshie Gomoa . Fetteh, Ada, Keta, Moree. Project Developer is the Ghana Ports and Harbours Authority (GPHA). Project implementation is under- design-build contracts (Estimated Amount is US$15O- 250 million). (c) Eastern Corridor Multi-modal Transportation Project" - Volta Lake facilities components -upgrade of ferries/pontoons and landing sites for Kpando/ Amankwakrom, Kete Krachi- Kwadwokrom, Yeji-Makango, Tepa Abotoase, Dzemini; as well as upgrade of Akosombo and Buipe ports. Project Developer is the Volta Lake Transport Authority (VLTA). Project implementation is under design-build-maintain contracts (Estimated Amount of US$ 150-500 million). The following projects are proposed to be financed under Tranche B (Tranche B is sub-divided into B1 and B2) Tranche B1: Oil and gas sector infrastructure development (a) Western Corridor Gas Infrastructure Project - Offshore Gathering Pipeline, Early Phase Gas Processing Plant, Onshore Trunk Pipeline including gas dis_patch facility; retrofit of Tema, Oil Refinery (TOR) to enable processing of natural gas liquids (NGLs); and deployment of helicopter fleet for enhanced surveillance of facilities. . Project Developer is the newly -created Ghana National Gas Comp any Limited, and project implementation is under performance-based design-build-maintain contracts (EstirnatedAmount of US$850 million). Phase 1 of the Takoradi Petroleum Terminal Project - to be sited at Pumpuni. Project Developer is the Bulk Oil Storage and Transportation Company Limited, with project implementation under performance-based design- build-maintain contract (Estimated Amount of US$200 million). (c) Western Corridor "Oil Enclave" Toll Road Redevelopment Project Project Developer is the Ghana Highway Authority. Project implementation is under a design-build- maintain contract (Estimated Amount of US$150 million). Tranche B2: Special projects Deployment of an ICT-based integrated communications platform to enhance security
L infrastructure and facilities in the Western Corridor "Oil Enclave". Project Developer is the National Security Council. Project implementation is under a performance-based design-build-maintain contract (Estimated Amount of US$150 million). (b) Accra Metropolitan 1CT- enhanced Traffic Management Project - This includes an additional financing to enable accelerated completion of "stranded" road construction works on key congested road arteries for the metropolis, especially (i) Nsawam Road (Achimota-Ofankor segment); (ii) Dodowa Road (Tetteh Quarshie-Haatso Junction) and (iii) La Beach Road. Project Developer is the Urban Roads Department, with project implementation under a build-operate-transfer contract (Estimated Amount ofUS$ 150-200 million). (c) Small and Medium Enterprises (SMEs) Projects Incubation Facility - Through collaboration between CDB's Special Facility for African SMEs and NTHC Ltd. blueprint has been developed to pilot a US$100 million facility to support local capability building of Ghana SMEs involved in public- private partnerships for infrastructure development QEstirnatedAmountofUS$l0O million). Benefits to be derived from the projects to be implemented under the facility include added value, within a relatively short period, to the nation's gas resources by harnessing and developing the resources to its fullest potential for the benefit of the country while avoiding the potentially damaging re-injection of gas into the Jubilee Wells beyond the beneficial phase. The Facility would also help to accelerate the implementation of projects envisaged under the Ghana Shared Growth and Development Agenda (GSGDA). Concurrent implementation of tranches As to whether Tranche A projects would be completed before the commencement of Tranche B, the Committee was informed that the two tranches would be implemented concurrently to ensure the desired timely impact. Members bemoaned the history of non- disbursement of approved loans on time due to project implementation difficulties and urged the Ministry of Finance and Economic Planning to put in place a feedback mechanism to periodically brief Parliament on the status of implementation of the Facility. Repayment Deputy Minister for Finance and Economic Planning, Hon Seth Terkpeh informed the Committee that the Facility would be re aid from petroleum revenue Annual Budget Funding Amount(ABFA) and Government's own other resources. Pursuant to the repayment of the Facility, a commercial contract for the off take of oil would be entered into by the national oil company (GNPC) and the Chinese authorities. As to whether the oil off-taker company would be separate and apart from the EPC contractors, the Committee was informed that the off-cake agreement would be at the Master Facility level and would include just a few companies that are separate and apart from the EPC contractors.
Impact on public debt Hon Terkpeh informed the Committee that Government would seek to reduce the impact of commercial projects on the public debt through an on-lending and escrow arrangement for most of the projects under the Facility. This is expected to ensure that beneficiary institutions either repay the loan or contribute to create a revolving infrastructure fund while Government repays the loan directly from the Consolidated Fund. Counter part funding The Committee observed that the Government of Ghana's (GOG's) 15 per cent Counterpart Funding will be paid from an "Owner Contribution Account" to be established as a sub-account under a main "Collection Account" to be established at the Bank of Ghana into which GoG will deposit funds towards the repayment of the Facility. It was further observed that Government intends to repay the Facility from the ABFA in accordance with the Petroleum Revenue Management Act, 2011. Chinese content and local content Under Clause 3 of the Master Facility Agreement, a minimum of 60 per cent of each of Tranche A and Tranche B facility is required to be paid to People's Republic of China (PRC) Contractors. It was explained to the Committee that this clause allows about 40 per cent of the facility to be applied towards local content sourcing or sources other than the People's Republic of China. Gas infrastructure project Ghana discovered oil in 2007 with associated gas. According to a Deputy Minister for Energy, Hon Emmanuel Armah-Kofi Buah, the gas was flared until April, 2011 when an arrangement was made to re-inject the gas. He revealed to the Committee that the country has an 18- month period to ensure that facilities are put in place to receive the gas. Hon Buah further informed the Committee that subsequent to the earlier oil discoveries, further discoveries have been made in commercial quantities of gas (non-associated) in the Jubilee Field. To him, the successful utilisation of the gas resources would help in cutting down the cost of powering the various thermal plants. Activities to be undertaken under the Gas Infrastructure Project include the construction of an offshore gas gathering pipeline, early phase gas treatment plant, onshore gas trunk pipeline (Bonyere- Essiama-Takoradi-Prestea), NGLS processing retrofit of TOR and helicopter fleet for gas infrastructure surveillance. The first phase of the gas infrastructure project is expected to cost between US$850 million and US$l .1 billion, out of which the Master Facility is providing US$850 million. Additionally, the Takoradi Petroleum Terminal Project, to be sited at Pumpuni would be constructed to increase the capacity of the Bulk Oil Storage and Transportation Company (BOST) to serve the Western Corridor and to improve on the national strategic stocks. The Committee noted the need for Government to take the lead in implementing the first phase of the gas project so that the private sector could be brought on board in the second and subsequent phases. This would enable the Government to be in firm control of the gas subsector and to dictate the pace of industrialisation using gas.
Western railway line The Western railway line begins from Takoradi - through Nsuta, Tarkwa, Dunkwa, and Bekwai -to Kumasi with a branch from Dunkwa to Awaso where bauxite is mined. It has a total length of 340 Kilometres. The railway line is used to transport passengers and bulk cargo. The major cargo that used to be transported on the Western Railway line when the line was operational includes timber, bauxite, manganese, cocoa et cetera. The Committee was informed that part of the Facility (about US$500 million) would be used to rehabilitate the railway line and the rolling stock. The Transportation Minister, Hon Alhaji Collins Dauda indicated to the Committee that the railway line would be rehabilitated in its existing narrow gauge (of 3 feet 6 inches) but with an improved speed from 56 kilometres per hour to 80 kilometres per hour and a possibility for future expansion to a standard gauge (of 4 feet 8 A inches).Again, the wooden sleepers of the line would be replaced with concrete sleepers to ensure durability. Some Hon Members sought to know whether the railway line would be rehabilitated in its single-track state or would be dualised. Responding, the officials from the Ghana Railway DevelopmentAuthority (GRDA) confirmed that in the_short-term, the line would be rehabilitated as a single-track but with improved signal and communication system. Again, members were concerned that even though the financial estimates of the project amounted to US$478 million, an amount of US$500 million has been allocated for the purpose. It was, however, clarified that the difference would be applied towards project contingencies after the actual figure is determined in the EPC Agreement. In addition to the very important social purpose that the railway line would serve, it was noted that the project has a projected internal rate of return of 13 per cent. Some members remained sceptical about the ability of the GRDA to negotiate acceptable commercial rates with their bulk customers since, to them, the Authority has never been able to do so historically. Takoradi port Activities to be undertaken at the Takoradi Port with funds from the Facility include the extension of the existing breakwaters, limited dredging from 7.5 metres to 12 metres and reclamation of some land from the sea. Also, a new Jetty would be constructed at a new location for bulk cargo vessels to anchor and discharge their cargo. The Committee was assured that the port retrofitting work would be done in such a manner that it does not interfere with the normal operations of the port. Some Hon Members of the Committee inquired to know the status of the Boankra Inland Port and why it was not included in the projects to be funded under the Facility. To this, the Deputy Minister for Transport, Hon Peace DzifaAku Attivor stated that the Inland Port Project is being implemented by the Ghana Shippers Authority but has not become operational because there is no functioning railway line to convey goods from the sea ports to the inland port. She revealed that a proposal for the rehabilitation of the Eastern Railway Line is currently being considered by Government to help facilitate the implementation of the Boankra Inland Port.
being negotiated with the World Bank group to enable critical projects such as the Sofoline project, Asankragua road, and Nsawam-Apedwa by pass to be taken off government budget. The Committee was further informed that the US$l .8 billion loan from CBRD is no more being pursued due to technical challenges. Therefore, some of the road projects that were slated under that facility have been included for construction under this CDB Master Facility. Food and agriculture projects Food and Agriculture projects to be undertaken under the Facility include the Accra Plains Irrigation Project, construction of landing sites and coastal fishing harbours. The Deputy Minister for Food and Agriculture, Hon Nii Amasa Namoale informed the Committee that the amount of US$100 million earmarked for theAccra Plains Irrigation Project would be used to irrigate 11,000 hectares instead of the earlier stated 5,000 hectares due to change in technology from "pumping" to "gravity". The project which is being undertaken under a build-operate-transfer arrangement would have a lifespan of 30 years but would be transferred to government after 15 years. Thus, upon the transfer, the project would still have 15 years to run. Some members wondered why the Asutsuare Sugar Factory has not been included in -the projects to be funded from the Facility. To this, Hon Namoale informed the Committee that the factory has been transferred to the Ministry of Food and Agriculture (MOFA) and that the field of 1,800 hectares is now under rice cultivation. Another Food and Agriculture project to be undertaken under the Facility is the redevelopment of coastal landing sites and fishing harbours at Axim, Dixcove, Elmina, Winneba, Mumford, Senya Bereku, James Town, Teshie, Gomoa Fetteh, Ada, Keta and Moree. As to what happened to the coastal landing site projects that were commenced by the previous Administration, the Committee was informed that these are the same projects that have been listed for funding under the Facility since hitherto funds have not been available to execute the projects. The Committee recommended the inclusion ofAbuesi in the Shama District and Ekumfi Otuam in the Mfantsiman Municipality in the landing sites redevelopment project- Sekondi free zone project Under the Master Facility, on-site and off-site infrastructure are to be provided to implement the Sekondi Free Zone project. The Sekondi Free Zone is meant to be an industrial minerals processing estate, including an alumina refinery. Off-site infrastructure to be provided include main road, drainage, water supply systems, waste water disposal, supply and installation of electrical power transformers, telecommunication facilities and railway logistics terminal. On-site infrastructure includes main road, site drainage, water supply system, waste disposal system, supply and installation of electrical power and transformers, fencing and security systems. The Committee noted that currently there is one free zone project which is fully developed and operational; thus, the Tema Export Processing Zone. The Sekondi free zone is to be developed to host petrochemical and alumina refinery
industries which would mostly export their products. In all, the zone would cover about 2,512 acres of land. It was observed that even though the Sekondi Free Zone_ was gazetted about eleven years ago, it has yet to be developed due to financial constraints. Compensation payment for the land is also yet to be made. Members advised the Ministry of Trade and Industry (MOTI) and the Free Zones Board (FZB) to hold continual dialogue with the chiefs and people of the project-affected area to ensure smooth implementation of the project. Members of the Committee who are familiar with the project revealed that some of the lands earmarked for the project have been encroached upon by developers. They also sought to know whether there are plans to relocate communities in the project area. The Minister for Trade and Industry, Hon Hannah Tetteh confirmed to the Committee that indeed, some of the lands meant for the project have been encroached upon and that the encroachment has affected an estimated 200 acres. She explained that discussions between her Ministry and-the Chiefs of the project area resulted in a decision to resurvey the project land with the view to taking out the parts that have already been developed by the people. She was confident that in the minimum, 2,000 acres would be available for the implementation of the project. The Minister also confirmed that there are plans to relocate the communities within the project area but added that they would be resettled not too far from the project area to ensure minimal disruption to their livelihoods. As to whether the Shama Free Zone project has been abandoned, the Trade and Industry Minister explained that that project is still under consideration by Government for future development. The Committee recommended that the development of the Sekondi Free Zone project should take on-board lessons learnt from the Tema Zone in order to develop appropriate drainage, water supply and electricity systems to avert problems such as occasional flooding and power outages. SME projects incubation facility A special facility of US$100 million from the Chinese Government under the management of CDB has been included in the MFA to support Small and Medium Enterprises (SlVIEs) in Ghana. The facility would be underwritten by the Government of Ghana and on-lent to the National Trust Holding Company (NTHC) for on-ward lending to SMEs either directly or through intermediary financial institutions such as the Micro-finance and Small Loans Centre (MASLOC). Some members of the Committee bemoaned the poor rate of recovery of loans granted by Government to businesses and individuals and wondered whether this facility would also not suffer the same fate. Deputy Minister for Finance and Economic Planning, Hon Seth Terkpeh, however, assured the Committee that Government will explore the use of the guarantee method (collateral, insurance, and other guarantees) to ensure recovery of the funds. Members advocated a serious and effective co-ordination of the various fragmented credit facilities available for lending to SMEs to ensure the desired impact and to avoid duplication of resources.
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. Tax gross-up 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.
Hon Members of the Committee were of the opinion that the projects earmarked for funding under the Facility are critical to the nation's development, especially the gas infrastructure development. The Majority therefore opined that approval must be given to enable the various Subsidiary Agreements to be negotiated and presented to the House for approval. Again, they suggested that since the terms of the agreement were not in question, approval should be given in accordance with article 181 of the 1992 Constitution. The dissenting minority, however, argued that since the definition of "Facility Agreement" includes Subsidiary Agreements, approval of the Facility Agreement would necessarily imply the approval of the Subsidiary Agreements which are not yet known. They were also of the opinion that the approval of the MFA is inextricably linked with the approval of the other requests and therefore it would be improper to approve the MFA without seeing the relevant Subsidiary Agreements. They suggested that the CDB should be given only a "Letter of Comfort", otherwise the Agreement should rather be treated as a Memorandum of Understanding (MOU) and be approved to give Government the green light to negotiate the Subsidiary Agreements and bring them back for approval in that context so that it does not constitute a binding contract. 6.0 Conclusion Upon critical examination of the Master Facility Agreement, the Committee, by majority decision, finds that the Facility would contribute to provide a comprehensive and accelerated infrastructural development across the country. The Committee therefore, by majority decision, recommends to the House to adopt this Report and approve by resolution for signing by Government, the Master Facility Agreement (MFA) for a three billion United States Dollar (US$3,000,000,000.00) Term Loan Facility between the Government of the Republic of Ghana and the China Development Bank (CDB) to finance agreed infrastructure development projects under the Ghana Shared Growth and Development Agenda (GSGDA) in accordance with article 181 of the 1992 Constitution and sections 3 and 7 of the Loans Act, 1970 (Act 335). Respectfully submitted. 3 .30 pm.
Mr Speaker, I beg to second the Motion. This is without prejudice to my right to speak in accordance with Order 86 (4) (c) of our Standing orders. Question proposed.
Hon Members, the deb ate will start tomorrow; I direct the Clerk's Office to make sure that every Member of this House has copies of the new Master Agreement and the Committee's Report to allow for a smooth debate tomorrow. The debate will only take place upon satisfaction that all Hon Members have got copies of the relevant documents. Hon Members, on that note, the House is adjourned till tomorrow morning at 10 o'clock. Thank you very much.