Government on the stadium probe

The Government on has directed that Arab Contractors should refund the profit margin they gained from sub-contracting additional works in the rehabilitation of the Accra and Kumasi Stadiums.

In a white paper issued on the Tagoe Committee report, the government said it accepts the findings of the probe that while the original contract was properly awarded, there was no justification for lumping together "additional works" under a separate contract to the same Arab Contractors. The statement said such works as provision of plastic chairs, installation of public address systems and scoreboards, for which Arab Contractors had no proven expertise, should not have been lumped together in the contract. "The unacceptable result was that Arab Contractors found itself sub-contracting the provision of these facilities and also earning a handsome profit in the exercise for no work done."

The statement said if there was enough time for the Central Tender Board to consider and award these contracts, there was then no justification for including those items in the contract for additional works awarded to Arab Contractors supposedly on the grounds of time constraint. The government further directs that Rytech (GH) Limited should replace the Kumasi stadium scoreboard with one similar to that of the Accra Sports Stadium.

This should be done either within the two-year warranty period or at a cost to be negotiated with the Ministry of Youth and Sports. The government accepted the committee's recommendation that a van be purchased as a matter of urgency for the new microwave control unit to be mounted on it for live TV telecast. It subsequently directs the Ministry of Communications to take the necessary steps in that direction.

The government noted that procurement of materials such as furniture, carpets and curtains, which were not part of the additional works and were supplied by local suppliers on the instruction of the Ministry of Youth and Sports, was done without the approval of either the Regional or Central Tender Board. This resulted in the swelling of the cost of additional works from 10 billion cedis to 13.7 billion cedis.

It said Government finds as disturbing and disappointing the Committee's finding that this was one area that both the Consultants and the Contractors failed to observe the principle of cutting down on cost. "Prices were given and the Consultants approved them without recourse to negotiations. In most cases the prices quoted and approved were not only high but also questionable."

It is also observed that no proper contracts were entered into with the suppliers. "In some cases, awards were given by word of mouth," the statement said citing the supply of curtains, flowers and flowerpots by Emelia Standard Works in Kumasi. It said the supplier charged 10 per cent workmanship, which amounted to 2.4 million cedis, added a profit margin of two-and-a-half percent, and was approved by the Consultant.

Even though the procurement of these items was outside the contract for additional works awarded to Arab Contractors and well known to the Consultants, Arab Contractors made a profit margin of between five per cent and 15 per cent on all such sub-contracts. "This act of unjust enrichment by Arab Contractors was surprisingly condoned by the Consultants, who told the committee it was the normal practice for contractors to put profit margin because of services they provide for these suppliers." Government, therefore, directed that all such contracts should be reviewed and excess payments made refunded.

In addition, any profit margins or overhead costs put on such supplies by Arab Contractors should also be refunded to government. Government said it does not find Nana Brew Butler guilty with regards to the issue of conflict of interest since he has no official relationship with the Ministry of Youth and Sports or any National Sports Association.

It, however, directed the Ministry to review its relationship with Mr. Ade Coker, Vice Chairman of the Ghana Football Association in the light of his business interest.