Government releases white paper on stadiums probe report

Full text of the Government's statement on the Probe

Soccer-Zebi claim share of Bediako's transfer money

Accra (Greater Accra) 19 Aug. '99

Government on Wednesday 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 bilion 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."

The statement said the consultants did not go by the acceptable course of asking for quotations from other sources and rather resorted to what seems to be sole sourcing.

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 per cent, 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.

GRi../.

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Accra (Greater Accra) 19 Aug '99

Herewith full text of Government Statement On The Report Of The Committee Of Enquiry Into The Award Of Contracts For The Rehabilitation Of The Accra and Kumasi Sports Stadia Background

Following public outcry over alleged improprieties in the award and execution of contracts for the renovation and rehabilitation works at the Accra and Kumasi Sports Stadia, Government in February 1999 appointed a three-member committee consisting of Lt. Col Emmanuel K. Tagoe (retired) as Chairman with

Messrs Francis Assuah and Geofrey K. Avah as member and member/secretary, respectively, to enquire into the awards of contracts. The committee's terms of reference were:

(i) to determine whether or not there were any irregularities in the awards of contracts for the renovation works at the Accra and Kumasi Stadia;

(ii) to examine the mode of any purchases made in connection with such works;

(iii) to determine whether or not there was any conflict of interest on the part of any persons connected with such works; and

(iv) to enquire into any other matters which the committee considers relevant to any of the aforementioned terms of reference.

4. In 1997, a vote of 2 billion cedis was provided for the 5. rehabilitation of the Accra and Kumasi Sports Stadia.

6. Subsequently, the Ministry of Youth and Sports, acting though AESL, as consultants, requested the Greater Accra Regional Tender Board to put the project on tender, adopting the Selective Tender method, in view of time constraint.

Government's Comments Observations and decision on the Findings and Recommendations

Government has studied the report of the committee and now wishes to make known is comments and observations on the finding and recommendations made by the committee:

(I) To determine whether or not there were any irregularities in the award of contracts for the renovation works at the Accra and Kumasi Stadia.

The Original Contract

(a) Government accepts the committees finding that the contract for the renovation works in the north wing extension of the Accra Sports Stadium (referred to as PHASE 1 of the project) for a total sum of 1,766,443,340.00 cedis was properly awarded to Arab Contractors (Ghana) Limited by the Regional Tender Board at its meeting held on 5th November, 1997.

(b) The contract was signed for Arab Contractors (Ghana) Limited by Mr Yehya M.F. Nigrim, the General Manager of the company, and witnessed for the company by Mr S.N. Brew Butler as director on 11th December, 1997. The Minister for Youth and Sports, Honourable E.T. Mensah, signed for the Ministry whilst Mr D.D. Obiri, the Chief Director witnessed it.

(c) The original contract sum was, however, increased by 403,247,774.41 cedis in the course of its execution through a variation of the original drawings by the consultants "in order to make the north wing extension stronger and more stable".

 The "Additional Works" Contract

 (a) Government has taken note of the committee's finding that the "additional works" covering the rehabilitation of existing facilities and construction of other facilities were recommended with the aim of bringing the Stadia to the standard that would meet not only the requirements of CAF but also FIFA's.

(b) Government registers its disapproval over lapses associated with the award of the contract for the "additional works" to Arab Contractors (Ghana) Limited

(c) While government accepts that in view of the time constraints and also the fact that Arab Contractors were already mobilised on site, the sole sourcing nature of the project was understandable, there appears to be no justification for lumping together all the so-called "additional works" under a separate contract and awarding it to Arab Contractors on the recommendation of the consultants.

(d) An examination of the "additional works" covered by this contract shows that it comprised the following works:

 A. Jobs Undertaken by Arab Contractors Rehabilitation works at Accra Stadium 3,462,600,275.00

Rehabilitation works at Kumasi Stadium 2,261,644,113.00

 Total 5,724,244,388.00

 B. Jobs Undertaken by Nominated Sub-Contractors Provision of Plastic Chairs for both Stadia 1,731,840,000.00

Installation of P.A. System for both Stadia 697,125,000.00

Installation of Electronic Scoreboard for Accra stadium 1,925,000,000.00

Total 4,353,465,000.00

GRAND TOTAL 10,078,209,388.00

(e) Since the original contract awarded to Arab Contractors covered constructional and rehabilitation works at the Accra Sport stadium, it is the view of Government that the rehabilitation component of the additional work at both Accra and Kumasi constituted a reasonable addition to the PHASE 1 contract which Arab Contractors had executed to the satisfaction of the clients and consultants.

(f) However, such works as provision of plastic chairs, installation of P.A. systems and the installation of Electronic Scoreboard, for which Arab Contractors had no proven expertise, should not have been lumped together in the contract.

(g) 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.

(h) This is confirmed by the committee's finding that even though these facilities were covered by the contract for additional works awarded to Arab Contractors, as a matter of fact the contracts to F. Malawi for the supply of

P.A. systems for the Accra and Kumasi Stadia were rather awarded by the Ministry of Youth and sports on the recommendation of the consultants, while the contract for the installation of the Electronic Scoreboard for the Accra sports stadium and the provision of plastic chairs for both Stadia were awarded by the Central Tender Board.

(I) If there was enough time for the Central Tender Board to consider and award these contracts, there was then no justification for including these items in the contract for additional works awarded to Arab Contractors supposedly on the grounds of time constraint.

(j) In view of the committee's findings, government directs that the profit margin (or overhead cost) put on all such sub-contracts by the main contractors, Arab Contractors, should be refunded to the government.

(a) The Kumasi Scoreboard

In the opinion of the committee, the Kumasi sports stadium Scoreboard is inferior, it has a limited range of operations and does not befit the international status of the stadium. The committee accordingly recommends that the Kumasi sports stadium scoreboard be rejected and every effort made to install a scoreboard befitting the international status of the stadium which will serve as a venue for CAN 2000.

(b) Government has noted the above findings and recommendations by the committee against the background of the reasons for the award of the contract to Rytech (Ghana) Limited by the Central Tender Board.

(c) These were:

(i) Its bid was cheaper than the other two offers;

(ii) It employed the world's leading expert on Athletic Tracks and

Scoreboard, and was known to have requisite technical expertise to execute the project;

(iii) Its payment terms of 50% down payment and 50% final payment to be settled 60 days after commissioning of the project were found to be most competitive; and

(iv) the two-year manufactures' warranty it offered was considered adequate and would enable any defects which would appear to be detected and remedied.

(d) Furthermore, the committee's findings and recommendations run counter to the professional opinion of the consultants as stated below:

"The system which is highly computerised and is Microsoft Windows 98 based has displays in three colour (Yellow, Green and Red) and allows for creation of various formats for commercial advertising. The software has provision for video capture clips, animation's, audio facilities etc.

The inspection undertaken revealed that installations were carried out in accordance with specifications. It was also found out that the malfunction of the scoreboard earlier reported was due to a faulty underground cable which has since been replaced.

Considering the size of the Kumasi sports stadium, it is recommended that the size of the scoreboard be increased possibly to the size of that of the Accra sports stadium."

(e) In the light of the above, government directs that Messrs Rytech (Gh) Ltd should replace the scoreboard with one of the Accra sports stadium size, either within the terms of the 2-year warranty period of barring that, at a cost to be negotiated with the Ministry of Youth and Sports.

The Accra Scoreboard

 (a) As a result of delay in making an advance payment of 70% of the cost of the Accra sports stadium Scoreboard, an extra cost of Sfr.40,800.00 (ie 70,032,792.00 cedis) was incurred in shipping the scoreboard by airfreight instead of by sea freight as originally arranged. This amount, according to the committee, would have been saved if the agreed arrangement for effecting payment had been complied with.

(b) Government supports any endeavour aimed at infusing discipline into public spending with a view to eliminating waste. Government is however aware that in view of competing claims on scarce resources, payments such as this, through urgent, could, for good reasons, be deferred to a late date. It is noted, however, that as at now only 8,938,499,371.40 cedis out of the total contract sum of 15563,295,712.20 cedis has been settled.

(c) Government accepts the recommendation of the committee that steps be taken to pay the sub-contractors who have not yet been paid, and directs the Ministry of Finance to settle all outstanding bills with the contractor and the sub-contractors as soon as practicable.

The Micro Wave Control Unit

 (a) The Micro Wave Control Unit purchased for 284,180.39 pounds (equivalent to 1,103,583,284.72 cedis) and used for live TV telecast of the Under-20 tournament at the Kumasi Sport Stadium was dismantled after the tournament and has since been sent to the Ghana Broadcasting Corporation for safe-keeping, awaiting the purchase of an appropriate vehicle for the equipment to be installed on it to enable it perform as an OB van. The committee recommends that the van must be purchased as a matter of urgency for the equipment to be installed on it for future use at the Kumasi sports stadium.

(b) Government accepts this recommendation and accordingly directs the Ministry of Communications to take the necessary steps in that direction.

ii Purchase of Furniture, Carpets, Curtains etc (a) Government accepts the committee's finding that the purchases and procurement of such items as furniture, carpets, curtains, tables, chairs, etc were not part of the contract for additional works awarded to Arab Contractors.

These items the committee found were supplied by local suppliers on the instruction of the Ministry of Youth and Sports and the consultants and Arab Contractors "in order to bring the stadium up to CAF and FIFA standards".

(b) Note is also taken of the fact that the procurement of these items done without the approval of either the regional or central tender board only helped to swell the cost of additional works from 10,078,209,388.00 to cedis 13,796,854,372.20 cedis.

(c) Government finds as disturbing and disappointing the committee's finding that this was one area that both the consultants and the contractors failed to observer the principle of cutting down on cost. Prices were given and the consultants approved of them without recourse to negotiations. And in most cases the prices quoted and approved were not only high but also questionable. The consultant did not go by the acceptable course of asking for quotations from other sources and rather resorted to what seems to be sole sourcing. It is also observed that no proper contracts were entered into with the suppliers. In some cases, awards were given by word of mouth. A typical example was the contract given to Emelia Standard Works in Kumasi to supply curtains, flowers and flower pots. The supplier charged 10% workmanship which amounted to 2,421,300.00 cedis and added a profit margin of 2 1/2% (665,867.00 cedis) and this was approved by the consultant."

(d) Even though the procurement of these items was outside the contract for additional works awarded to Arab Contractors, which fact was well known to the consultants, Arab Contractors made a profit margin of between 5%-15% on all such sub-contracts. and yet 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".

(e) Government directs that all such contracts which were irregularly awarded should be reviewed. Excess payments found to have been made should be refunded.

Furthermore any profit margins or overhead costs put on such supplies by Arab Contractors should also be refunded to government.

iii To determine whether or not there were any conflict of interest on the part of any person connected with such works.

The committee in its report dealt extensively with the issue of whether or not Messrs Nana Brew Butler and Ade Coker or any other persons were guilty of conflict of interest in so far as the awards of these contracts were concerned.

(a) Nana Brew Butler

In the case of Nana Butler, the committee finds that at the time the PHASE 1 contract was awarded to Arab Contractors and signed on 11th December, 1997 he was not a member of the Local Organising Committee which incidentally, came into existence on the 21st of January, 1998. There could, therefore not have been any conflict of interest at the time. When the contract for the PHASE 1 project was signed with the Ministry of Youth and Sports on 11th December, 1997, Mr S.N.

Brew Butler witnessed for his company in his capacity as director of the company. This act therefore helped to serve notice that he was a director of Arab Contractors. Any one subsequently dealing with Nana Butler therefore was a least constructively aware of his position as director of Arab Contractors.

(b) However, government is of the view that once he was appointed on to the LOC, Nana Brew Butler should have expressly declared his interest in Arab Contractors particularly when it came to awarding the contract for the additional works. This was especially important since the Ministry of Youth and Sports which awarded the contract for the original works was not the body that awarded the contract for the additional works.

(c) It is true that the additional works contract was awarded by the Central Tender Board and not the LOC. But given the very keen interest that the LOC had in the award, Nana Brew Butler as a member of the LOC should have declared his interest in Arab Contractors to the other members of the LOC who in turn should have passed on the information to the Central Tender Board. Constructive knowledge does not mear actual knowledge. Thus any person who did not actually read the original contract document and seen Nana Brew Butler's signature as director - witness would not have known that he was associated with the company.

(d) Nevertheless, there is no evidence to suggest that Nana Brew Butler influenced the decision of the Central Tender Board in any way. Government accordingly accepts the finding of the committee.

Ade Coker

(a) In the case of Ade Coker, the committee finds that his company Rekoc Investment Ghana Limited withdrew its bid for the supply of chairs. His company therefore did not take part in the tendering process. It was after the Central

Tender Board had awarded the contract to Compo Praha that Mr Ade Coker entered into an agreement with Compo Praha as its local representative under an agreement dated 10th October, 1998. A copy of this agreement was forwarded to the Ministry of Youth and Sports by Compo Praha. The committee therefore finds no evidence that Mr Ade Coker's company was awarded a contract or that he influenced the decision of the Central Tender Board.

(b) Government disagrees with this finding of the committee. Government is of the view that it would have been more appropriate for Compo Praha to have appointed another company as its local representative and that Rekoc Ltd should not have accepted to perform in that capacity. Having withdrawn from the tender, presumably to avoid any apparent conflict of interest, it was improper for Rekoc Investments Ghana Ltd to have accepted to function as the local representative of the winning company in respect of the same contract. The clear impression is that Rekoc was hiding behind Compo Praha to benefit from the contract.

(c) Though there may not have been a technical breach of the law, government views the conduct of Mr Ade Coker in the Compo Praha contract arrangement as morally unacceptable.

Conflict of Interest: The General Principles

(a) Government is aware of the well established rule that where there exists a conflict of interest, there must not only be full disclosure of the material facts but that the person involved should not participate in any decision making in connection with any matters relating thereto. In the case of Ade Coker, he actually resorted to a shenanigan in order to benefit from a contract whose bid he had withdrawn from. Government condemns this conduct in no uncertain terms and restates its position that under no circumstances should the existence of conflict of interest be condoned.

(b) In the light of these observations, government directs the Attorney-General's Department to initiate immediate action to amend the Sports Decree of 1976, SMCD 54, and L.I. 1088 to compel persons serving on all sport committees, both amateur and professional, to disclose their business interests.

The existing law which restricts such disclosure to members of professional Sports Associations only creates a loophole which is easily exploited, especially since almost all the members of all the sports associations are businessmen who depend on their businesses for a living.

(c) In the specific case of the plastic chairs supplied by Compo Praha, government notes that among other things the chairs were required under the contract to have holes in them to enable the self-drainage of rainwater and to have anti-corrosive metal risers with riser heights ranging 400mm - 430mm from concrete level. Government directs that Ministry of Youth and Sports to examine the chairs to determine whether they meet these specifications. where this is not the case, appropriate steps must be taken to remedy the situation or the appropriate relief or reliefs sought under the terms of the contract.

(d) Government notes that Nana Brew Butler now has no official relationship with the Ministry of Youth and Sports or any national sports association. Mr Ade Coker is however the Vice Chairman of the Ghana Football Association. government directs the Ministry of Youth and Sports to review its relationship with Mr Ade Coker in the light of his conduct in the Compo Praha transaction.

10 Other Recommendations

Finally, government accepts the following recommendations of the committee and decides as follows:

(a) Preparations for international competitions must of necessity begin early enough. Local Organising Committees for future international football competitions must be appointed by the GFA Management Board and must be put in place long before any major international football activity.

(b) To ensure financial sanity, accountability and probity, the accounts of the Local Organising Committee should be audited as soon as possible.

(c) The cracks that have developed at the Accra and Kumasi sports stadia should be packaged as a separate contract for award as soon as practicable if it is determined that they are not covered by the two-year warranty period.

(d) The Estate Department of the National Sports Council should take an inventory of all items supplied at both stadia complex and keep proper record on them.

(e) The terms and conditions under the Defect Liability period of the contract agreement should be enforced after the commissioning of the stadia so that any damages or any defects that may occur later are repaired. In particular, it should be examined whether those provisions cannot be used to have the cracks referred to in paragraph (c) above repaired.

11. Conclusion

(a) Government notes that the committee's recommendation that the Kumasi stadium public address systems be installed has been overtaken by events; the installation having been completed and the system successfully tested on 23rd July 1999.

(b) Government wishes to thank the committee for the work done and especially for the expedition and seriousness with which it (c) tackled its assignment.

GNA

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Accra, Aug 18, GNA- The Edwin Bediako's transfer saga took a different

turn at the Gbadegbe Commission of Inquiry's sitting on Wednesday as a third

party, Mr Boye Sowah demanded 20 per cent share of the player's transfer money

from Alhaji Ousman Sulemana, Chairman of Afienya United.

In a letter to the Commission, Mr Sowah, Chairman of Zebi F/C, claimed

to have transferred Edwin Bediako, now playing for Borussia V. F. L. 1900 in

Germany, to Afienya United with the agreement that Zebi would be entitled to 20

per cent share of any future transfer.

He alleged that Alhaji Sulenama said he did not receive the transfer fee

of 80,000 Deutsche Marks but his (Sowah) investigations at the Ghana Football

Association (GFA) secretariat revealed that Afienya had paid GFA's 10 per cent

share for the release of Bediako's international transfer certificate.

Alhaji Sulemana had alleged on Monday before the Commission that national

Chief Coach, Emmanuel Kwasi Afranie last year acted as agent of a German Club

and attempted to present Bediako, as a floating player so as to evade what was

due to the Ghanaian club.

But before Mr Sowah could be allowed to testify, the Chairman of the

Commission, Justice Sule Gbadegbe told Mr Sowah that it would be unfair to grant

him audience without the presence of Alhaji Sulemana and Coach Afranie.

The Chairman, therefore, summoned the three parties, Mr Sowah, Alhaji

Sulemana and Coach Afranie to appear before the Commission on Tuesday, August

26.

Earlier, Mr Seth Yeboah, Chairman of Dawu Youngsters told the Commission

that some foreign clubs are taking advantage of the FIFA 60-day clause to

register some Ghanaian players without the consent of the local clubs.

The clause states that after 60 days if the local football association

failed to issue an international transfer certificate to the player, the foreign

club concerned could go ahead and issue a provisional one to the player.

He said two of his players, Laud Oscar, now in Germany and Chronicle

Kwame Amadu in France, are victims of this clause.

Mr Yeboah said Amadu left for France about three months ago for trails with

a first division club but has only heard of him once.

He called on the GFA to assist the clubs to help correct this anomaly with

the foreign clubs.

Mr Yeboah said some of the "senior" premier clubs are found of cheating

the smaller ones on the player transfer issue. He cited Accra Hearts of Oak and

Kumasi Asante Kotoko as being the culprits.

He said in the case of Eugene Addo, who was transferred from Dawu to

Hearts and now playing for a German second division club, not a dime out of the

50,000 dollars due Dawu has been paid by Hearts.

Mr Yeboah said Kotoko is to pay a total of 58,000 dollars for the transfer

of Prince Amoako and Said Mohammed both once played for Dawu.

Amoako was transferred for 250,000 dollars and Said for 35,000 dollars.

He said the Dawu-Kotoko issue is now before the law court.

Asked how many players Dawu have transferred since the club was formed,

he said six and named them as Emmanuel Tetteh, Felix Aboagye, Laud Oscar, Alex

Nyarko Karimu Alhassan and Ousmanu Hossein.

Mr Yeboah later presented documents to substantiate his claim.

Mr John Fredrick Mensah, a represented of Cape Coast Ebusua Dwarfs could

not produce all the documents covering eight players the club has transferred

since 1993.

The players are Augustine Mensah, Foster Batios, Richard Ackon, Michael

Coffie, Abedi Tuga, Michael Asare, Willie Brown and Moro Issa.

He is to re-appear tomorrow, August 19 with the documents.

Sitting continues.

GRi../