The erstwhile Mahama administration under whose tenure the Komenda Sugar Factory was revamped, put it up for sale just two months after it was inaugurated, Minister of Trade and Industries, Mr Alan Kyerematen has said.
“They [Mahama government] commissioned the factory in May. In two months, they were already selling the factory”, Mr Kyerematen told journalists on Tuesday, 7 May 2019 when he took his turn at the Meet The Press series.
“They had recruited”, he went on, “a transaction advisor to offload 70 per cent of their interest and the evidence is clear”, adding that: “Those who were even bidding two months after that, go and look at the figures they were quoting to buy a new factory”.
“Consequently”, Mr Kyerematen note, “all the work that has been done and the people who have expressed interest in Komenda [sugar factory] said that that factory cannot cost $35 million”.
“And right from that, we’ve issued a request for a forensic audit, so, people have to come and explain”, he said, explaining: “You’ve collected money, people have to answer. $35 million dollars, [yet] everybody who comes is saying that this thing cannot cost $35 million, so, the valuation they do now, how do we account for that? And remember this is not about the government doing the valuation. Because of the reports that were coming out, I said: ‘No, you cannot have the situation where everybody is saying this thing cannot cost $35 million, so, PricewaterhouseCoopers, do another independent valuation’; the valuation was $12 million and it is consistent with the work that my deputy and the independent technical team also did, it was around almost the same figure, so, the matter will come up for further discussion”.
In mid-April this year, former President John Mahama described as “unacceptable” plans by the Akufo-Addo government to sell off the factory to a private interest, and also denied claims that he, as president, planned disposing off the factory.
“It is unacceptable to sell the factory; this is an investment the government made”, Mr Mahama said, adding: “We can get the expertise and technology to make this factory work”.
Mr Mahama argued: “Sugar is one of the products we import a lot – almost $200 million every year – so, if we produce part of that sugar here, then it reduces the foreign exchange we have to take outside to import sugar”.
“I will urge the government to follow the path that we took”, he said while addressing the people of Komenda during a tour of the Central Region at the weekend.
Mr Mahama’s concerns at the time tied in with that of the Member of Parliament for Komenda Edina Eguafo Abirem Constituency, Mr Samuel Atta Mills, who, on Friday, 12 April 2019, expressed anger over what he said was the devaluation of the $35-million factory to $12 million by the government of Ghana.
The factory, built at a cost of $35 million from an Indian Exim Bank facility, was revamped and inaugurated by the erstwhile Mahama administration in 2016 and closed down in June of the same year and has since remained dormant. It has a capacity to crush 1,250 tonnes of sugarcane per day.
The Akufo-Addo government has cited a number of reasons for the factory’s dormancy, including an improper implementation plan and insufficient raw materials to feed the plant, among others.
The brother of late President John Evans Atta Mills wondered how, within a year, the value of the factory could plummet by $23 million as plans are afoot to hand it over to a strategic investor by close of April 2019.
In Mr Mills’ view, the Auditor-General and the Special Prosecutor’s office must investigate the matter.
“We cannot sit down for these things to happen. If somebody was to steal two goats and a chicken, we all know how many years this person will get [in jail], but I am basing my conclusion on this: that if it is true that it has been valued at $12 million, we need to be very worried in this country,” he said.
“Why should it always be on acquiring wealth in illegal ways?” he questioned.
In November 2017, the government began moves to revive the factory.
Mr Kyerematen at the time told Parliament that a $24.5-million Indian Exim Bank credit facility was to be secured to develop and implement a plantation and out-grower scheme in a bid to provide raw materials for the factory.
It was to see to the cultivation of some 14,100 acres of sugar cane to feed the plant but that never happened, prompting Mr Kyerematen’s return to parliament to announce the plans of the government to hand over the factory to a new strategic investor by the end of April.
Mr Kyerematen on 4 April 2019 told parliament that the dormancy of the factory was due to technical and financial challenges.
Answering questions tabled by Mr Atta Mills, Mr Kyerematen indicated that upon the assumption of office by the Akufo-Addo government, a technical audit was conducted on the facility, which revealed, among other things that the soil condition was not favourable to produce quality sugarcane, adding that the government is taking steps to engage a new investor and expects that a decision will be taken by April this year.
Additionally, he noted that: “A test-run was never completed before the factory was commissioned due to unavailability of sufficient sugarcane”.
According to him, the factory, upon inauguration by the previous government, “was not in a position to produce the required refined white sugar due to the absence” of some processing component units “which were not fully installed during the test-run”.
He said: “About 35 items had not been installed on commissioning, although they are critical for the production of sulphur-less white sugar”.
Furthermore, he noted that the land size available for cultivation of sugarcane is far less than the 6,000 acres required to supply sugarcane to run the factory at full capacity.
He highlighted that: “There has been no out-grower scheme for small-scale farm holders to support a nucleus plantation for the factory”.
It will be recalled that the previous National Democratic Congress (NDC) government contracted a loan of some GHS 35 million for the revamp of the factory.
But the minister indicated that a decision has been taken not to trigger the loan until all the challenges were resolved. The minister, however, did not provide figures concerning the cost to the nation for the delay in activation of the loan.
The Minority in parliament have not been happy about the move to sell the factory and accused the government of deliberately undervaluing it in order for it to be sold off cheaply.
Denying claims that his administration also had intentions of selling the factory, Mr Mahama during his tour, said: “There was never any plan; I can say emphatically as the former president under whom that factory was built that there was never any plan to sell off the factory”.
“There is still about 3,000 acres of land available for planting sugarcane for the factory.
“The loan from the Indian EXIM is still available, so, all the government needed to do was to take that money and implement the second phase of the project, and once they had done that, this factory will be running,” he added.
