No contract for 86 Galloper vehicles
Information available to the New Statesman indicates that there was no contract between the National Democratic Congress administration and African Automobile Limited for the purchase of 86 Toyota Galloper vehicles at a cost of $17 million back in 1999.
The Mills-Mahama administration, led by Samuel Okudzeto Ablakwa, is currently locked in negotiations to effect the payment of $1.5 billion to Africa Automobile Limited, because of their belief that the erstwhile NPP administration under President Kufuor refused to pay for the said vehicles.
Mr Kwaku Attafuah, a former functionary of the Kufuor-administration and a special assistant to the late former Finance Minister, Kwadwo Baah Wiredu, stated categorically that there was no contract between the NDC and Africa automobile for the purchase of the 86 cross country vehicles, corroborating the statements earlier made by Mr Adjei Darko, a former Local Government Minister under President Kufuor.
Speaking on Asempa FM's Ekosi Sen, yesterday, he stated that the former Finance Minister constituted a committee to look into the said acquisition of these vehicles by the NDC administration in 1999.
According to him, the committee discovered, first and foremost, that the procurement of these vehicles was made without a contact between the two parties. The prices of the vehicles as also determined by the committee were inflated, with the cost of one vehicle priced at $197,000.
As though this was not enough, Mr Attafuah also revealed that the then NDC administration rejected 25 of the 86 vehicles procured, because they were defective and did not meet specifications. District Chief Executives, for whom these vehicles were mainly procured, according to him, registered their displeasure at the use of the vehicles.
Some of the DCE's who had the chance to use some of the “brand new” vehicles, Mr Attafuah explained, complained about the vehicles catching fire and breaking down intermittently.
Mr Attafuah disclosed that the committee drew the conclusion that the 86 vehicles were used and defective vehicles with no contract between the NDC administration and Africa Automobile binding the purchase of the 86 vehicles.
Deputy Minister of Information, Samuel Okudzeto Ablakwah, who is championing government's decision to pay the $1.5 billion debt, yesterday revealed on the same programme that government was “negotiating to beat the amount Africa Automobile is demanding down to 30% (450 million).” Samuel Okudzeto also disclosed that government has been negotiating with Africa Auttomobile for the last two years.
Analysts have stated that for an amount of $17 million to metamorphosize into $1.5 billion over an 11 year period could only mean an annual interest rate of 855% on the principal amount.
Legal luminary, Ace Ankomah, has also said that information available to him indicates that “the new GH¢1.5b 'judgment debt' is based on compound interest, following the non-payment of the original amount ($17 million).”
However, according to him, the law prohibits the use of compound interest in the making of such payments.
“In GWIRA v. STATE INSURANCE CORPORATION  1 GLR 398, the Supreme Court held that 'Compound interest must always be the subject of an express agreement.' Under CI 52, even the courts are bound to award simple interest. Any other rate of interest (including compound interest) is awarded only on the basis of existing law or an agreement between the parties,” he added.
He therefore wondered on what basis or contractual agreement that authorised the payment of compound interest to your Africa Automobile.
Also reacting to the story, Mr. Adjei Darko, who was a two-time minister at the Local Government and Rural Development Ministry between May 2003 to January 2005 and July 2007 to January 2009, said there was no document covering the so-called importation of the Galloper cross-country vehicles.
“So far as the Ministry of Local Government and Rural Development was concerned, there was no transaction between the government and any company called African Automobile whether earlier or during that period since there is no document in the ministry to confirm such,” he disclosed.
He added, “If a group (NDC government) comes and they are always eager to pay all manner of debts, it's their own cup of tea.”
Mr. Adjei Darko rhetorically asked, “When was the so-called agreement between the Ministry of Local Government and Rural Development and the car company entered? If there was any written agreement, what were the terms? What was the status of the so-called agreement before we came? And when did the company go to court for judgment because when I was leaving in 2009, I had not been served with a court case about this issue.”