No Wrong Deals In DRIP – DACF

The District Assemblies Common Fund (DACF) has put out verifiable facts and figures to prove that recent allegations that the cost of equipment procured for the District Road Improvement Programme (DRIP) project was inflated by over $102 million were untruths.

The allegations were put out by the Member of Parliament for North Tongu Constituency, Samuel Okudzeto Ablakwa who said they were uncovered after a parliamentary probe.

Below is the full statement put out by DACF:

DACF EXPOSES OKUDZETO MACHINATIONS ON DISTRICT ROAD IMPROVEMENT PROGRAMME (DRIP)

1. The DRIP programme was entirely the idea of Dr. Bawumia. He proposed the idea and was implemented by the following stakeholders.

 The stakeholders for the implementation of the DRIP Programme are: 

• The District Assemblies Common Fund (DACF) – Funding Source
• The Office of the President – Procurement Entity
• The Parliament of Ghana – Approving Authority of the DACF Formula
• The Metropolitan, Municipal, District Assemblies (MMDAs) – Beneficiary of the DRIP Programme
• The Regional Coordinating Councils (RCCs), Ministry of Local Government, Decentralization and Rural Development (MLGDRD)

2. The supplier of the DRIP equipment was J. A. Plant Pool who was awarded the contract.

3. Quotations were sought from local companies dealing in similar equipment such as Zonda Tec Ghana Limited. Consequently J. A. Plant Pool quotation was competitive with favourable terms. Zonda Tec Ghana Limited and others were asking for cash purchase transaction at a retail level. Whilst J. A. Plant was dealing directly with the manufacturer, Liugong, Shacman, etc.

4. The total cost of the equipment and other specified ancillary services is $178.7million of which 15% advance mobilization representing about $26.805million was paid. In addition, a 3-month moratorium was given after mobilization and the balance amount to be paid in 9 equal monthly instalments after delivery in Government Bills.

A two (2) year Letter of Credit (LC) was established by the supplier and his bankers to allow for enough time to make payment of any consideration at no additional cost.

5. DRIP equipment was tailored made for the programme with high superior specifications and standard comparable to European standard. It is therefore not the same as any quotation for equipment that has been advertised on any website,

6. The DACF never said in their response to the Minority Caucus nor to Hon. Samuel Okudzeto Ablakwa that it did not have funds to pay for the DRIP equipment. Indeed, the DACF has ring-fenced about Ghs3billion out of its outstanding arrears over the years to cater for the DRIP expenditures. This was presented in Parliament for approval and was approved.

7. It will interest you to know that in 2014, under the NDC Government, similar equipment was procured which broke down within 2 years. DRIP machines were categorised with their respective prices indicated in the contract unlike the NDC era where 60 machines without details were bought for Euro 27.7million.

 The equipment purchased under DRIP was 2,420 machines at USD178.7 representing about Ghs2.8billion at an exchange rate of Ghs15.668 compared to the NDC equipment purchased in 2014 totalling Euros 27.795million for 60 construction equipment and machinery. Converting Euros 27.795million to Dollar in 2014 was about $36.797million at an average rate of $1.3284. At the current average rate of $1.05 in 2024, the dollar equivalent is $29.085million at current exchange rate of $17.1 amounting to Ghs497.353million.

 All things being equal, the unit cost per equipment under the NDC administration was USD 484,750 representing about Ghs8,289,225 at the current exchange rate of Ghs17.1 (copy of the contract for the purchase of construction machinery and equipment is attached for ease of reference).

8. It is disingenuous to take a quotation from Liugong website to compare prices with a customised equipment that have been specifically tailored for our needs. The manufacturer has provided comprehensive after Sale Service facilities with about thirty (32) Mechanical Technicians from China to support the equipment maintenance for 2 years at no additional cost to the DRIP programme.

Additionally, 2 years warranty/guaranteed period after sales at no additional cost as part of the package, free (Telematic) Tracker Monitors on each equipment for monitoring and control of the equipment movements and free training of 70 Ghanaian Operators/Technicians in China as a back up technical know-how for sustainability and continuity of the DRIP Programme and technology transfer.

Furthermore, the equipment were assembled locally to create jobs for the Ghanaians and technology transfer, fully equipped maintenance support garages with spare parts in every region to support the DRIP Programme