Dormaa East MP refutes allegations of malfeasance at BOST

The Member of Parliament for Dormaa East , Paul Apraku Twum Barimah, has refuted claims of malfeasance levelled against the management of the Bulk Oil Storage and Transportation company limited (BOST ) by the ranking member of the mines and Energy Committee, John Jinapor. According to Paul Twum Barimah, who is a member of the Mines and Ernergy Committee the statements put out by the member of parliament for Yapei Kusawgu , John Jinapor , that the current management at BOST had inflated the cost or price of the twin tower head office building being constructed were false.

He explained that some procurement anomalies were discovered in the initial contract signed under the erstwhile NDC administration when the NPP government assumed office. He said the procurement process was not followed through by the then management of the company under the NDC government , an act that led to a value for money audit and subsequently a forensic audit being conducted by the Economic and Organised Crime organisation, EOCO.

Responding further to the allegations , Paul Twum Barimah noted that the US$39 million submitted to the Public procurement Authority PPA for approval is the original contract sum as signed in 2015 in contravention of the procurement law . He noted further that “To request for a variation of the terms, the normal procedure required that the original contract gets approved before the variation.In the year 2020, an independent valuer appointed by stakeholders valued the project at $49.6 million. The Board and Management of BOST decided to purchase one block out of the two.

The contractor valued the single block to be procured at $23.5 million (VAT Exclusive).”
“A no objection was secured from the Ministry of Finance and Economic Planning to proceed with sourcing funds to carry through the procurement of the single block.The ratification of the initial contract was secured on the 19th May, 2022.BOST is currently occupying a rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of rising cost of rent in the current premises.”

“The blocks are not the same in terms of the facilities they harbor. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented out to raise further income for BOST. The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous. These are the facts as pertaining to the BOST Head Office building which started in 2016 and is yet to be occupied by the company. “ its either John Jinapor got his information wrong or is trying to be mischievous , he should go and do his research well .

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RESPONSE TO ALLEGATIONS MADE BY THE RANKING MEMBER OF THE MINES AND ENERGY COMMITTEE
• BOST entered a contract to construct a twin-tower head office building in 2015 and paid a commitment fee of $8 million in 2016 for the work to begin.
• The project was to cost a total of $39 million (VAT Exclusive).
• The Procurement process was not followed through by the then management of the company at the time.
• Allegations of inflated cost resulted in the project being halted in 2017.
• A value for money (VFM)audit was carried after halting of the project.
• Forensic audit by EOCO also confirmed that there was no malfeasance in the process.
• The current management of BOST in correcting the procurement anomaly applied to the Public Procurement Authority (PPA) for a ratification of the contract and to vary the terms to procure one of the two-tower building since the current cashflow position of the company would not permit the purchase of the twin-tower.
• The $39 million submitted to the PPA for approval is the original contract sum as signed in 2015 in contravention of the procurement law. To request for a variation of the terms, the normal procedure required that the original contract gets approved before the variation.
• In the year 2020, an independent valuer appointed by both parties valued the project at $49.6 million.
• The Board and Management of BOST decided to purchase one block out of the two. The contractor valued the single block to be procured at $23.5 million (VAT Exclusive).
• A no objection was secured from the Ministry of Finance and Economic Planning to proceed with sourcing funds to carry through the procurement of the single block.
• The ratification of the initial contract was secured on the 19th May, 2022.
• BOST is currently occupying a rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of rising cost of rent in the current premises.
• The blocks are not the same in terms of the facilities they harbor. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented out to raise further income for BOST.
• The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous.
These are the facts as pertaining to the BOST Head Office building which started in 2016 and is yet to be occupied by the company.

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