Re-Claims that Komenda Suger Factory was completed under the NDC are false – Trade Ministry PRO
My attention has been drawn to a statement made by the PRO of the Ministry of Trade and Industries with a caption;
“Claims that Komenda Sugar Factory was completed under the NDC are false – Trade Ministry PRO.” In the said publication, Mr. Prince Boakye Boateng, the P.R.O of the Ministry of Trade and Industry when giving an update on President Akufo-Addo’s visit to the factory over the weekend made the following misleading statements in an interview with an Accra-based Top 103.1 Fm; “the previous government started and brought the factory to a certain stage, but the truth is that the factory was not operational. Some parts were not even installed. That was the extent to which the work on the factory had reached, but it was not operational. But now, by the grace of God, the parts that were yet to be installed have been installed,” he stated while giving an update on President Akufo-Addo’s visit to the factory over the weekend.”
I would like to use this medium to set the records straight as I provide the following:
It must be clearly put on record that, the John Mahama led NDC Government contracted US$35 million from the Exim Bank of India as a first trench of the credit facility to construct a brand-new state-of-the-art sugar processing factory at Komenda in the Central Region of Ghana. The contract, the scope of work, including Engineering, Procurement and Construction (EPC) of the plant was supervised by the National Federation of Cooperative Sugar Factories Limited of India as the project consultants. The contractor was Seftech India Private Limited based in Mumbai, India. The selection of an Indian Project Consultant and an Indian Project Contactor was part of the loan conditions signed between the Government of Ghana and the Government of India. The consultant and the contractor of the factory handed over a complete factory with all the contract specifications as stipulated in the contract documents.
If anyone tells the people of Ghana that certain components were not installed, we must simply ask the following question;
i) why would a responsible government allow the contractor to go without asking for the installation of those supposed significant components?
ii) has the Government of Ghana reported to the Indian Government about the supposed poor works executed by Seftech India Private Limited?
iii) why has the Government of Ghana failed to let the contractor comply with the contract’s arrangements?
iv) will the Government of Ghana repay the loan since the contractor and consultant failed to provide some components as peddled?
v) were the contractor and consultant fully paid for their services?
vi) has the Minister of Trade and Industry ever contacted his predecessor and those who superintended over the construction to answer why those significant components were not installed?
It is only an irresponsible and useless government that would not compel the consultant and the contractor install the additional components if the government is honest to Ghanaians.
The only addition to the factory is the provision of silos for the purposes of refining the raw sugar they intend to import to feed the factory. This to put it mildly is a slap on the face of the original plan of the factory.
As a matter of fact, the factory was never intended to refine any raw sugar from anywhere. It was established to produce the sugar from the sugarcane to the finish product. For the avoidance of doubt, this process was not only demonstrated but was witnessed by everyone during the commissioning when the test-run was done. In fact, Multimedia group sent a team to ascertain the claim that the factory could produce sugar from crushing the sugarcane, extracting the juice and processing same to get the refined sugar. The team was ably led by a journalist who showed absolute disdain towards the NDC and President Mahama’s government at the time. Captain Smart, even he himself reported that he witnessed that the factory did exactly as I stated above.
Isn’t it instructive that there was no mention of any budgetary allocations for the refurbishment of the factory in the 2021 as well as 2022 budget.
Perhaps, the uninformed PRO of the Ministry of Trade and Industry needs to be reminded that his boss the Minister for Trade and Industry is a perfect candidate for prosecution for the reckless manner in which he handled the Komenda Sugar Factory. In my humble Opinion, a clear case of Causing Financial Lost to the state.
I want to unequivocally state that, they have not changed any machine installed during our tenure of office. They have maintained the factory by sandblasting and paintings. They have also built silos that could store the imported raw sugar to be refined.
*RAW MATERIAL TO SUSTAIN PRODUCTION*
The second trench of the loan of US$24.54 million was approved by the Parliament of Ghana in November, 2016 which was to be accessed in February, 2017. It was meant to develop the raw materials to sustain the factory’s production. The factory ought to develop 40% of the needed raw materials and part of it would be used to help the outgrowers to expand their farms in order to supply 60% of the raw materials.
Before the loan of US$24.54 million was approved by the Parliament, the Ministry of Trade and Industry acting on behalf of the Government of Ghana entered into an agreement with Seftech India Private Ltd to develop 125-acre nursery plantation which ought to be transplanted onto the 10,000-acre farms by the end of the year 2017.
The NPP assumed power and the project was abandoned. The sugarcanes on nursery farm was left to over grow due to lack of political will to operationalize the factory, only for the minister in July, 2018 sold those sugarcanes to Akpeteshie distillers and the Mim Cashew and Agricultural Products Limited. Meanwhile, they are still talking about lack of enough raw materials and they now want to import raw sugar from India to be refined at Komenda. Is it lack of vision or wickedness?
*THE RATIONALE FOR THE ESTABLISHMENT OF THE KOMNEDA SUGAR FACTORY*
The vision of the John Mahama/ NDC Government was to see a nation that is self-sufficient in the production of sugar to meet both of its domestic and industrial needs and to export the commodity to other African countries.
This project was committed to producing very high-quality sugar using methods that exclude the use of sulphur, the capture of a sizeable share of the local sugar market and also to export sugar produced in Ghana to the West African market.
The objective of the project was to meet the urgent need of producing sugar indigenously by
using efficient machinery based on state-of-the-art technology, at the lowest cost of production to exploit the tremendously large market in Ghana and in other equally large markets of the West African sub-region in due course of time. In the process, jobs will be offered to a large number of Ghanaians at the production plant, and market will be provided for the produce of a large number of sugarcane farmers.
One of the key benefits of the project was an import substitute which will enable savings on foreign exchange of US$10.352m per annum. The sugar factory will also produce 4.32m units of power per annum. It will enable the neighbouring villagers to light their homes. The project will benefit approximate 20,000 local farmers.
*PROJECT JUSTIFICATION AND BENEFITS*
The project has various advantages:
Sugarcane is a robust crop and will grow in several agro-ecological zones, hence it can benefit several communities, which have no major dependable cash crops to raise their income levels and generate employment.
It will bring desirable socio-economic benefits in terms of income, job opportunities and stem the rural-urban drift of the youth.
A high-quality sugar will be a credible import substitution product which could be patronized by Pharmaceutical Industries; Confectionary Industries e.g. chocolate, toffee, drinks and beverages,bakeries, etc.; and Alcoholic industries.
• The industry will provide by-products which will be the primary materials for secondary industries in the manufacture of various types of products.
a. The paper industry
b. Organic fertilizer from the filter mud
c. Livestock feed from bagasse and cane tops; and
d. Molasses for distilling, etc.
• The project is justified in terms of the additional jobs and incomes that would be generated and possibly that production would significantly replace the large imports of sugar in Ghana, which will enable scarce hard-earned foreign exchange to be saved for more important and development-oriented projects.
• It will generate sufficient income to support research development of the nation.
• It will support Government’s efforts to reactivate the Sugar Industry in Ghana.
• The climatic conditions; rainfall, temperature and soil conditions in the area of operation are very conducive to sugar cane cultivation and hence the sugar industry can be developed easily.
• Industrialization of the rural area where the plant is sited.
• Poverty alleviation and eradication in the community of operation.
• Sustainable socio-economic development and growth of the rural people.
• Optimum utilization of available resources that are presently going to waste. • The resultant stemming of urban drift.
*PROFITABILITY AND DEBT SERVICE*
During the period of the first ten years, the project will generate equal to US$69.6m cash surplus. The project will be able to service all its debts. The debt service coverage ratio is 4.14 which is excellent.
The simple internal rate of return on capital investment is US$75.58m. It comes to 18.21% which is very good by international standards.
Well, Mr uninformed PRO, could you find out from your boss the Minister for Trade why they failed to access the $24.54 million which was approved by parliament in November 2016.
*Comrade Ibrahim Murtala Muhammed*