Cost of gas infrastructure wasn’t bloated – Ghana Gas

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Created on Monday, 22 December 2014 18:09

The Ghana National Gas Company (Ghana Gas) has rejected claims that the amount spent on the gas infrastructure project was bloated by about GH¢600 million.

The Minority spokesperson on Energy, KT Hammond in an interview on the Point Blank segment on Eyewitness News last Friday insisted that the cost of the project is “absurd.”

But according to Ghana Gas, those allegations are “without basis.”

“That project is absolutely bloated,” KT Hammond alleged, adding  that “a document…supplied by Ghana Gas suggest that they have expended as much as $1.3 billion on this project. I am talking about the group of five who are in charge. Five members of the board, there is the Chief Executive who is also a member of the board.”

But a press release signed by Alfred Ogbamey, Corporate Communications Manager of the company, stated that “the allegations are either based on Mr. Hammond’s misunderstanding or deliberate misinterpretation of the documents he claimed to be in his possession.”

“He may also be motivated by his self-confessed advocacy against Ghana Gas as exhibited in the controversy surrounding the reported takeover of Ghana Gas by GNPC.”

On the $1.3 billion expenditure, Ghana Gas said that it has not expended such amount adding that “the budgeted cost of the Ghana Gas project is $1,000,000,000.00.”

He further explained that “the agreed interest rate on this sum amounts to $300 million. So when the loan amount of $1 billion and the estimated interest of $300 million are capitalized, the asset cost will amount to $1.3 billion.”

“This does not mean the cost incurred on the project to-date is $1.3 billion, because at the end of the project, repayment of the principal loan and interest will be made on the actual amount expended. Currently, the amount disbursed on the project stands at $728 million.”

Meanwhile, processes are being put in place for the controversial takeover of Ghana Gas by the Ghana National Petroleum Corporation (GNPC) to be initiated.

In the mean time, the commissioning schedule of the gas infrastructure project by the Ghana National Gas Company (GNGC) has been interrupted.

This follows some challenges the Volta River Authority (VRA) and the FPSO Kwame Nkrumah vessel are experiencing.

The challenges follow the absence of enough functioning generating units at the VRA enclave in Aboadze and Compressor trippings on the FPSO.

By: Godwin Allotey Akweiteh/citifmonline.com/Ghana