The Economic and Organized Crime Office (EOCO), has confirmed that the docket on investigations into an alleged $36 million procurement fraud of electric meters has been forwarded to the Attorney General.
According to the facts of the case, L&R investment and Trading Company was contracted by the government of Ghana in 2016 to provide the meters at a cost of $39.9 million for a period of 26 weeks.
Though the government of Ghana paid $36 million of the contract sum, most of the meters purchased were found to be faulty.
Citi News Sources at EOCO indicate that ECG has been advised to use some of the meters, which are in good condition.
Background
L & R Investment and Trading Company incorporated in China, in 2016 entered into a contract with government to supply the meters to the Electricity Company of Ghana (ECG). The then Ministry of Power, now Ministry of Energy, through the Ministry of Finance made a payment of US$36 million to L & R Investment and Trading Company Limited.
The total contract value was US$39,999,566.44 and was to be executed within a period of 26 weeks. When the contract was signed, an advanced payment of US$12 million was paid to L & R Investments plus a Letter of Credit (LC) of US$24 million, according to investigations by the Institute for Energy Policies and Research (INSTEPR).
The INSTEPR investigations, based on findings of the latest Auditor-General report, cited that although some meters were shipped into the country, they were rejected for not meeting the ECG’s specifications and the supplier not meeting some of the contract terms, including technical classification, due diligence, pilot studies, Factory Acceptance Tests (FAT) and training of ECG metering staff.
INSTEPR said ECG informed L & R Investment that it could not accept the containers because they have not followed the process agreed to as per their contract, but the containers of meters were subsequently cleared from the Tema Port to stop the accrual of demurrage.
After failing to meet product specifications and contract terms, INSTEPR said the contract was terminated in 2017 after legal consultations on the non-performance by L & R Investment, but the company still went ahead to discount the US$$24 million Letter of Credit given it under the contract, in addition to the US$12 million advance payment, taking the total payment to US$36 million.
When INSTEPR contacted the officials of ECG to ascertain further and better particulars on this transaction, it was informed that all documents relating to this transaction is with EOCO and national security.
Further checks also revealed that EOCO and national security have been investigating the transaction since 2017.
