Kanawu Radio number 1 news portal
Business News of Monday, 27 November 2023
Special Prosecutor, Attorney General and Asante Bediatuo and others in an image collage
The Attorney General and Minister of Justice have torpedoed the infamous Torentco Asset Management Limited (TAML) attempt to lease the state-owned Tema Oil Refinery (TOR), saying his office is not in a position to vouch for its credibility.
Godfred Yeboah Dame’s action follows the submission of a Due Diligence Report (DDR) for a reassessment of Torentco’s credibility by the General Transport, Petroleum, and Chemical Workers Union of the Trades Union Congress (TUC) of Ghana.
Last week, the Union expressed delight that the Office of the Special Prosecutor (OSP) had directed the management of TOR to suspend its proposed partnership agreement with Tema Energy and Processing Limited (TEPL).
Insists that the lease agreement between TOR and Torentco Asset Management Limited was shady and believes the OSP will unravel a lot if the deal is probed.
This comes months after the Africa Center for Energy Policy (ACEP) and IMANI Ghana raised concerns about the lease agreement negotiations between Torentco and TOR.
In June this year, The Herald’s insiders mentioned that the Energy Minister, Dr. Matthew Opoku Prempeh, and a cousin of President Nana Akufo-Addo, Nana Bediatuo Asante, who doubles as his Executive Secretary, have for some time now been haggling over TOR, a state facility.
Torentco is alleged to be the baby of Nana Bediatuo and is about to take away the state facility almost for free to a company that hadn’t sold even a one-litre bottle of kerosene before.
On Monday, November 20, the workers’ union petitioned the Special Prosecutor to investigate the lease agreement between TOR and TAML.
Godfred Dame, in a response to the Union, stated that “From the DDR, TAML has no financial and technical capacity to undertake the proposed transaction.”
“TAML has no established affiliation with Vitol or with any other company, which has the needed funds and technical capacity to undertake the Proposed Lease Transaction and without whose support TAML lacks the financial and technical capacity to undertake its obligation under the Proposed Lease Transaction,” it stated.
The Ministry further indicated that TAML lacked the requisite licenses and documentation to undertake the proposed lease transaction, and proceeding with the project would therefore be contrary to the law.
It therefore urged the General Transport, Petroleum, and Chemical Workers Union of the TUC Ghana to “revert to us should you require any further clarification on the matter.”
In the petition, the Workers Union said, “We wish to request that your highly esteemed office investigate and intervene in the ongoing lease arrangement of Tema Oil Refinery to Torentco Asset Management Limited, now Tema Energy and Processing Limited, with the same individuals involved.”
The Transport Workers Union believes “the actions of the individuals behind Tema Energy and Processing Limited seek to induce workers of TOR with 20% of its shares through misrepresentation of workers in an entity by the name ‘TOR Workers Charity Trust’ that never existed nor heard of at TOR, apart from the five individual directors and direct beneficiaries of this trust.”
Speaking in an interview on Citi FM on Thursday, the National Chairman of the Workers Union stressed “How do you work in a company like TOR and go and form a company to take shares in the company? This is clearly corruption and a conflict of interest. You can’t do that. It is morally unacceptable. The evidence is clear. They have gone to register a company to come and take over companies that they work with.”
He added, “We believe that when the OSP goes in, he will unravel a lot of things because everything is shrouded in secrecy.”
ACEP revealed that Torentco, a newly established local Ghanaian company formed in January 2023, lacks a track record in the petroleum business and does not have the capacity to effectively take over TOR.
IMANI had also claimed TOR has asked Ghana’s Public Procurement Authority (PPA) to approve a deal to lease its main production assets to a company called Torentco Asset Management, which will take over TOR’s core refining business for six years.
“Torentco is allowed to refine up to 8 million barrels of oil a year by paying $1 million every year as annual rent. There is also an “additional rent” amount of $1.067 million per month,” said IMANI.
Boakye Kwabena Boakye of the ACEP yesterday told Accra-based Citi FM in an interview that “this is a new local Ghanaian company formed here in Ghana in January 2023, with no track record. If they fail to deliver, how do you hold them accountable? They don’t have any track record of dealing in petroleum businesses.”
Mr. Boakye also emphasized the importance of a transparent and competitive bidding process to ensure that the best option is chosen, rather than solely relying on the assumption that TOR is not profitable.#
“In the last year alone, I have seen many companies interested in taking over the asset [TOR]. So open it up, be transparent about it, ask everybody who is interested and say I want $1 million, or I don’t want money, who wants it, and what will you give me in return? And then you have bids that you can compare and choose the best out. The public will be interested in how you do it, and agree with the process or disagree with it.”
“You just select someone because you think TOR is not making money and just give the company out in a manner that they are doing, I think raises a lot of red flags and even raises concerns about whether the barest minimum being promised can be delivered. We don’t trace them to any serious company that we can be comfortable with and say we know this reputable company is behind it and for anything at all you can call or shame them.
However, the Senior Staff Union of TOR countered these concerns, stating that Torentco is the only viable option available to revive the refinery, as successive governments have been hesitant to invest capital in its operations.
Under the lease agreement, Torentco Asset Management Group will pay $22 million to lease the Tema Oil Refinery for a period of six years. The company is expected to refine up to 8 million barrels annually.
IMANI had mentioned that “there is also an “additional rent” amount of $1.067 million per month.
It argued that “if Torentco refines more than 8 million barrels, it pays $0.5 for each extra barrel.
“So, if Torentco stretches the refinery to its full limit and refines 16.5 million barrels, it pays $17.2 million in annual rent.
“Torentco will invest $22 million in capital expenditure to revamp the refinery. On top of that, it will assume responsibility for clearing provident fund arrears up to the tune of $2.5 million.
“Torentco will furthermore pay $800,000 into a reserve fund plus $0.4 to cover maintenance expenses for every barrel refined while assuming responsibility for insurance and utility payments.
“At maximum production limit, Torentco’s maintenance commitments will cost about $7.4 million, and insurance expenses will hit about $6 million per annum.
Watch the latest edition of BizTech below:
Source: theheraldghana.com
