The Herald has observed some confusion between the Ghana Airport Company Limited (GACL) on one hand, and the Jubilee House and the Ministry of Aviation led by Joseph Kofi Adda on the other hand over ongoing discussion about the privatization of Kotoka International Airport (KIA) to a Turkish company; TAV-SUMMA Consortium (TSC).
Whereas, the Jubilee House, has been captured in a document dated March 24, 2020 and signed by Nana Bediatuo Asante; Secretary to the President announce an “executive approval to facilitate the engagement of a strategic partner for Ghana Airports Company Limited to improve service delivery and expand infrastructure at the Kotoka International Airport”, the GACL management in an August 10, 2020 press statement, gave indication it is not in favour of the Turkish deal.
The GACL, described the ongoing transaction between Aviation Ministry and TAV-SUMMA Consortium with the blessings of Jubilee House, as “an unsolicited proposal has been received from a Turkish Consortium which is yet to be considered”.
Significantly, the Executive Approval from the Jubilee House which was addressed to the Aviation Minister, had stated; “I refer to your letter, dated 18th March, 2020, in respect of the above subject matter.
“The President has granted executive approval for the Ministry of Aviation to facilitate the engagement of TAV-SUMMA Consortium as strategic partner to the Ghana Airports Company Limited for the improvement of service delivery and expansion of infrastructure at the Kotoka International Airport.
I shall be grateful if you could take requisite action on paragraph two (2) above”.
The executive approval was copied the Vice President, Dr. Mahamudu Bawumia, the Chief of Staff, Frema Opare and Secretary to the Cabinet, Ambassador Mercy Yvonne Debrah-Karikari.
Strangely, the GACL’s press release in response to former President John Dramani Mahama, said that KIA is “not for sale or being privatised” as alleged by the former President.
It stated “For the records, Kotoka International Airport is NOT FOR SALE or being Privatized as stated by GACL in an earlier press release. “Rather, an unsolicited proposal has been received from a Turkish Consortium which is yet to be considered. It is rather unfortunate that certain figures from the proposal are being used to peddle untruths”.
Former President Mahama, had in a television interview with Woezor TV, argued that giving 66 percent shares of the Kotoka Airport to a private firm was wrong, adding the National Democratic Congress (NDC) was against attempts by the government to hand over 66 percent shares of the Airport to TAM-SUMMA Consortium.
According to him, such moves by the Akufo-Addo government, were wrong and must be stopped.
The former President, said while the NDC administration was in power, its valuation report showed that the airport was valued at about GH¢5 billion and so it is strange that the government intends to cede 66 percent of its control of the airport to the private company in exchange for $70 million.
“When we were in office, a valuation study of the Kotoka Airport was done and it was valued at over GH¢ 5 billion. It also had an insured value in the region of GH¢3 to GH¢4 billion because a lot of money had been invested in the airport and it had become one of the five best airports in Africa.”
“[Now we are seeing] a strange development where a Turkish company is being given the airport; to take over the airport and run it. For $70 million we are giving 66 percent of the airport to a Turkish company. We are against it. It is wrong,” John Mahama said.
But in reacting, the GACL, said the claim by the former President was not true.
It assured the “general public that Kotoka International Airport is NOT FOR SALE. The vision of making Ghana the Preferred Aviation Hub and leader in Airport Business in West Africa remains a priority.”
It said the claim by Mr. Mahama that an investment of $600 million was made at Kotoka is “incorrect.”
“The amount may be in reference to funding of projects in all airports including $130 million Runway project at Tamale Airport and $25 million new airport in Ho,” adding the claim that the GACL has been unable to service the syndicated loan facility is “untrue.” “To dare, GACL has met its repayment obligations under the loan facility.”
Interestingly, same airport has facilities in allocated to President Akufo-Addo’s daughters to operate as store.
Again, the president brother in-law, Dr. Kwame Nyantakyi Owusu is already in the Airport City Lands witha deal in which he is building a facility called Pullman Accra Airport City Hotel. The arrangement had the state partly financing the deal from the Ghana Infrastructure Investment Fund (GIIF).
The project had gotten the Ghana Cedi equivalent of Twenty-Three Million, Nine Hundred and Eighty-Three Thousand, Thirty-Three United Sates Dollars and Forty-Three Cents (US$23,983,033.43), for the importation of materials and equipment for the said hotel project as tax exemption.
Dr. Kwame Nyantakyi Owusu is an appointee of President Akufo-Addo on the governing Board of the Bank of Ghana and an in-law of the President, because they are both married to two blood sisters.
The impression one gets from the ongoing transaction, is that it’s only at the executive level; between Ministry of Aviation and Jubilee House, and the management of the Ghana Airport Company in total darkness. Significantly, cabinet is not discussing the transaction, rather its just be an executive order similar to the AMERI deal which was eventually botched.
Interestingly, there are documents in circulationsuggesting that assets of the GACL might have been undervalued to favor the engagement of TAV-SUMMA Consortium (TSC) as Strategic Partners to GACL.
Meanwhile, the structure of the transaction by theNana Addo government transaction with the Turkish Consortium include TSC will combine with GACL to form a new company, NEWCO LTD; and that TSC and GACL will respectively have 66percent and 34percent equity shareholding in NEWCO LTD respectively.
Per the proposal, once the company is formed GACL will transfer ALL the aeronautical and non-aeronautical businesses and assets of Kotoka International Airport including Airport City Projects and undeveloped KIA lands to the new entity, NEWCO LTD which will now have legal ownership and control of all of KIA business and assets.;
TSC would sign 15-year management and technical services agreement with NEWCO LTD at a fee of 2% of gross turnover upon the close of the agreement. The management and technical services agreement specifically would put the development and execution of Airport City 2 projects and all airport lands under their control;
TSC would raise a secured $300 million loan (not equity) from commercial banks and development financial institutions for NEWCO LTD to refinance the existing loans that GACL has borrowed;
TSC also proposes to make available a secured senior shareholder loan (not equity) of up to $120 million to NEWCO LTD to make up for any working capital shortfalls.
TSC proposes to invest up to $70 million of equity capital over the next 5 years after the agreement comes into effect to fund capital investments;
After 2 years and after the full repayment of the $120 million shareholder loans, GACL will be paid a royalty of 15% of the gross revenues for the use of GACL’s assets by NEWCO LTD;
The shareholders of NEWCO, the Turkish Consortium (TSC) and GACL will share the profits of NEWCO over the 15-year period based on their respective equity shareholding of 66% for TSC and 34% for.