Work has stalled on the Boankra inland port project
Work has slowed on the Boankra inland port project
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Ashanti Port Services, an Accra-based consortium has filed an UNCITRAL claim against the Ghana Shippers’ Council at the Ghana Arbitration Centre, seeking more than US$3.7 billion over a terminated concession to build and operate the Boankra Inland Port project (Boankra Integrated Logistics Terminal) in the Ashanti region.

Ashanti Port Services (APS) filed the request for arbitration on May 17 under a concession agreement with the Ghana Shippers’ Authority (GSA), under the supervision of the Ministry of Transport.

The consortium accuses the government of unlawfully interfering with the execution of the contract for the Boankra inland port, and insisting certain contractors were used at additional cost – before terminating the concession and taking control of the project in July last year.

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The project was expected to be completed last March

Ashanti Port Services is a special purpose vehicle created by Afum Quality Limited, a construction group in Ghana and DSS Associates of Korea, which won a tender in 2020 to build and operate the Boankra inland logistics terminal. The project aimed to link the country’s main ports in Tema and Takoradi with inner Ghana and the landlocked countries of Burkina Faso, Mali and Niger.

The consortium and the Ministry, acting through GSA, signed a 30-year concession agreement in 2020. It provided that construction would be completed within three years, after which Ashanti would operate the terminal for the remaining 27 years of the contract.

Ashanti Port, represented by GA Sarpong & Co law firm, says Ghana’s interference in the project began in 2022, when the Ghana Ports and Harbour Authority sought to acquire an interest in the consortium. Ashanti says it reluctantly agreed to sell 39% of its shares to the authority for US$49 million.

According to Ashanti Port, the “spirit” of that deal was that those funds would be reinvested in project, but that the government has since acted in “bad faith” – including by insisting that several payments be made to independent contractors.

One of those contractors is Vision Consult, which was originally the independent consultant for the project. However, Ashanti says the government later insisted that Vision be engaged to create the designs for the project – a situation Ashanti says has caused delays and further expense.

Ashanti says it also “begrudgingly” paid US$33 million of its own share value to its construction contractor for the project, Justmoh, following demands from government officials.

Ashanti alleges that both contractors incurred an additional US$36 million in costs, meaning the consortium was now unable to carry out the project based on its initial investment.

GSA purportedly terminated the concession agreement in July last year, claiming that Ashanti did not have the necessary financing for the project, and placing Boankra under state control. But Ashanti objected to that termination, insisting it had secured all necessary financing for the project.

The parties went to mediation under the concession agreement in September last year, but this proved unsuccessful. Ashanti cited several problems with that proceeding, including that the appointed mediator was Vision – which it said created an obvious conflict of interest.

Ashanti said it then attempted on several occasions to negotiate with the government to avoid a dispute that would “saddle Ghana with a judgment debt”, but those requests were ignored.

The consortium seeks a declaration in the arbitration that Ghana’s termination of the contract was unlawful – as well as a finding that the state’s “unlawful interference” in the project amounted to a material breach.

Ashanti is requesting payment of the projected income from the project over 27 years – which it says is more than US$3.7 billion. It also wants the arbitral tribunal to grant an interim injunction barring GSA from continuing work at the site.

Additionally, Ashanti is seeking a refund of the share value it sold to the contractors and a further US$16 million in special damages.

Ashanti says Justmoh has also sought to terminate their agreement, leading the consortium to file a separate claim at the Ghana Arbitration Centre to recover US$48 million in its share value it paid to the contractor.

Source: Global Arbitration Review