Jospong group hit with another scandal

An Accra- based radio station, Joy FM has revealed in its latest investigation that the National Democratic Congress government’s contract signed with Jospong group of companies to supply waste bins to households across the country is fraudulent.

According to the Accra-based radio station, the contract sought under the previous administration to procure one million waste bins and disposable bin liners has been inflated by at least 130 million Ghana Cedis.

In November 2016, the Ministry of Local Government and Rural Development awarded a contract to five companies to supply one million waste bins and 900,000 bin liners at a cost of $74, 040,000 (GHc318million).

The cost of the one million waste bins is $60 million while the cost of the bin liners is $14, 040,000. These amounts do not include Value Added Tax. The contract was awarded through sole sourcing, with approval from the Public Procurement Authority (PPA).

The then minister of Local Government and Rural Development, Collins Dauda, wrote a letter to the Public Procurement Authority citing urgency as the justification for using sole sourcing for the procurement.

He said the bins were urgently needed because it was approaching the rainy season and there was the possibility of a cholera outbreak.

This letter of approval from the PPA is dated October 27, 2016, when the nation typically is expected to be experiencing the dry season. Nevertheless, the PPA approved the sole-sourcing method and the contract was awarded to the five companies:

1. Universal Plastic Products and Recycling Company Limited

2. Yeeco Plastics Ghana Limited

3. JSA Logistics Limited

4. Able Plastic Recycling Limited

5. Meridian Waste Management Services Limited

Investigations are now showing that all the five companies contracted to supply the waste bins to the households are subsidiaries of the Jospong group of companies owned by Joseph Siaw Agyepong, the owner of Zoomlion.

However, the contract is raising eyebrows following the revelations by Joy FM. The President of the Ghana Institute of Procurement and Supply, Collins Sarpong, is questioning why sole sourcing was used as the procurement method at the time.

He wondered "Once you have identified more people within the market, why use sole-sourcing?”

At the 10th anniversary celebration of Zoomlion last year where former President Mahama was present, Joseph Siaw Agyapong said "We were the first company to distribute free waste bins to households in Ghana. Currently, we have distributed 200,000. Our vision is to distribute one million free waste bins to all households in the year 2017”

However, this declaration, according to the investigations is untrue.

The multimedia group subsidiary claims “the cost of a 240-litre waste bin as advertised by the leading producers of waste bins in Ghana, which are also suppliers of waste bins to the Local Government Ministry is GHc135.

A pro forma invoice Joy FM secured from the Universal Plastic Product and Recycling Ltd, a subsidiary of the Jospong Group, quoted the cost of a bin of this size as GHc150. An earlier contract awarded by the Local Government Ministry for the supply of waste bins and sighted by the same radio station charged GHc15 to transport each waste bin.

Even if the cost of transportation for each waste bin for the Jospong Group is increased from GHc15 to GHc20 (33.3% increment) the cost per waste bin should be GHc170. However, the contract with the Jospong Group quotes $60 per waste bin or GHc258 with the exchange rate of $1 to GHc4.3 at the time the contract was signed.

This is about GHc88 million higher than the actual estimated cost. This could be as high as GHS103m (GHc15 million more) if compared with the prices advertised by other waste bin suppliers used by the ministry previously.

Also, a packet of disposable bin liners from Universal Plastic Product and Recycling Ltd costs GHc15.8 or $3.6. This means the 900,000 bin liners will cost $3.3 million. But the contract quotes $14,040,000, a difference of about $10.7 or GHc46.1 million. Together with the waste bins, this contract appears to have been inflated by over GHc134 million or $31.1 million.”