Ghana can renegotiate US$235m Teshie desalination settlement – Expert

Management Consultant and Procurement Specialist Kobina Ata Bedu says Ghana can still negotiate a settlement with the operators of the Teshie-Nungua Desalination Plant despite the US$235 million arbitration award against the state.

Speaking on Channel One TV’s The Point of View on Wednesday, September 23, Mr Bedu said the arbitration outcome does not prevent the two parties from reaching a fresh agreement on the settlement and future of the project.

“When the two parties come to an agreement, it is the two parties who can amend the agreement. So the two parties can ignore the settlement and then agree on a way forward and move on,” he said.

Mr Bedu argued that the operators could have an incentive to negotiate because they stand to earn significant amounts if the existing arrangement continues for the remaining period of the agreement.

He said Ghana could therefore explore a settlement that reduces the amount it ultimately pays while preserving the possibility of taking control of the infrastructure.

“Even if they have to pay a settlement, even the amount, they don’t have to pay the full $235 million. The guys can agree that pay us $100,000 as long as you can salvage your relationship, because there’s more money to be paid,” he said.

Mr Bedu further proposed that government assess the current condition of the plant and determine the cost of restoring it to production before deciding on the next step.

He said if the assessment shows that operating the facility is economically viable, government could consider negotiating to acquire the plant and operate it itself.

“If we compare that to the settlement, we can pay them off and then own the assets and then run it ourselves,” he said.

He stressed that any decision should be based on the plant’s technical condition, the cost of restoring it and projected production costs to determine whether continued operation would provide value for money.

The comments follow an International Chamber of Commerce arbitration award ordering Ghana to pay about US$235 million over the termination of the Water Purchase Agreement for the plant.