Bulk Oil and Transportation Company (BOST) has dismissed allegations by the minority National Democratic Congress (NDC) that a new head office being built by the company cost $78 million.
Speaking to journalists in Parliament yesterday, MP for Yapei-Kusawgu Constituency and Ranking Member, Mines and Energy Committee, John Jinapor alleged that a single unit tower that can be constructed at US$ 39 million has been inflated and approved by the Public Procurement Authority (PPA) at US$78 million.
However, BOST in a swift response, questioned the arithmetic by Mr. Jinapor, describing his calculation on the cost of the project as erroneous.
Management in a statement explained that BOST entered a contract to construct a twin-tower head office building in 2015 and paid a commitment fee of $8 million in 2016 for the work to begin.
It said the project was to cost a total of $39 million (VAT Exclusive).
However, Procurement process was not followed through by the management of the company at the time.
BOST said allegations of inflated cost resulted in the project being halted in 2017 and a value for money (VFM) audit was carried after halting of the project.
At the same time, forensic audit by EOCO also confirmed that there was no malfeasance in the process.
The statement said the current management of BOST in correcting the procurement anomaly applied to the Public Procurement Authority (PPA) for a ratification of the contract and to vary the terms to procure one of the two-tower building since the current cashflow position of the company would not permit the purchase of the twin-tower.
“The $39 million submitted to the PPA for approval is the original contract sum as signed in 2015 in contravention of the procurement law.
“To request for a variation of the terms, the normal procedure required that the original contract gets approved before the variation”, the statement noted.
It indicated that in the year 2020, an independent valuer appointed by both parties valued the project at $49.6 million.
“The Board and Management of BOST decided to purchase one block out of the two. The contractor valued the single block to be procured at $23.5 million (VAT Exclusive).
“A no objection was secured from the Ministry of Finance and Economic Planning to proceed with sourcing funds to carry through the procurement of the single block.
“The ratification of the initial contract was secured on the 19th May, 2022.
“BOST is currently occupying a rented premises and in our view, securing the single block at the $23.5 million will help to do away with the burden of rising cost of rent in the current premises.
“The blocks are not the same in terms of the facilities they harbour. The one BOST is acquiring is customized to accommodate the staff of the company based on the corporate structure which existed at the time of the contract. The other block was intended to be rented out to raise further income for BOST.
“The two blocks per the valuer’s report in 2020 cost $49.6 million and the simplistic arithmetic of multiplying the original contract cost submitted to the PPA for ratification by 2 to claim the blocks cost $78 million is simply erroneous.
“These are the facts as pertaining to the BOST Head Office building which started in 2016 and is yet to be occupied by the company”, the statement concluded.
