Service Ghana Auto Group Limited (SGAGL) has categorically denied claims of inflating the costs in its contract with the Government of Ghana for the after-sales services and maintenance for 307 ambulances.
The company, in a press statement signed by its Managing Director, noted that the companies in the transaction have at all material times, including during the competitive procurement processes, conducted themselves with integrity and complied with due process of law.
The statement is in response to claims by the National Democratic Congress (NDC) Member of Parliament for North Tongu, Samuel Okudzeto Ablakwa, who alleged financial under dealings in the procurement and maintenance of the ambulances.
The MP had accused the government and SGAGL of engaging in a rip-off deal, claiming that former Minister for Finance, Ken Ofori-Atta had hastily approved a payment of US$34.9 million for the procurement of spare parts for the ambulances.
He claimed that approximately US$113,000 per ambulance, was significantly higher than the cost of acquiring new ambulances, adding that US$10 million had already been disbursed to SGAGL.
But the Ministry of Health (MoH) late last month described as untrue, suggestions that some $34.9 million has been paid to Service Ghana Auto Group Limited in relation to the servicing of ambulances.
The Bank of Ghana (BoG) has also clarified that no payment had been made on the Letter of Credit (LC) established for US$10 million, as the necessary demand for payment had not been made.
SGAGL Position
SGAGL, in its statements, has denied the claims made by the NDC MP, describing them as false and “outright lies,” and warned that it would hold all those persons and entities involved in spreading the falsehood to account.
It said SGAGL is an SPV of a consortium of seven companies that participated in a competitive procurement process, not sole sourced, and adjudged on merit to procure, and to provide After-Sales Service and Maintenance for 307 Mercedes Benz Sprinter Ambulances for the National Ambulance Service (NAS).
According to the statement, the competitive procurement process commenced by the Ministry of Special Development Initiatives via an Invitation for Tenders dated November 15, 2018 for 275 units of 4×4 Ambulance Vehicles, which was later varied to 4×2 for 307 vehicles.
It pointed out that a total of 16 companies participated inclusive of the seven companies that eventually formed the consortium during the pre-tender workshop round.
These six companies are made up of Luxury World Auto Group Limited, Elok Consult, RDC Company Limited, Beft Engineering Works Limited, Prestige Era Company Limited, Bluemix Company Limited, and Quality Supply and Builders Company Limited.
“These companies came together, leveraging their expertise and resources, and emerged with exceptional value-for-money proposition in their compelling lowest bid of $133,000 per ambulance, compared to offers by competitors including Silver Star Auto Limited, ranging from $250,000 to $300,000 as revealed by the Tender Evaluation Report,” the statement reads.
It continued that the consortium’s Turkey-based supplier, EMS Mobil Sistemler AS AG, by letter dated February 22, 2019, obtained manufacturer’s authorisation from Mercedes Benz, an essential prerequisite for participation in the process.
The statement further pointed out that manufacturer’s authorisation for the medical equipment to be installed in the ambulance vehicles was also duly obtained from the EMSA Ambulances by letter dated February 23, 2019, another critical tender requirement.
It said the authorisation provides a warranty guarantee for the medical equipment and ambulances.
“In full compliance with tender specifications, a comprehensive on-site inspection of the suppliers’ facilities was undertaken with technical officers of the NAS, Ghana Health Service, Ministry of Health and two other relevant sector ministries in Turkey and Amsterdam at the expense of the consortium,” the statement pointed out.
Additionally, the statement indicated that the individual companies in the consortium had specific allocations and duly supplied the ambulances, paying all applicable duties and insurance costs in full for seamless delivery of same.
Spare Parts Contract
The statement pointed out that the After-Sales Service and Maintenance Agreement was entered into in December 2019, and specified extensive after-sales support, routine servicing, maintenance, repairs, and provision of requisite mechanical and medical spare parts for the ambulances.
“The consortium companies incorporated the SPV (i.e. Service Ghana Auto Group Limited) on April 24, 2020 with primary objects for sale of automotive and vehicle parts to fulfill the contract’s stipulations. Herein lies the utterly false claim that SGAGL was awarded a contract prior to its incorporation, when the verifiable fact is rather that the initial contract of December 2019 was to the constituent companies of the consortium.”
According to the statement, the incorporation of the SPV would naturally result in an agreement reflecting the new development, with SGAGL forming a strategic partnership with Inter-City STC Coaches to access its workshop facilities for a country-wide coverage.
It said SGAGL deployed three fully equipped Mercedes emergency mobile workshop vans for prompt and efficient response to unforeseen issues, ensuring minimal downtime and optimal availability of these ambulances for critical medical transport services.
“SGAGL undertook comprehensive renovation of the Ministry of Agriculture’s workshop in Kumasi, and repurposed it as a specialised workshop for the maintenance, servicing, and repair of the ambulances for optimal operational readiness of the emergency medical vehicles.
It continued that “SGAGL has also constructed a purpose-built workshop at the National Ambulance Service’s headquarters in Accra, further expanding its support infrastructure for the ambulance maintenance programme. Other projects in Ho and Takoradi have stalled due to land litigation”
The statement said the contract specifies a budget for spare parts for a period of five years contingent upon the approvals of both the Bank of Ghana and the Public Procurement Authority, and SGAGL has a dedicated warehouse facility in Tema for secure storage and management of imported parts for use by the NAS.
“The $34.9 million of which Letters of Credit (LC) was established for $10m is falsely assigned to cover only mechanical parts, and the figure again deceitfully allotted at about $113,000 worth of spare parts per ambulance,” the statement said.
It clarified that “in fact, over 45,000 mechanical and medical spare parts (essential items) have been supplied to the NAS since the ambulances were delivered and payment for some consignments have been in arrears, and a recent shipment, financed with loans by SGAGL is on its way to Ghana.
“In respect of the 2022 Performance Audit, SGAGL had significant disagreements with the Auditor-General’s Report which it did not have the chance to contribute any responses by way of the Management Letter.
“Nonetheless, SGAGL has since refunded the amounts wrongly labelled as double payments to salaried staff of NAS, when these were in the nature of ADHA for hardworking personnel. SGAGL deploys its teams in a fashion consistent with the plan to train and transfer knowledge to staff of NAS servicing fleet separate from the 307.”
The statement said it needs emphasising that the Ministry of Finance established a $10 million LC, not direct payment as falsely alleged, and that bank loans have had to be procured to finance key obligations under the contract.
The statement pointed out that except that Stephen Okoro is a director of one of the seven companies, a fact available to public at the Registrar of Companies, the consortium, its constituent companies or the SGAGL do not have the associations falsely alleged, neither have they engaged in any wrongdoing.
“The Consortium and SGAGL have and will continue to act above board in their dealings,” the statement added.
BY Gibril Abdul Razak