{"id":310285,"date":"2017-04-12T18:15:01","date_gmt":"2017-04-12T18:15:01","guid":{"rendered":"http:\/\/citifmonline.com\/?p=310285"},"modified":"2017-04-12T18:15:01","modified_gmt":"2017-04-12T18:15:01","slug":"the-ameri-swindle-the-full-monty-article","status":"publish","type":"post","link":"https:\/\/citifmonline.com\/2017\/04\/the-ameri-swindle-the-full-monty-article\/","title":{"rendered":"The AMERI swindle: The full monty [Article]"},"content":{"rendered":"
Friends, do not take the silence of AMERI\u2019s supporters on this platform and in the open media to mean aloofness or nonchalance.<\/p>\n
They have been hard at work, especially on WhatsApp and in private briefings, doing all they can to discredit IMANI\u2019s campaign to persuade the public to view the deal as the \u201cgreatest swindle of the Ghanaian state in at least two decades\u201d.<\/p>\n
Since our responses have been fragmented across different posts, discussion threads, and ripostes across multiple platforms, we have been advised to assemble them all in one place in order to vindicate our campaign. We now have the pleasure and duty to proceed to do so.<\/p>\n
Let us take just the main arguments that are being canvassed by pro-AMERI activists.<\/p>\n
They have said that IMANI\u2019s analysis of the financial terms of the deal is shallow because it assumes that such a deal can only be assessed in one way, when in fact different methods can show that it is a very fair deal.<\/p>\n
IMANI is underestimating the cost of installing the turbines and exaggerating the profits made by the middle-men (brokers) because it does not understand IRR, NPV, and Discount Rate analysis, they insist. How do we plead to this charge?<\/p>\n
Firstly, no one, at least, disputes the cost of the TM2500+ mobile aeroderivative gas turbines that were bought (in actual fact, the TM2500+ is the composite \u2018power plant in the box\u2019; the turbine itself in that box is the LM2500 aeroderivative engine). And that is because no one can. Right there in Annex A to the agreement, its supplier and specifications are fully provided.<\/p>\n
The machine was acquired from APR, a recommended supplier of GE, by the brokers. APR openly lists the price of these machines.<\/p>\n
There is thus no dispute that the machines together cost $220 Million, and most likely less if bought in bulk. As to why Ghana had to go to AMERI for AMERI to go to METKA for METKA to go to APR in order to acquire GE equipment, let\u2019s leave that aside for now.<\/p>\n
Anybody with the most basic training knows that if something costs $22 million each and you want to acquire ten of them you would normally be entitled to a discount.<\/p>\n
You can prove the point by walking to Kingdom Stationery and ordering 10 workstations at a go. I assure you a 15% discount off the catalogue price would be yours, but let\u2019s even assume that the original procurers were obtuse enough to pay $220 million.<\/p>\n
(Indeed in the World Energy Outlook database, per MW capital cost for gas turbine power is $500,000, so the $900,000 implied by the catalog price is precisely what you expect to see at catalogue price level, but let\u2019s not over-flog the point.)<\/p>\n
The $220 million is the engineering cost. Everyone knows that even if a machine, such as this one, has been designed as turnkey (literally, buy today, turn the key, and voila it starts working) one still need specialists to install, test and then commission it.<\/p>\n
One also needs to plug it into whatever network is supposed to receive the output the machine generates. Also if somebody buys something on your behalf they deserve to be paid what in Ghana is called T&T.<\/p>\n