Multiple functions and Operational Inefficiencies

No single organisation had the power to perform all the roles of the Employer and this had implications for coordination, cooperation and decision-making. Roles were split among various organisations. The development of a policy framework for infrastructure acquisition was the responsibility of Cabinet, the sector Ministry and the National Development Planning

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Commission (see the 1992 Constitution, Article 86, PNDCL 327, s.13). Commenting on the role of the Ministry of Roads, one interviewee noted as follows:

Preparation for all projects under the purview of the Ministry starts from here. We are in charge of policy and strategic planning. Need Assessment are done at the district, municipal and metropolitan levels and these are fed into the Ministry’s programmes…Once a need is identified, the Ministry will have meetings with donors, have project appraisal documents (PAD) prepared and project objectives derived (CPR1).

Technical preparations for projects were the responsibility of the implementing agencies (see Act 540, s.3). Different pathways existed for the technical preparations depending on whether the project was internally or externally funded. The development of the initial project brief (project objectives, scope of project, Employer’s business case etc.) remained the responsibility of the implementing agencies. Where a project was externally funded, the funding organisations and consulting firms appointed by the State also played a role in the technical preparation and implementation of such projects. A copy of the Project Appraisal Document for road project ‘AkDA’ prepared by a consultant appointed by the Employer, in collaboration with the GHA, disclosed that such technical preparations examined a number of issues. These included the project concept and rationale, scope and the strategic context of the project. Project objectives, its benefits and impacts, cost and sources of financing were also examined (OCWD, 2001).

Procurement was the responsibility of the Ministerial and Central tender committees and review boards (see section 7.2). The technical aspects of the procurement process were undertaken by the implementing agencies under the supervision of the sector ministry responsible. Describing the role of the implementing agencies in procurement, CPW5 stated as follows: ‘Even though these projects are all Ghana Government projects we being the technical eye of the Ministry…we lead in this procurement processes’. Where external funding was used, various stages of the procurement process were regularly subjected to the approval of the funding organisation. For instance, the World Bank provided elaborate

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procedures for staged review of procurement decisions of borrowers (see World Bank, 2011, Appendix 1, p. 38). These procedures were rigorously adhered to.

MOFEP had a statutory obligation to pay financial liabilities of the State (see the State Property and Contract Act, 1960, section 24). CPF1 commenting on the role of MOFEP in relation to infrastructure procurement observed as follows:

The ministry is also responsible principally for making all government's contractual payments and therefore it works with all the MDAs during the budget process to make provision for the payments of all their plans, programmes and activities within certain envelop. These payments will include necessarily payments arising from disputes which the government or any office or agency might find itself involved with (CPF1). Beyond paying government liabilities, MOFEP’s roles also extended to the review and negotiation of loan agreements, seeking of Cabinet and parliamentary approval for funding arrangements and any tax waivers associated with the funded project. Financial arrangements for infrastructure procurement including payment for works was also a multi-organisational activity involving Cabinet, Parliament, the sector Ministries and agencies of MOFEP at various stages.

Contract review and negotiations also involved multiple organisations. These included the sector Ministries, the implementing agencies, the A-Gs and Parliament. Construction contracts were negotiated by the Ministries and implementing agencies responsible for the particular project. Draft contracts were reviewed and approved by the A-Gs and Parliament (see Articles 181(5) of the 1992 Constitution). A number of factors considered during the contract review process by the A-Gs were gathered from the data. Table 7.1 below itemises some of the issues explored during the review process at the A-Gs.

Table 7.1: Codes on Factors considered during contract review by the A-Gs Standard Form Contract used Project objectives

Changes to the general conditions Dispute resolution clauses

Pricing Legal capacities

Scope of Works or assignment Elements of a valid contract How Project implementation is reflected

in contract

Guarding against impleading of Ghana before a foreign court

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Due diligence on parties to transaction Immunity provisions Engaging experts on unclear provisions Financial obligations

Value for money Termination clauses

Legal implications of Employer obligations

Scrutiny of Contract for standard provisions

In the absence of guidelines on what attorneys should look out for during the review process, they did not have access to a comprehensive list of items which needed to be considered during the review process. Conspicuously missing from the list above was an assessment as to whether a transaction requires parliamentary approval. Equally intriguing was the inclusion of issues such as pricing and ensuring value for money. These outlined roles duplicated roles which MOFEP was performing.

The review process also focused on the selection of dispute resolution mechanisms. However, such review interventions did not result in any radical changes to standard dispute clauses in General Conditions of Contract used. Where the transaction in issue constituted an international business or economic transaction to which the Government of Ghana was a party, the transaction required parliamentary approval in order to be valid (see the Constitution, Article 181(5)). Failure to comply with the constitutional provision resulted in a void transaction (see section 7.3.2.4).

Supervision of the construction phase of projects was by the implementing agencies, acting as the Employer’s Representative and the Engineer. As the Employer’s representatives, their role was to ensure that the consultant or contractor delivered in accordance with the contract provisions. This role was played by the MDAs and in some cases, private consultants. Claim settlement and dispute resolution were the responsibilities of the Engineer, the implementing agencies, the sector Ministries, MOFEP and the A-Gs (see section 7.3.6). Figure 7.2 is a visual representation of some the interactions between institutions representing the Employer pertaining to activities prior to contract execution.

145 Cabinet Government General Policy

MRH Policy direction project approvals

supervision

GHA (project preparation &

implementation) Private Consultants MOFEP Funding Arrangements A-Gs’ Legal Opinion Parliamentary Approval Ministerial Tender Committee Central Tender

Committee _{Funding request}

Funding Approval _Contractor

Policy direction & Project Approval

Policy direction& Project Approval

Preparation feedback Request for legal

opinion Legal opinion on Project

Opinion delivered

Cabinet approval

Contract Negotiation &

Execution

Participation in contract negotiations

Starting point

Figure 7.2: Web of Roles: Visual representation of interactions between sub-units of the Employer prior to contract execution (Source:Field data)

The non-linear nature of the functions of the various organisations involved in infrastructure procurement and dispute resolution and the inter-organisational relationships they engendered had implications for coordination and cooperation among the sub-units of the Employer. There was evidence of coordination problems between the A-Gs and the MDAs. CPA4 described the problem of lack of coordination and cooperation as ‘running battles with all the MDAs’. Elaborating further on what this means, CPA 4 stated that MDAs fail to cooperate with the A-Gs at the initial stages of projects. The A-Gs is consulted only when conflicts or disputes arise and the MDAs were unable to resolve them. In response to the ‘running battles’ argument, the MDAs argued that lack of capacity at the A-Gs hampered referral of transactions. CPR4, an interviewee from the road sector noted as follows:

The A-G’s office does not have the capacity to deal with all international contracts coming from all sectors. They don’t really have the time. So sometimes what happens is once our ministry gives the go-ahead, yes there is a lawyer in our ministry… a very good lawyer. So before we sign most of the documents, they are submitted to the ministry and she goes through it. What I know is that if there are certain things she has to refer to the AG’s Department, she does that. So in a way, the AG’s Department influences what we do. But I know it is not in all cases; it is only, may be, in the high profile cases that really [receive the attention of the A-G] (CPR4)

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From the excerpt above, CPR4 raised two problems with the A-Gs namely, lack of time and lack of capacity. Commenting on the same issue, CPR8 observed as follows:

Within the Authority we have contract specialists and we have engineers who have worked with contracts so what we do is we have the Conditions of Contract which is a standard document which guides us and that is the FIDIC Conditions of Contract. We fashion our contracts with the FIDIC Conditions of Contract and once we are within the ambit of the FIDIC conditions we do not go to the extent of involving other people from other agencies like the AGs department to guide us on what we should put in the contract.

The above extracts from the interviews conducted exposed some of the difficulties with inter- organisational relationships among the various sub-units of the Employer involved in the execution of projects.

The problem of lack of cooperation extended to dispute resolution. Five out of the seven interviewees from the A-Gs had concerns with the stage at which disputes were referred to the A-Gs by MDAs. To them, disputes were often referred to the A-Gs when they were ‘spoilt’ or ‘when it is too late’. In the words of CPA 1,

They will bring it [dispute] to us when the thing is spoilt. Disputes come to us when it is too late to do anything about it. They sue them then they quickly come, ‘AG, what do we do? That is standard. The lawyer is the last person to be called...When the dispute is ripe then they come to us and say this people have taken us to arbitration. Ours is just to put it together.

However, it appeared that comments on late referral of disputes to the A-Gs do not take into consideration the MDAs’ responsibility in the dispute resolution processes. Much of the initial attempts at resolving differences between the Employer and the contractor took place at the level of the implementing agencies with the technical experts and sometimes the sector ministry responsible. As noted by CPR8, because some of the issues were very technical and the AGs department did not have the technical expertise, they invariably depended on engineers from the MDAs. The issue of lack of coordination and cooperation was not limited to activities pertaining to procurement of projects and dispute referrals but also information sharing. The data as described above reveals a picture of an Employer with complex

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operational structures characterised by ineffective inter-organisational cooperation and coordination.