Ghana’s premier university, the University of Ghana has started counting its losses after a United State (US) Court slapped it with a whopping $165 million judgement debt for wrongful termination of contract with Africa Integras LLC in 2018.
The judgement debt was awarded against UG as a result of a petition filed by Global Insurer, Chubb Limited, asking a New York court to settle a $165 million arbitration award against UG for failing to honour its side of a flagship development partnership which was backed by the U.S. government.
According to the petition filed in the Southern District Court in New York, a $64 million deal was signed in 2016 to construct and maintain four new facilities and a dormitory on UG campus. A subsequent mortgage financing agreement from the U.S. State Department’s Overseas Private Investment Corporation (OPIC), now Development Finance Corporation of up to $41 million was reached.
Meanwhile, the company that insured the partnership, Chubb Limited told the court that the award reflects the value of rental income that the new campus facilities would have generated.
The partnership to construct and expand the facility on UG campus was supposed to help attract and house PhD students, thereby transforming the institution into a first-class research school. The project was expected to have expanded the university’s facilities by 60% and admission to at least 20,000 additional Ghanaian students.
Additionally, it would have involved the construction of an expanded facility for the College of Humanities, a new College of Education, a new dedicated facility for the College of Basic and Applied Sciences and the Institute of Technology and Applied Science, as well as a new facility for the College of Health Sciences to be located near the new teaching hospital on campus.
However, the problem arrived when UG could not procure a contractually required letter of credit, thereby moving to cancel the contract, which triggered negotiations in 2018.
Meanwhile, the Founder and Managing Principal of Africa Integras LLC, Andrea Pizziconi, stated that the former University of Ghana’s Vice-Chancellor Prof. Ebenezer Owusu Oduro at the time, was “actually offered several options to obtain the letter of credit. He refused the strong advice of his own advisers.”
Pizziconi noted that the VC’s actions seemed personally motivated as even the Ghanaian government, at the time, attempted to intervene to avoid the disastrous termination of the project that ensued but he refused.
Although the agreement is said to have been terminated due to the university’s failure to procure a letter of credit, it can be recalled that when a new Vice-chancellor Prof. Oduro at the time took office, he openly voiced his opposition to the contract in a series of inflammatory letters and statements to the press.
However, W.P Carey investment trust won the award in 2018 after the University of Ghana terminated the agreement with Africa Integras Limited. According to company financial records, W.P. Carey trust settled with Chubb Limited a sum of $45.6 million later the same year, which is $10 million more than what it spent on the project.
According to Africa Integras, its outfit had already poured tens of millions of dollars into the project expansion, which was only a year away from completion compelling it to head to court.
Meanwhile, University of Ghana is yet to make any official statement on the judgement debt saga.
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