SGAGL refutes Ablakwa’s allegations of inflated costs in ambulance deal

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The Service Ghana Auto Group Limited (SGAGL) has denied accusations of inflated costs in its contract for the after-sales service and maintenance of 307 ambulances.

In a statement released on Thursday, August 1, 2024, SGAGL responded to claims by North Tongu MP Samuel Okudzeto Ablakwa, who alleged financial misconduct in the procurement and maintenance of the ambulances. SGAGL described the MP’s allegations as baseless and unfounded.

“SGAGL is a special purpose vehicle (SPV) formed by a consortium of seven companies that participated in a competitive procurement process. It was not sole-sourced and was chosen based on merit to procure and provide after-sales service and maintenance for 307 Mercedes Benz Sprinter ambulances for the National Ambulance Service (NAS),” the statement read.

The controversy began when Mr. Ablakwa, who also chairs the Parliamentary Economic Committee, accused the government and SGAGL of engaging in a “rip-off” deal.

He claimed that former Finance Minister Ken Ofori-Atta had hurriedly approved a payment of $34.9 million for ambulance spare parts, arguing this amount, roughly $113,000 per ambulance, was excessively high compared to the cost of new ambulances. He further alleged that $10 million had already been paid to SGAGL.

However, the Bank of Ghana (BoG) later clarified that no payment had been made on the $10 million letter of credit, as the required demand for payment had not been made. SGAGL also addressed this in their press release, stating, “the $34.9M, of which Letters of Credit (LC) were established for $10M, is falsely assigned to cover only mechanical parts, and the figure was again deceitfully allotted at about $113,000 worth of spare parts per ambulance.”

SGAGL explained that the initial competitive procurement process was initiated by the Ministry of Special Development Initiatives in November 2018. The process invited tenders for 275 units of 4×4 ambulances, which were later adjusted to 307 units of 4×2 vehicles.

“Sixteen companies participated, including the seven companies that eventually formed the consortium during the pre-tender workshop round,” the statement detailed.

The companies in the consortium included 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.

The press release emphasized the consortium’s compliance with all tender requirements, including obtaining manufacturer’s authorization from Mercedes Benz for the ambulances and EMSA AMBULANCES for the medical equipment installed in the vehicles.

SGAGL noted that they had established a dedicated workshop and support infrastructure, including the renovation of the Ministry of Agriculture’s workshop in Kumasi and a purpose-built workshop at the NAS headquarters in Accra.

SGAGL also addressed the findings of a 2022 Performance Audit by the Auditor-General, which reportedly highlighted issues such as inflated invoices and mismanagement.

The company acknowledged disagreements with the audit report and stated that they had refunded amounts mistakenly labeled as double payments.

SGAGL warned against spreading false information regarding the procurement of the ambulances and its after-sales service, threatening legal action against those who propagate such misinformation.

“The Consortium and SGAGL have and will continue to act above board in their dealings,” the statement concluded, adding that they will hold accountable those responsible for spreading false allegations.