All you need to know about the Airport City 2 project at KIA

INTRODUCTION: GACL’S attention has been drawn to recent media publications and statements made by the Honourable Samuel Okudzeto Ablakwa alleging corrupt practices pertaining to GACL’s proposed Airport City 2 Project and the role of the selected Anchor Developer.

AIRPORT CITY 2 PROJECT AT KOTOKA INTERNATIONAL AIRPORT, ACCRA

Ghana Airports Company Limited (GACL) is a limited liability company registered in 2006 under the laws of Ghana to plan, develop, manage and maintain airport facilities and services.

The Airport City 2 Project (AC2) was conceived in 2015 as a sequel to the Airport City 1. The AC2 is supposed to be a dynamic and sustainable mixed-use development which will feature world-class urban districts to accommodate modern office complexes, residences, budget and high-end hotels, recreational facilities among others; an improvement of the Airport City 1. The enclave will be fully serviced with state-of-the-art infrastructure and will deliver premium serviced plots.

The following activities have been undertaken by Management since 2017:

1. Following the conception of the AC2 and works undertaken prior to 2017, Management contracted the services of a consultant (Brightwater Property Investment Ltd) to improve the land-use scheme, and undertake technical works including land-use surveys, engineering works and Bills of Quantities (BoQ) for the required engineering works.

2. Brightwater Property Investment Ltd (the Project Consultant) was selected through a national competitive tendering process.

3. The project consultant, Brightwater Property Investment Ltd. assessed the cost of needed infrastructure as US$84million.

The required infrastructure for AC2 was assessed through planning and engineering designs and determined to include:

a. Roads,

b. Stormwater drains,

c. Bulk water supply and reticulation,

d. Sewer reticulation system and a processing plant,

e. Bulk power supply and reticulation,

f. Internet and telecommunication infrastructure backbone,

g. Electronic security and surveillance system within the enclave,

h. Provision of a modern fire infrastructure system and tenders capable of reaching a 12-storey block,

i. The construction of a bridge across the railway line, and

j. The development of a management office.

4. Submissions were made to La Dade Kotopon Municipal Assembly (LaDMA) for the approval of the master development plan; the Department of Urban Roads for the approval of the road network design; Ghana Water and Electricity Company of Ghana for the design and approval of the utility services, the Environmental Protection Agency for the environmental approval and the Ghana Civil Aviation Authority for height restriction approval.

5. Expression of Interest was advertised in the national dailies inviting entities to apply to participate in the Airport City 2 Project. A Panel was constituted to evaluate and select qualified applicants.

Before inviting any of the selected investors for further discussion, GACL contacted Public Procurement Authority (PPA) for guidance. PPA advised GACL to contact the Ministry of Finance (MoF) because in their opinion it falls under the PPP law.

Following approval from MoF, an Offer was made to Heaven Builders. Heaven Builders responded with a Counteroffer which prompted GACL to solicit an independent professional opinion from Ghana Institution of Surveyors (GhIS).

Management has at all times acted in the best interest of GACL as our financial sustainability post COVID-19 is significantly dependent on the success of the Airport City 2 Project.

APPOINTMENT OF A CONSULTANT FOR AC2

The limited scope of the initial master development plan necessitated the engagement of a consultant. In 2018, an advertisement was placed in the national newspaper (Daily Graphic) calling for Expression of Interest (EOI) from companies with property development and engineering backgrounds. An internal evaluation team was set up to evaluate the responses obtained and recommend the most responsive submissions for further engagement with Management.

On receipt of the report, Management invited the most responsive companies to submit technical and financial proposals for consideration. The Central Tender Review Committee (CTRC) subsequently granted approval for the selected consultant, Brightwater Property Investment Limited (BPI) in 2019.

PROJECT SCOPE

Following the appointment of the Consultant (BPI), the scope of the assignment was agreed upon, which included the required engineering surveys; a new Land Use Plan and Urban Design with the accompanying development controls; the engineering design of roads, stormwater drains, bulk water supply and reticulation, engineering design for sewer reticulation systems and liquid waste processing plant, bulk power supply and distribution system, internet and telecommunication infrastructure backbone, electronic security and surveillance backbone and installation system; the construction of a bridge and an underpass at the railway crossing, provision of a modern fire infrastructure system including fire tender capable of reaching a 12-storey building, and a management centre building from which all services would be managed. The management centre is designed to provide office accommodation for the enclave management team, police, and fire service offices.

APPROVAL BY MAJOR STAKEHOLDERS

All the engineering and technical designs were submitted to the LaDMA for approval. The other stakeholders engaged for discussion and approval were the Department of Urban Roads, Ghana Water Company, the Electricity Company of Ghana, The Railway Development Authority, The Environmental Protection Agency, etc.

On receipt of the approval from the LaDMA, the Consultant, with his team of Quantity Surveyors and Engineers, drew up the Bills of quantities, costed the work, and prepared the necessary documentation for the project to proceed to the tender stage. The approved technical and financial details, including the Bills of Quantities and the costing, were submitted to the Management and the Board for approval to enable the implementation of the project to proceed.

PUBLIC INVITATION TO INTERESTED PARTIES

On approval by the Board, a public advert was placed inviting companies and individuals interested in investing in the AC2 project to express interest. Successful applicant(s) were invited to submit technical and financial proposals based on three Scenarios:

1. An investor will provide the requisite funding to GACL for the infrastructure works in return for an agreed size of land. The development of the land allocated to the investor will be subject to adherence of the approved master development plan and the accompanying developmental controls.

2. An investor will undertake the construction/ installation of the required infrastructure at their own cost in return for an agreed size of land. The development of the land allocated to the investor will be subject to the adherence of the approved master development plan and the accompanying developmental controls.

3. An investor who will partner GACL to construct/ install the infrastructure and develop some of the strategic projects in the enclave. The investor will provide the financial capability, the technical know-how, the network to draw in the required anchor tenants, and brand for the properties that would be developed. Such an investor should also have the skill to be able to analyze the structuring of various real estate deals not only for the properties to be developed in partnership with GACL but also development by individual investors. The partnership will share proceeds from the entire project.

ADVERTISEMENTS

Publications for Expression of Interest

Selection of Master/Anchor Developer(s)

Media House Date of Publication

1. Daily Graphic Thursday, February 4, 2021

2. DG Market Saturday, February 6, 2021

3. Ghanaian Times Monday, February 8, 2021

4. Daily Graphic Monday, February 8, 2021

5. B & FT Wednesday, February 10, 2021

6. Aviation Ghana Thursday, February 25, 2021

7. Daily Graphic Wednesday, March 10, 2021

8. B & FT Friday, March 12, 2021

9. Daily Graphic Monday, March 15, 2021

FORMATION OF EVALUATION PANEL AND SELECTION OF INVESTORS

Several investors responded to the Expression of Interest (EoI). A committee formed comprising:

1. Representatives from the various departments at GACL,

2. KPMG Consultant, and

3. Brightwater Property Investment Ltd. Consultant

Evaluation and shortlisting of EoI applicants was conducted on 21st July 2021. Among others, the key criteria for the evaluation and selection of a potential investor included: proof of funding, past experience, availability/qualification and competence of key staff for the assignment.

Following the evaluation, the following investors were selected:

a. Scenario 1 - No submission

b. Scenario 2 - Messrs Heaven Builders Ltd

c. Scenario 3 - Messrs Devtraco Woodland Ltd

Heaven Builders qualified for scenario 2 based on the stated criteria including proof of funding and staff capacity/capability. It must be noted that Heaven Builders applied as a Consortium of two companies i.e., Heaven Builders and SMEC.

THE PROCUREMENT PROCESS

Before inviting any of the recommended entities for further discussions regarding the award, the Public Procurement Authority (PPA) was consulted for guidance on the procurement process. PPA directed GACL to the Ministry of Finance through the Ministry of Transport to engage them on the Public-Private Partnership Act 2020. GACL engaged the Ministry of Finance and submitted detailed Feasibility Study to the Department of Public Investment Programme of the Ministry of Finance for evaluation and approval.

The Public Investment Program Review Committee evaluated the feasibility Report on March 2022. After interviewing the staff of GACL and the Consultant on the details of the feasibility report at a meeting held at the Oak Plaza Hotel in March 2022, the committee requested further clarification, which was submitted to them in April 2022. The Ministry of Finance finally approved the Project in July 2022.

INVITATION TO HEAVEN BUILDERS

On obtaining approval from the Ministry of Finance, GACL made an offer to Heaven Builders, adjudged the most responsive entity under scenario 2. The basis of the offer was for Heaven Builders to install the infrastructure at a total cost of US$85million in exchange for 38.14 acres of land.

COUNTEROFFER FROM HEAVEN BUILDERS

Upon receipt of the offer, Heaven Builders requested for meetings to discuss some unclear issues and asked for project documents for their review. After completing their due diligence, they submitted a counteroffer for 62 acres for installing the infrastructure.

INVITATION TO GHANA INSTITUTION OF SURVEYORS TO PROVIDE A VALUATION OPINION

The disparity between the GACL offer and the counter from Heaven Builders prompted Management to solicit an independent professional opinion on the value of lands in the Airport City 2 Enclave. Subsequently, the Ghana Institution of Surveyors (GhIS) was requested to provide GACL with a professional opinion on the value of the land within the AC2 enclave. The GhIS submitted its report in July 2023.

CONCLUSION

We conclude that GACL has never sought to do a sleaze deal with Heaven Builders on the Airport City 2 Project land. All legal procedures have been followed. The Project was openly advertised and went through the rigors provided under the Public Financial Management (Public Investment Management) Regulations, 2020 (L.I 2411).

Furthermore, we wish to state that at no point in time during the negotiations and processes regarding the Airport City 2 Project, has His Excellency the President, his brother, Mr. Edward Akufo-Addo, or any member of the President’s family, or the Honourable Ministers for Finance and Transport directed or interfered to get Project Lands allocated to family and friends of His Excellency the President.

The general public is, therefore, urged to disregard the erroneous reportage put out by the Hon. Okudzeto Ablakwa and the Herald Newspaper.