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Why China Company Is Seeking $55M For Ghana Cancelled Road Traffic Contract

Ghana Road Traffic
Credit: GoMetro

As part of Ghana’s government effort to regulate road traffic, Ghana entered into a contract with a Chinese company that provides these services: Beijing Everyway Traffic and Lightening Company Limited.

Beijing Everyway Traffic and Lightening company was contracted to implement the Accra Intelligent Traffic Management Project in 2018. The project was worth $100 million USD. The Accra Intelligent Traffic Management Project was intended to help improve security in the country generally.

However, there has been a major twist to this contract, as the bill that granted Beijing Everyway the contract was re-laid before Parliament. In the process, the contract has been rewarded to another Chinese company, Huawei Technologies Company Limited, and the China National Import and Export Cooperation. The bill was passed under a certificate of urgency.

Beijing Everyway has cried foul play, and in 2020 filed a lawsuit against Ghana’s claim at London’s court of international arbitration. They are represented by Zhong Lun Law Firm in Beijing.

Beijing Everyway is claiming $55 million USD as a judgement debt against Ghana’s government. Ghana has been served the notice of arbitration on Wednesday, 10 February 2021.

Management of Beijing Everyway in a statement indicated it has pass due diligence by all relevant authorities in Ghana, and this includes Minister of Roads, Ghana Embassy in China, and various Chinese agencies.

Beijing Everyway claims they were given clearance to commence the project by the Ministry of Finance and Roads in 2019.

Beijing Everyway said it had submitted $10 million USD for performance security to the Ministry and shipped over 50 containers of goods into Ghana for the project. This was done because the Ministry of Finance and Roads had given them clearance. They also paid a $17 million USD payment certificate for it.

Despite the ongoing issue, the Ministry of Roads and Highway have already started implementing the Accra-wide traffic intelligent system to reduce traffic congestion in the capital city.

So far only two of the area-wide traffic intelligent system has been implemented. They are the Kanda Highway and Castle Road and Starlet 91/Nationalism Park Traffic Lights.

Management of Beijing Everyway has indicated that this move by the Ghana government will have an adverse effect on international investor confidence in Ghana.

Will this affect China-Ghana relationship in the long run?

What do you think?

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