Vodafone pact before Parliament

Page: Centre Spread, July 10, 2008
Story: Emmanuel Adu-Gyamerah
THE agreement between the government and Vodafone International Holdings B.V, a UK-based telecommunication company, for the sale and purchase of 70 per cent ordinary shares of the Ghana Telecommunication Company Limited for $900 million, was laid before Parliament for consideration yesterday.
The Speaker of Parliament, Mr Ebenezer Begyina Sekyi Hughes, referred the agreement to the Joint Committee on Finance and Communications soon after it had been laid for consideration and report.
The House is expected to approve the agreement before it rises on July 18, 2008.
Already, the Minority in Parliament has expressed disappointment at what it terms “the general lack of openness and transparency in the privatisation of Ghana Telecom”.
At a press conference it organised last week, the Minority asked why the government exclusively negotiated with only Vodafone, without considering other bidders who could have made higher offers.
It described the situation as “a breach of established norms and standards for the privatisation of a telecommunication entity as required by the International Telecommunications Union (ITU)”.
The Minority Ranking Member of the Committee of Communications, Mr Haruna Iddrisu, who addressed the press, said after the advertisement for the sale of GT, offers were received from prospective buyers, including Egypt Telecom, France Telecom, Globacom and a local Ghanaian-led consortium.
He said France Telecom’s bid was the highest and negotiations began with it, but in December 2007 those negotiations stalled at the due diligence stage, primarily as a result of what he described as the unrealistic asset valuation expectations of the government.
He said France Telecom’s offer was estimated at $550 million for 60 per cent shares.
Mr Haruna said in January 2008, the government announced an indefinite suspension of the sale due to its inability to reach satisfactory terms with any of the bidders.
According to him, in March 2008 overtures were made to Vodafone UK for its offer.
“Vodafone’s offer, as we were told from government’s own sources, was $960 million, with stringent caveats still far below the Minority’s expectations of $1.5 billion or more for the value of GT,” he said.
He said, however, that in the 2007 supplementary budget, the government had projected to earn $500 million from the combined sale of GT and Westel, adding that ”the Minority did not hesitate in describing those figures as abysmally low and unrealistic”.
Mr Haruna said Ghana Telecom was the only company with fixed communication assets and noted that fixed communication assets were central to the provision of broadband services, a critical need for utilising ICT for economic growth and social progress.
Given that position taken by the Minority, even before the matter was brought before the House, debate on the agreement is expected to be conducted with either side taking an entrenched position.