Minority Fumes Over Proposed VALCO Sale

The minority group in parliament is threatening another showdown in the house following government’s intention to sell part of its shares in Volta Aluminium Company Limited {VALCO}.

Similar to that of last year during the sale of Ghana Telecom to Vodafone plc of the United Kingdom the minority says it is ready to battle government to the core over the deal. Government has initiated moves to offload 70% of its wholly owned stakes in the VALCO to a foreign consortium; International Aluminium Partners (IAP) , barely a year after it bought over 100 per cent of company from aluminium giant Alcoa.

The proposed sale of VALCO’s 70 percent stakes has been valued at US$175.5m. Instructively, Parliament would have to approve the transaction before it becomes valid.Last week, the agreement was laid before Parliament by the Minister of Trade, Industry, Private Sector Development and President’s Special Initiative, Papa Owusu Ankomah.

However, even before the committee report could be presented to the House, the minority group is kicking against the motion, citing the need for proper assessment to establish whether there was a need to sell or not to sell the proposed stakes in the national aluminium smelter.

“The minority after a careful study of the agreement and transactions wishes to call on the government to suspend the transaction to allow for a proper determination and valuation of the financial worth of VALCO by an independent valuer,” stated Haruna Iddrisu, the group spokesperson on communications.

Critics of the sale have expressed concerns about the provisions embodied in the agreement saying they were inimical to the economic interest of the country and general future of the aluminium industry in Ghana.Sections of the agreement demands VALCO to enter into a binding and irrevocable power purchase agreement or electricity supply agreement with the VRA.

According to the agreement, an initial payment of $25m shall be made to the consortium within fifteen days from the execution of the agreement and the balance, upon approval of the agreement by parliament.“The indecent haste with which the government wants to push this very important transaction in the last days of this parliament and the administration is mindboggling,” States the opposition parliamentarians.

This controversial move by government comes in the wake of the recent buy-over of the smelter from its former stakeholders in what it described as a repurchase of a national strategic asset.Government recently bought over ALCOA’s 10% stake in the now dormant 200,000 tone capacity VALCO smelter for $2 million.

Inspite of the relatively stable power supply in the country now, ALCOA willingly offloaded its shares.Government’s purchase of ALCOA’s remaining 10% shares in VALCO means a total buy-out of ALCOA from VALCO because government had initiatially repossessed 90% of the smelter from the American company.Meanwhile, government has proposed an integrated aluminium industry which the country’s bauxite will be mined, refined and processed to near-end products in the country.

The integrated aluminium industry would also link to the railway system in the country which depends largely on the transportation of bauxite for its revenues.