Liberia to Lose US$120m if LEC Contract Prematurely Terminated’

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Cllr. J. Fonati Kofa chairs the LEC Public Hearing

-Board Chair Tells House’s Joint Committee

The chairman of the board of the Liberia Electricity Corporation (LEC), Dr. Clarence K. Moniba, told the House of Representatives yesterday that Liberia will lose more than US$120 million if the current contract with the management is prematurely terminated.

Dr. Moniba told lawmakers that the Management Service Contract with the Ireland-based ESBI Engineering & Facility Management Limited that is being investigated on allegations of undermining the laws of the country has not violated any of the country’s laws.

He said in October 2016 a US$257 million contract was signed between the Government of Liberia and the Millennium Challenge Corporation (MCC).

The $257 million is intended to encourage economic growth and reduce poverty in Liberia by focusing on the inadequate road infrastructure and access to reliable and affordable electricity in the country.

The program empowered the poor and promoted shared American values through a focus on improving land rights and access, increasing girls’ primary education enrollment and retention, and improving Liberia’s trade policy and practices.

He said any rash termination of the MSC will cause donors to withdraw their respective support and it would hurt the country badly.

Dr. Moniba, along with Mr. Monie Captan, (LEC Board Member) and head of the Millennium Challenge Account-Liberia, Ms. Krystle, MCC Project Manager; and Cllr. James A.A. Pierre, were in attendance in a Public Hearing with the House’s Joint Committee, chaired by Judiciary Committee chairman, Cllr. J. Fonati Koffa.

LEC Board Chair, Dr. Moniba, talks with the press

Dr. Moniba said out of the US$257 million, US$121 million is allotted to Mt. Coffee, training, construction of roads, among others.

The LEC team argued that issues raised by Montserrado County District #12 Representative Dixon Seboe about undermining the country’s laws regarding contracts and employees being exempted from tax, are part of the “treaty” signed between the MCC and the Liberian government.

They further said Liberians who were in senior management positions, including the Acting Chief Executive Officer, have been replaced and are serving as Advisors and are under training and their respective benefits, and have not been cut.

They said capacity of local Liberian managers and staff will be done through a structured and comprehensive training and development program that will take place both in the country and in Europe and when the contract expires, the trained and experienced Liberian management team will be in place capable of assuming all aspects of the management of the LEC.

Meanwhile, members of the Joint Committee have expressed dissatisfaction over the MSC, which has exempted contractors and employees from tax and the replacement of Liberians by foreigners in fulfillment of the MCC Contract.

Some members of the Joint Committee include Representatives Adolph Lawrence, Francis Nyumalin, Larry Younquoi as well as the complainant Rep. Dixon Seboe.

The MCS has a three-year Management Service Contract with a two-year renewal option for the management of the Liberia Electricity Corporation (LEC).

13 COMMENTS

  1. Liberians do not read contract and this is what happens when you put morons in power. You cancel the contract, you will pay. I hope they cut every Senator’s salary to pay the 125 million if the company pulls out.

    • Let the Gov’t lawyers get to work by reviewing terms of the contract…This all by design…by the former gov’t…And you are right…

      • Ben & Sando
        I urge you to do a bit more research on the MCC and their partnership with Liberia. You can begin by a Google search of Monie Captan and MCC. That $257 million is a grant given by the US government, our legislature and executive branch approve of the MCC and one of the agreements that was approved was that the MCC organization not be under the authority of the Liberian government ( I am not saying they can violate human rights laws and the laws of the country). He reports to the head of the MCC and is accountable to them. Now if you are granting a country like Liberia $257 million to help with its economic constraints (read Monie Captan – Liberia Constraints Analysis. Government of Liberia. September 2013)…will you not want 100% say on who manages the funds? Now if you research a bit deeper you will find the article where the agreement between the GOL and MCC was signed. There are possibilities that Liberians have a management firm that can manage LEC…maybe…but remember the person who holds the gold makes the rule. O…by the way that $257 million was not offered to Liberia, we went asking for it because we are economically constrained. What I think we should focus on is being able to identified tangible results of that $257 million. The GOL was not able to secure this kind of funding from taxes or revenue….if you were in their shows what would you do? Remember that $257 million will help create jobs…and if you are in the legislature or executive branch…does that not help?

          • Agreed!…hopefully one day we will…but hey this deal is not a bad deal..in 5 years if every thing goes as plan we will have a more polished management workforce comprised on mostly Liberians…

  2. This is where education comes in. Where were these very representatives and senators when this very document was signed on behalf of Liberia. There are international law and rules of engagement that protect the interest of all investors and host Country (Liberia) interest.

    This is why you have to use the best minds avaible in your respective Country taking into consideration both national and international law before you go into or engaged yourself with such a huge deal/contract.

    Let me make it simple from the law perspective. If the government of Liberia terminate this contract the investor (MCC) has nothing to lose. Because this will amount to expropriation of property causing the campany to find herself in debts for the due investment she had undertaking.

    Now there are law protecting companies interests regarding terminating/expropriating their rights or access to to the field to work on the contract aready signed by both parties that in this practical case is binding also on both parties.

    Again, this goes both ways, if the company (MCC) decides to terminate said contract/work it also amounts to expropriation from investor(MCC) and host country government(Liberia) under international law. What Liberia needs now is apparently negotiation. These lawmakers are really serious to develop this Liberia?

    • Gyude, I urge you to do a bit more research on the MCC and their partnership with Liberia. You can begin by a Google search of Monie Captan and MCC. That $257 million is a grant given by the US government, our legislature and executive branch approve of the MCC and one of the agreements that was approved was that the MCC organization not be under the authority of the Liberian government ( I am not saying they can violate human rights laws and the laws of the country). He reports to the head of the MCC and is accountable to them. Now if you are granting a country like Liberia $257 million to help with its economic constraints (read Monie Captan – Liberia Constraints Analysis. Government of Liberia. September 2013)…will you not want 100% say on who manages the funds? Now if you research a bit deeper you will find the article where the agreement between the GOL and MCC was signed. There are possibilities that Liberians have a management firm that can manage LEC…maybe…but remember the person who holds the gold makes the rule. O…by the way that $257 million was not offered to Liberia, we went asking for it because we are economically constrained. What I think we should focus on is being able to identified tangible results of that $257 million. The GOL was not able to secure this kind of funding from taxes or revenue….if you were in their shows what would you do? Remember that $257 million will help create jobs…and if you are in the legislature or executive branch…does that not help?

  3. I am not a legalist and so my hope is some legal minds will help me out here. When does a contract meet the requirement for rescission or annulment?

    Certainly as a nation we do not want every successive administration to annul contracts signed by its predecessors, as it would make the government very unreliable. However, I would think that when a contract between parties is so skewed at the disadvantage of the other, it would require rescindment; at least it would allow both parties to reset the clock and start at the beginning. Redrawing the contract where both parties will benefit is not a bad start, and I am sure the international organizations that Dr. Monibah talks about will favor it; unless of course their intention is otherwise which I don’t think it is. I wonder why they would withdraw funding if the interest of the country is lacking in the contract to begin with, and the only reason the current government wants it rescinded is to renegotiate the contract to incorporate the nation’s interest.

    There’s no harm in taking another look at the contract and see if it violates the spirit of its intended purpose. I think what the government wants is a fair contract that falls within the laws of the country, where it’s mutually beneficial. On the other hand, I don’t think it would be beneficial for the country to annul contracts willy-nilly…

    • John, I urge you to do a bit more research on the MCC and their partnership with Liberia. You can begin by a Google search of Monie Captan and MCC. That $257 million is a grant given by the US government, our legislature and executive branch approve of the MCC and one of the agreements that was approved was that the MCC organization not be under the authority of the Liberian government ( I am not saying they can violate human rights laws and the laws of the country). He reports to the head of the MCC and is accountable to them. Now if you are granting a country like Liberia $257 million to help with its economic constraints (read Monie Captan – Liberia Constraints Analysis. Government of Liberia. September 2013)…will you not want 100% say on who manages the funds? Now if you research a bit deeper you will find the article where the agreement between the GOL and MCC was signed. There are possibilities that Liberians have a management firm that can manage LEC…maybe…but remember the person who holds the gold makes the rule. O…by the way that $257 million was not offered to Liberia, we went asking for it because we are economically constrained. What I think we should focus on is being able to identified tangible results of that $257 million. The GOL was not able to secure this kind of funding from taxes or revenue….if you were in their shoes what would you do? Remember that $257 million will help create jobs…and if you are in the legislature or executive branch…does that not help?

  4. Its very very sad to read this and to handle this entire LEC Contract. This is what happens when you are “DESPERATE” and do not have the understanding of simple “Nation Building”. Why would you accept $257M of “Corporate Welfare Money” to fund your budget and then you SIGN it in “Blood” and hand over your Economy and your Future Growth and Development. You have people sitting and negoiating a deal on Power and Economic Growth who have NO UNDERSTANDING, KNOWLEDGE, APPRECIATION or INSIGHT on what they are handing over and what they are getting in return. The fact that you have a Hydro built in your country and you are now on the Road to National Development means that you now have FREE “Generation” from your River and all you need to cover now is your “OpEx Cost” and your National Transmission and Distribution to the key “Load Centers” to stimulate the local economies in each of the “Load Center Areas” – And you took a YOKE and put it around your NECK and signed the paper !!!!!!!!!! Now this Company and its Shareholders in Europe and the USA are going to MILK you for all your economy produces and control your National Development. HOW can you not see that ?? HOW ??? I was planning to write an Article on HOW and WHAT to do on the National Transmission and Distribution Power Network to stimulate Jobs and Economic Development for the New Administration, but when I read about this Agreement / Contract / Yoke / Chain of Slavery, I just dropped my head and said the “Banksters Have Won AGAIN” in another Developing Country by YOKING the Nation out of IGNORANCE. This is SAD !!!!!!!!!!!! DO you know HOW much money the national budget can recieve from a GST on LEC Bill Payment as the National Grid Network is expanded into the Major Load Centers within a 50 – 75 Mile Radius of Monrovia at a less than US$3 – 5M per year OpEx at Mount Coffee ??

    • Al. Phillips
      I urge you to do a bit more research on the MCC and their partnership with Liberia. You can begin by a Google search of Monie Captan and MCC. That $257 million is a grant given by the US government, our legislature and executive branch approve of the MCC and one of the agreements that was approved was that the MCC organization not be under the authority of the Liberian government ( I am not saying they can violate human rights laws and the laws of the country). He reports to the head of the MCC and is accountable to them. Now if you are granting a country like Liberia $257 million to help with its economic constraints (read Monie Captan – Liberia Constraints Analysis. Government of Liberia. September 2013)…will you not want 100% say on who manages the funds? Now if you research a bit deeper you will find the article where the agreement between the GOL and MCC was signed. There are possibilities that Liberians have a management firm that can manage LEC…maybe…but remember the person who holds the gold makes the rule. O…by the way that $257 million was not offered to Liberia, we went asking for it because we are economically constrained. What I think we should focus on is being able to identified tangible results of that $257 million. The GOL was not able to secure this kind of funding from taxes or revenue….if you were in their shows what would you do? Remember that $257 million will help create jobs…and if you are in the legislature or executive branch…does that not help? I understand your concern but please enlightened me on where we were going to find the $500-$600 Million to build this infrastructure, and also who would sign off on this in Liberia without wanting a cut?……

  5. Complacency and the feeling of being “over qualified and well elite” were some of the problems the past leadership exhibited, this put us in the mess we find ourselves in as a country. These kinds of documents are been perused by people who knows the issues and subject matter and not because you are an officials of government and you knew that money was in it and you egoistically endorsed them.
    This is just the beginning of problems that this government will experience, there are lots of bogus and quasi contracts out there that will embarrass this government in its effort to do the people business Where were Dr. Clarence K. Moniba, Monie Captan and the others officials of the board when these documents was signed.
    I recommend a change to the entire team on the board, we need people who knows what hardship is when they went to school and feel the plight of the people and make good decisions. Even our indigenous Liberians in the legislature and executive branch must now start making decisions that will change the people lives positively or the six years will be too short for them. No more free money eating, big salaries or unnecessary benefits and incentives.

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