Page 1 1 Document of The World Bank Report No: 60613-AFR RESTRUCTURING PAPER ON A PROPOSED PROJECT RESTRUCTURING OF SECOND PHASE OF COASTAL TRANSMISSION BACKBONE PROJECT (CREDIT NO. 4213) TO THE REPUBLIC OF GHANA December 20, 2010 Page 2 2 ABBREVIATIONS AND ACRONYMS AfDB African Development Bank AfD Agence Française de Developpement APL Adaptable Program Lending BOAD Banque Ouest Africaine de Developpement CEB Communauté Electrique du Bénin CIE Compagnie Ivoirienne d’Electricité CMU Country Management Unit CTB Coastal Transmission Backbone ECOWAS Economic Community Of West African States EEP Ecowas Energy Protocol EIB European Investment Bank EMP Environmental Management Plan GoG Government of Ghana GRIDCo Ghana Grid Company GS Generation Station IDA International Development Association KfW Kreditanstalt fur Wiederaufbau kV kilo Volt MVAR Megavolt Ampere Reactive OFGW Optical Fiber Ground Wire PAPs Project Affected Persons PDO Project Development Objective RAP Resettlement Action Plan RIAS Regional Integration Assistance Strategy for West Africa ROW Right – of- Way RRDP Regional Regulatory Development Project SCADA/EMS Supervisory Control and Data Acquisition/Energy Management System T-Line Transmission Line VRA Volta River Authority Regional Vice President: Obiageli Katryn Ezekwesili Country Director: Ishac Diwan Sector Manager / Director: S.Vijay Iyer Task Team Leader: Sunil W. Mathrani Page 3 3 AFRICA WAPP APL 1 (2ND PHASE - COASTAL TRANSMISSION BACKBONE) P094917 CONTENTS Page A SUMMARY B PROJECT DESCRIPTION C PROJECT STATUS D PROPOSED CHANGES E APPRAISAL SUMMARY ANNEX  A KEY OUTCOME INDICATORS ANNEX  B RESULTS FRAMEWORK AND MONITORING ANNEX  EXTENSION OF CLOSING DATE ANNEX  FINANCIAL MANAGEMENT SUPERVISION REPORT ANNEX  PROCUREMENT CAPACITY ASSESSMENT OF GRIDCO Page 4 4 PROJECT DATA SHEET Date: 21 December, 2010 Team Leader: Sunil W. Mathrani Country: Ghana Sector Manager/Director: S. Vijay Iyer Project Name: WAPP APL 1 (2 nd Phase - COASTAL TRANSMISSION BACKBONE) PROJECT Country Director Ghana: Ishac Diwan Project ID: P094917 Environment Category: Category B Recipients: Government of Ghana Responsible Agency: Volta River Authority (Changed to GRIDCo) Revised estimated disbursement (Bank FY/US$m) of original $45 m FY 2008 2009 2010 2011 2012 2013 Cumulativ e 0 1,980,000 13,390,000 24,390,000 43,390,000 47,580,000 Annual 0 1,980,000 11,410,000 11,000,000.0 0 19,000,000.0 0 4,190,000 Current closing date: December 31, 2010 Indicate if the restructuring is: Board approved: __ RVP approved: _X__ Does the restructured project require any exceptions to Bank policies? No Extension of a Grant Closing Date when the rating is less than satisfactory (OP/BP 13.30) Have these been approved by Bank Management? Yes Is approval for any policy exception sought from the Board? No Revised project development objectives/outcomes (if applicable): Does the restructured project trigger any new safeguard policies? No Financing Plan (US$m) Source Local Foreign Total Borrower/Recipient 8.45 6.55 15 IDA 0 45 45 Total 8.45 51.55 60 Page 5 5 WAPP APL 1 (2ND PHASE) - COASTAL TRANSMISSION BACKBONE PROJECT RESTRUCTURING PAPER SUMMARY 1. The proposed changes to the West African Power Pool Coastal Transmission Backbone Project, Second Phase (WAPP – CTB, Credit No. 4213-GH) are the following: (i) transfer of project implementation responsibility from the Volta River Authority (VRA) to the Ghana Grid Company (GRIDCo); (ii) extension of the closing date of the Credit by two and half years, to enable the Borrower to complete the activities of the project, specifically the Supervisory Control and Data Acquisition/Energy Management System -SCADA/EMS, (component 2), which has been delayed by over two years and (iii) revision of the results framework. 2. This restructuring will not affect Project Outcomes, the Project Development Objectives or the Environmental and Social Safeguards category. The project’s scope and output will remain unchanged. PROJECT DESCRIPTION 3. The second phase of the IDA Credit for the WAPP APL 1 project, approved in FY06 (Phase II of WAPP APL1) is part of a co-financing package for the segments of the 330kV interconnection between Ghana and Nigeria via Togo and Benin. The African Development Bank (AfDB) and the KfW are funding the construction of the T-line segment from Tema in Ghana through Lome (Togo) to Sakete (on the Benin-Nigeria border). The line is expected to become operational by 2013. 4. The Project comprises the following: (i) Transmission Infrastructure Development; (ii) Upgrade of System Control Centers/SCADA, (iii) Upgrade of Akosombo and Kpong Power Generation Stations, (iv)Institutional Capacity Building Support for the WAPP Secretariat. It is accompanied by a parallel IDA Credit (No. 4214–BE) for related activities in Togo and Benin. PROJECT STATUS 5. The project complies with all covenants and was rated moderately satisfactory at the time of the last ISR in June 2010. As of November 2010, a total of US$14.6 million or 32% of the Credit (US$45m) had been disbursed and all contracts have been awarded. Page 6 6 Adequate funds are available in the Credit to fully cover these contracts. Project disbursement has dramatically improved of late, when compared with a low 5% disbursement rate in January 2010. 6. All contracts have been awarded and works have commenced. Contracts include : 1. For goods and works, (i) Construction of 3rd bulk supply point Accra/Tema (US$11.6 million); (ii) Supply of transformers for Accra East Substation (US$3.1million); (iii) Upgrade of Kpong Generation Station Switchyard (US$6 million); (iv) Supply of reactors and transformers for Akosombo and Volta substation (US$4.3 million); (v) Extension of the 161KV Asiekpe and 330KV Volta substation (US$5 million); (vi) Rehabilitation of cranes and rust treatment of cranes and penstocks of Akosombo Generation Plant; (vii) upgrade of the communications system for SCADA (US$5.5million). 2. For technical assistance (i) Project supervision and management (US$5 million); (ii) Feasibility, Engineering and preparation of Bidding Documents for 330kV Aboadze - Prestea - Kumasi - Han and 161kV Tumu - Han - Wa Transmission System (US$1.4million); (iii)Environmental and Social Impact Assessment (ESIA) for 330kV Aboadze - Prestea - Kumasi -Han and 161kV Tumu - Han - Wa Transmission System (US$ 0.3million); (iv) Akosombo GS & Kpong GS Emergency Preparedness Plans (US$3.8million). 7. The Government of Ghana has requested an extension of the closing date of 24 months but in the view of the project team an extension of 30 months is required for the following reasons: (i) testing of telecommunications equipment (fiber optics) after installation is likely to take more time than anticipated, and (ii) the engineering supervision of the T-line segments funded by Cr. 4214-BE, which is an integral part of the project, will require 30 months to complete. PROPOSED CHANGES · Project Development Objectives 8. The PDO remains unchanged namely “The development objective of this WAPP APL 1 is to to increase access of WAPP “Zone A” Coastal States (Côte d’Ivoire, Ghana, Benin Togo and Nigeria) to more reliable electricity to alleviate supply deficits during peak power demand periods and/reduce vulnerability to hydro induced power supply disruptions.” · Results/indicators Page 7 7 9. In the original result framework, benefits of the project could not be assessed until all project works were completed. This anomaly was raised during the QAG Learning Review of Regional Projects in November 2009. The new indicators proposed below will reflect results of intermediate achievements such as the energy delivered through the Tema – Ghana border T-Line and the improvement in the voltage level by the increase of reactive power. Page 8 8 Table 1: Results Framework Component/Intermediate Results Results Indicators (initial) Additional Indicators (new) Use of Results Monitoring Component 1: . Infrastructure Development – Coastal Transmission Backbone Outcome: Increased capacity for power exchanges between WAPP “Zone A” Coastal States. Component 2: Upgrade of System Control Centers Coastal Transmission Backbone Outcome: Improved monitoring and control of power exchanges between WAPP “Zone A” Coastal States. C1.l Increased quantity of electricity transferred between WAPP “Zone A” Coastal States, disaggregated by power utility. C2.1 Percent reduction in the number and frequency of power outages that are linked to malfunctions on the Coastal Transmission Backbone, disaggregated by power utility . C2.2 Percent reduction in the detection/response time for power outages that are linked to malfunctions on the Coastal Transmission Backbone, disaggregated by power utility. C1.2 Quantity of electricity (MW) delivered through completed transmission line and substations C.1.3 Reduction in outages due to the commissioning of the transmission line and substations C1.4 Improvement of voltage by the increase of the reactive power due to the commissioning of the transmission line and substations To show the increase of transit capacity of the WAPP transmission link -To determine the increased reliability of the WAPP transmission link - To determine the increased reliability of the WAPP transmission link . To implement WAPP “Operational Mitigation and Security Plans” in order to assure secure and reliable power exchanges along the Coastal transmission Backbone. . To determine operational effectiveness of system control centers of WAPP “Zone A” Coastal States. Page 9 9 · Institutional arrangements 10. Significant institutional changes have occurred in the electricity sector in Ghana since the project was approved by the Board in 2005, most particularly the separation of power generation from transmission. As a result of these changes, VRA is no longer responsible for transmission, which was hived off to a new public entity, Ghana Grid Company Ltd (GRIDCo). Since the majority of project components are related to transmission, the Government of Ghana has requested the transfer of project implementation responsibility to GRIDCo. 11. During the Mid Term Review of May 2009 and subsequent supervision missions, an exhaustive assessment of GRIDCo ’s capability to takeover full legal responsibility for the WAPP project was carried out. IDA concurrence can now be granted for legal amendments to the existing Credits with GoG to reflect the role of GRIDCo as implementing agency, as all necessary legal, operational and accounting actions have been fulfilled. VRA and GRIDCo have agreed on the terms of a memorandum of understanding concerning the arrangements for handover of the responsibilities of VRA under the Project to GRIDCo. This will be signed in January 2011. A new subsidiary loan agreement is also being prepared between GoG and GRIDCo and this will be a condition for the proposed amendments to the legal agreements between IDA and the Borrower to take effect. · Supervision Strategy 12. Continued intensive project supervision is proposed, mainly by field office staff in Ghana, Togo and Benin. This would build upon the enhanced supervision that was carried out in FY09-FY10 to ramp up the pace of implementation and assist VRA and GRIDCo with the separation of their operations. Supervision resources covered key engineering, economic, and safeguards compliance activities and senior safeguards specialists were also assigned to the team. · Financial management 13. The FM team carried out a follow-up review of the financial management arrangements of GRIDCo to ascertain the extent to which transitional arrangements covering the separation of GRIDCo from the VRA and with it the transfer of the project to GRIDCo had been completed. It also assessed the adequacy of the FM arrangements to support project implementation and follow up on issues raised during the May 2009 detailed review. Following the review, the team confirms that transition arrangements are fully completed and the independent company GRIDCo is fully functional at this stage. The team concludes that the existing FM arrangements at GRIDCo are adequate and meet the minimum requirement for financial management under OP/BP 10.02. · Procurement 14. GRIDCo has since its establishment set up all the necessary structures for the conduct of procurement as prescribed by the Public Procurement Law. It also has a full complement of key procurement and technical staff who are also proficient in World Page 10 10 Bank Procurement procedures as well as the national procurement procedures. It is also noted that structures for approval and oversight like the tender committee and tender review board are in place and functioning. 15. It is recommended that since GRIDCo now has all the legal and operation procurement structure in place and has adequately staffed procurement department with good knowledge in World Bank as well as the national procurement procedures, the WAPP project unit can now be officially transferred and integrated into GRIDCo. · Closing date 16. The project finances project management, engineering construction supervision and consultancy services for the Ghanaian portion of the second phase of the Coastal Transmission Backbone T-Line from the Volta substation (Tema) –Lome C – Sakete (WAPP APL1 phase 2), which has been delayed until Q1 2013, because of difficulties in securing funding for the Togolese portion of the T-line (which was a disbursement condition for the AfDB loan). This funding has now been secured from KfW and bidding documents are ready. In addition the SCADA/EMS component was delayed because of anomalies in the bidding process, which are now resolved. Therefore an extension of the closing date from December 31, 2010 to June 30, 2013 is requested to permit adequate completion and testing of all project works. Page 11 11 · Implementation schedule Table 2: Summary of contract implementation schedule Component Contract Contract amount (Million US$) Initial completion date Rescheduled completion date Contract P5-1. Supply of Reactors and Transformers for Akosombo and Volta Substations 4 December 2008 July 2011 Contract P5-3 .Extension of the 161 kV Asiepke and 330 Volta Substations 9.2 March 2009 September 2011 Contract P5-4 . Construction of 3 rd Bulk Supply Point Accra/Tema 11.6 November 2008 July 2012 Contract P5-4-3 . Supply of Transformers 3.1 February 2010 December 2010 Component 1: Transmission Infrastructure Development Contract P-6 .Upgrade of the Kpong Generation Station Switchyard 5.6 November 2008 December 2010 Component 2: Upgrade of Transmission Control and Communications System Contract P II. SCADA/EMS Upgrade for VRA Network 7.8 April 2009 December 2012 Contract P-7 .Rehabilitation of Cranes and Rust Treatment of Cranes and Penstocks 4 March 2009 November 2011 Component 3: Upgrade of Strategic Power Generation Stations Contract C-6 : Akosombo GS & Kpong GS Emergency Preparedness Plan 3.3 September 2007 February 2011 Contract P-8 . Equipments for the VRA Training Centre in Support of the WAPP Organization. 2.2 June 2009 August 2011 Contract C4R. Feasibility, Engineering and preparation of Bidding Documents for 330kV Aboadze - Prestea - Kumasi - Han and 161kV Tumu - Han - Wa Transmission System 1.6 October 2007 January 2011 Component 4: Implementation of WAPP Action Plan Contract C5R. Environmental and Social Impact Assessment (ESIA) for 330kV Aboadze - Prestea - Kumasi -Han and 161kV Tumu - Han - Wa Transmission System 0.3 September 2008 June 2010 Page 12 12 · Undertakings in the Legal Agreement The following covenants (1, 2 and 3 of Section IV) of the Project Agreement (PA) have been fulfilled by VRA and therefore will not be included in the new PA for GRIDCo. 1. Not later than twenty-four (24) months after the Effective Date, the Project Implementing Entity shall prepare and make operational emergency preparedness plans for the Akosombo and Kpong generation stations. 2 . Not later than December 31, 2006, the Project Implementing Entity shall establish an expert advisory panel with the responsibility of assisting, together with the WAPP Organization, in the implementation of the Operational Security and Mitigation Plan. 3. Not later than December 31, 2006, the Project Implementing Entity shall furnish to the Association evidence that the Recipient has transferred to the Project Implementing Entity the funds earmarked in the R ecipient’s 2006 supplementary budget to compensate the Project Implementing Entity for government-set subsidies embedded in existing bulk power supply arrangements. The effectiveness of the proposed amendments is subject to the execution of a subsidiary loan agreement between GoG and GRIDCo and the submission to IDA of a Legal Opinion from the Attorney General. APPRAISAL SUMMARY Benefits 17. The restructured project is expected to reinforce the project’s benefits, as follows: · Increasing cross-border electricity trade between WAPP “Zone A” Coastal States; · Reducing power transfer losses in the principal transmission networks of the WAPP “Zone A” Coastal States; and · Improving cost efficient coverage of peak power demand through economy power exchanges between WAPP “Zone A” Coastal States. 18. However, it should be noted that the above benefits will only be possible when the entire coastal backbone from Lagos to Takoradi in western Ghana via Benin and Togo is commissioned in mid-2013. Risks 19. The three initial project risks remain, as stated in the original project document. However a fourth risk related to the synchronization of transmission systems has been added. First, there continue to be challenges to regional integration and finding ways for Page 13 13 ECOWAS member states to relax national self-sufficiency approaches in favor of a shared, regional approach (e.g. economically sized generation facilities; harmonization of regulatory instruments and shared generation reserves). In this regard, the ECOWAS Regional Regulatory Development Project (RRDP), funded by AFD, has assisted in strengthening cooperation in developing of a consensus-based regulatory framework for WAPP. 20. Second, there is the risk of non-application (or lack of respect) by a few ECOWAS member states to adhere to Ecowas Energy Protocol principles that are critical for WAPP’s long-term operation (i.e. third-party access to power generation and transmission facilities; and free transit of electricity, or power wheeling. 21. Third, there continue to be risks of further delays due to weak implementation capacities. These risks are mitigated by the recruitment of an engineering firm providing technical assistance to the project team. However, inter linkages with the implementation of the AfDB segment of the T-line mean that further delays due to exogenous factors cannot be entirely ruled out. 22. Fourth, in order to draw all the benefits from the transmission line, the CEB/VRA (Ghana-Togo-Benin) system must be synchronized to the TCN (Nigeria) system to effective power exchange, which is not presently the case. To mitigate this risk system synchronization component will be included in the new WAPP Ghana-Burkina interconnection project under preparation. Page 14 1 4 A N N E X 1 - A K e y O u t c o m e I n d i c a t o r s P r o j e c t R e s u l t s F r a m e w o r k ( u n c h a n g e d ) P D O P r o j e c t O u t c o m e I n d i c a t o r s U s e o f P r o j e c t O u t c o m e I n f o r m a t i o n P D O : T o i n c r e a s e a c c e s s o f W A P P “ Z o n e A ” C o a s t a l S t a t e s ( C ô t e d ’ I v o i r e , G h a n a , B e n i n T o g o a n d N i g e r i a ) t o m o r e r e l i a b l e e l e c t r i c i t y t o a l l e v i a t e s u p p l y d e f i c i t s d u r i n g p e a k p o w e r d e m a n d p e r i o d s a n d / r e d u c e v u l n e r a b i l i t y t o h y d r o i n d u c e d p o w e r s u p p l y d i s r u p t i o n s . O U T C O M E S - I n c r e a s e d c r o s s - b o r d e r p o w e r e x c h a n g e s b e t w e e n t h e W A P P “ Z o n e A ” C o a s t a l S t a t e s . - R e d u c e d p o w e r t r a n s f e r l o s s e s i n t h e p r i n c i p a l t r a n s m i s s i o n n e t w o r k s o f t h e W A P P “ Z o n e A ” C o a s t a l S t a t e s . - I m p r o v e d s a t i s f a c t i o n o f p e a k p o w e r d e m a n d t h r o u g h e c o n o m y p o w e r e x c h a n g e s b e t w e e n t h e W A P P “ Z o n e A ” C o a s t a l S t a t e s . P 1 - Q u a n t i t y o f e l e c t r i c i t y t r a d e d ( I m p o r t E x p o r t ) b e t w e e n t h e W A P P “ Z o n e A ” C o a s t a l S t a t e s , d i s a g g r e g a t e d b y p o w e r u t i l i t y P 2 - P e r c e n t r e d u c t i o n o f p o w e r l o s s e s a l o n g t h e p r i n c i p a l t r a n s m i s s i o n i n t e r c o n n e c t i o n l i n k s a m o n g W A P P “ Z o n e A ” C o a s t a l S t a t e s , d i s a g g r e g a t e d b y p o w e r u t i l i t y P 3 - P e r c e n t o f t h e p e a k p o w e r d e m a n d m e t t h r o u g h e c o n o m y p o w e r e x c h a n g e s a l o n g t h e W A P P C o a s t a l T r a n s m i s s i o n B a c k b o n e , d i s a g g r e g a t e d b y p o w e r u t i l i t y - S h o w s t h e c o n t r i b u t i o n o f t h e p r o j e c t t o t h e a c h i e v e m e n t o f W A P P p r o g r a m o b j e c t i v e o f f a c i l i t a t i n g t h e d e v e l o p m e n t o f a u n i f i e d e l e c t r i c i t y m a r k e t a m o n g E C O W A S m e m b e r s t a t e s . - H i g h l e v e l o f p o w e r l o s s e s m a y f l a g p o s s i b l e ( t e c h n i c a l a n d o r o p e r a t i o n a l ) p r o b l e m s i n t h e d e p l o y m e n t o f W A P P C o o p e r a t i o n A g r e e m e n t t o i n t e g r a t e t h e n a t i o n a l p o w e r g r i d s o f E C O W A S m e m b e r s t a t e s . - H i g h l e v e l s s h o w s c o n t r i b u t i o n o f t h e p r o j e c t t o t h e r e a l i z a t i o n o f c o r e p r i n c i p l e e m b o d i e d i n t h e E C O W A S E n e r g y P r o t o c o l - “ o p e n a c c e s s ” t o p o w e r g e n e r a t i o n a s s e t s i n E C O W A S m e m b e r s t a t e s . Page 15 1 5 A N N E X 1 - B : R e s u l t s F r a m e w o r k a n d M o n i t o r i n g A F R I C A : W A P P A P L 1 ( 2 N D P H A S E - C O A S T A L T R A N S M I S S I O N B A C K B O N E ) A r r a n g e m e n t f o r R e s u l t M o n i t o r i n g P h a s e ( r e v i s e d a n d e x t e n d e d ) T a r g e t v a l u e s D a t a C o l l e c t i o n a n d R e p o r t i n g O u t c o m e I n d i c a t o r s U t i l i t y B a s e l i n e 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 F r e q u e n c y D a t a c o l l e c t i o n i n s t r u m e n t s R e s p o n s i b i l i t y P D O i n d i c a t o r s P 1 - Q u a n t i t y o f e l e c t r i c i t y t r a d e d ( I m p o r t E x p o r t ) b e t w e e n t h e W A P P “ Z o n e A ” C o a s t a l S t a t e s , d i s a g g r e g a t e d b y p o w e r u t i l i t y I m p o r t s ( M W ) C I E V R A C E B P H C N E x p o r t s ( M W ) C I E V R A C E B P H C N 0 9 0 1 1 5 0 1 2 5 8 0 0 0 0 9 0 1 3 0 0 1 4 0 8 0 0 0 0 9 0 1 5 0 0 1 5 0 8 0 0 1 0 0 1 7 0 1 6 0 0 2 0 0 8 0 0 5 0 0 1 7 0 1 8 0 0 2 0 0 8 0 0 7 0 0 1 0 0 2 0 0 0 1 5 0 8 0 0 7 0 0 1 0 0 2 2 0 0 1 5 0 8 0 0 7 0 0 2 0 2 4 0 0 7 0 8 0 0 7 0 0 2 0 2 4 0 0 7 0 8 0 0 7 0 B i - a n n u a l ( M a y / N o v ) R e c o r d e d d a t a b y e a c h p o w e r u t i l i t y t r a n s f e r s u b s t a t i o n , a n d s u m m a r i z e d i n t h e u t i l i t y d a t a b a s e ( M I S ) o n a m o n t h l y b a s i s . P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s P 2 - P e r c e n t r e d u c t i o n o f p o w e r l o s s e s a l o n g t h e p r i n c i p a l t r a n s m i s s i o n i n t e r c o n n e c t i o n l i n k s a m o n g W A P P “ Z o n e A ” C o a s t a l S t a t e s , d i s a g g r e g a t e d b y p o w e r u t i l i t y C I E V R A C E B P H C N 4 % 4 % 6 % 8 % 1 % 1 % 3 % 1 % 2 % 5 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % B i - a n n u a l ( M a y / N o v ) R e c o r d e d d a t a b y e a c h p o w e r u t i l i t y t r a n s f e r s u b s t a t i o n , a n d s u m m a r i z e d i n t h e u t i l i t y d a t a b a s e ( M I S ) o n a m o n t h l y b a s i s . P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s P 3 - P e r c e n t o f t h e p e a k p o w e r d e m a n d m e t t h r o u g h e c o n o m y p o w e r e x c h a n g e s a l o n g t h e W A P P C o a s t a l T r a n s m i s s i o n B a c k b o n e , d i s a g g r e g a t e d b y p o w e r u t i l i t y C I E V R A C E B P H C N 0 % 7 . 9 % 5 7 . 5 % 0 % 0 % 7 . 2 % 6 0 . 7 % 0 % 0 % 6 . 6 % 6 5 . 2 % 0 % 0 % 1 0 . 1 % 6 4 . 8 % 0 % 0 % 9 . 8 % 6 8 . 4 % 0 % 0 % 6 % 6 9 % 0 % 0 % 3 % 6 9 % 0 % 0 % 1 % 7 0 % 0 % 0 % 1 % 7 0 % 0 % A n n u a l ( N o v . ) P o w e r u t i l i t y i n i t i a l d e m a n d f i g u r e s a n d r e c o r d e d p o w e r u t i l i z a t i o n f i g u r e s P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s C o m p o n e n t I n d i c a t o r s C o m p o n e n t 1 C 1 . l I n c r e a s e d q u a n t i t y o f R e c o r d e d d a t a P o w e r u t i l i t y Page 16 1 6 e l e c t r i c i t y t r a n s f e r r e d b e t w e e n W A P P “ Z o n e A ” C o a s t a l S t a t e s , d i s a g g r e g a t e d b y p o w e r u t i l i t y . ( N e w ) C 1 . 2 Q u a n t i t y o f e l e c t r i c i t y ( M W ) d e l i v e r e d t h r o u g h c o m p l e t e d t r a n s m i s s i o n l i n e a n d s u b s t a t i o n s ( N e w ) C . 1 . 3 R e d u c t i o n i n o u t a g e s d u e t o t h e c o m m i s s i o n i n g o f c o m p l e t e d t r a n s m i s s i o n l i n e a n d s u b s t a t i o n s ( h o u r s / y e a r ) ( N e w ) C 1 . 4 I m p r o v e m e n t o f v o l t a g e b y t h e i n c r e a s e o f t h e r e a c t i v e p o w e r d u e t o t h e c o m m i s s i o n i n g o f t h e t r a n s m i s s i o n l i n e a n d s u b s t a t i o n s ( M V A R ) C I E V R A C E B P H C N C I E V R A C E B P H C N C I E V R A C E B P H C N V R A C E B 1 2 5 1 7 0 1 1 5 0 0 0 0 0 0 0 0 0 0 0 1 5 0 1 5 0 1 0 0 2 0 1 0 5 0 8 0 1 0 5 0 0 0 2 0 7 0 0 0 0 0 0 0 0 0 0 ( 5 0 ) ( 1 0 0 ) 2 0 7 0 5 0 5 0 0 0 0 2 0 0 0 ( 1 0 0 ) ( 1 2 0 ) 2 0 7 0 1 0 0 1 2 0 0 0 0 2 0 0 2 5 ( 1 3 0 ) ( 1 5 0 ) 2 0 7 0 1 3 0 1 5 0 0 7 0 2 3 3 0 5 0 ( 1 3 0 ) ( 1 5 0 ) 2 0 7 0 1 3 0 1 5 0 0 7 0 2 3 3 0 7 0 5 0 A n n u a l ( N o v . ) A n n u a l ( N o v . ) b y e a c h p o w e r u t i l i t y t r a n s f e r s u b s t a t i o n , a n d s u m m a r i z e d i n t h e u t i l i t y d a t a b a s e ( M I S ) o n a m o n t h l y b a s i s . R e c o r d e d d a t a b y e a c h p o w e r u t i l i t y t r a n s f e r s u b s t a t i o n , a n d s u m m a r i z e d i n t h e u t i l i t y d a t a b a s e ( M I S ) o n a m o n t h l y b a s i s r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s C o m p o n e n t 2 C 2 . 1 P e r c e n t r e d u c t i o n i n t h e n u m b e r a n d f r e q u e n c y o f p o w e r o u t a g e s a l o n g t h e C o a s t a l T r a n s m i s s i o n B a c k b o n e , d i s a g g r e g a t e d b y p o w e r u t i l i t y . C 2 . 2 P e r c e n t r e d u c t i o n i n t h e D e t e c t i o n / r e s p o n s e t i m e f o r o p e r a t i o n p r o b l e m s a l o n g t h e C o a s t a l T r a n s m i s s i o n B a c k b o n e , d i s a g g r e g a t e d b y p o w e r u t i l i t y . C I E V R A C E B P H C N C I E V R A C E B P H C N 1 5 1 5 2 0 5 0 2 d a y s 2 d a y s 4 d a y s 5 d a y s 1 % 1 % 3 % 1 % 1 % 1 % 3 % 1 % 2 % 5 % 2 % 2 % 2 % 5 % 2 % 2 % 2 % 5 % 2 % 2 % 2 % 5 % 2 % 2 % 2 % 5 % 2 % 2 % 2 % 5 % 2 % 2 % 2 % 4 % 2 % 2 % 2 % 4 % 2 % 2 % 2 % 4 % 2 % 2 % 2 % 4 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % 2 % A n n u a l ( N o v . ) A n n u a l ( N o v . ) R e c o r d e d d a t a b y e a c h p o w e r u t i l i t y t r a n s f e r s u b s t a t i o n , a n d s u m m a r i z e d i n t h e u t i l i t y d a t a b a s e ( M I S ) o n a m o n t h l y b a s i s P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s P o w e r u t i l i t y r e p o r t d a t a t o t h e W A P P a r e a c o o r d i n a t i o n c e n t e r s a n d W A P P T S O s Page 17 1 7 C o m p o n e n t 3 C 3 . 1 D e p l o y m e n t o f e m e r g e n c y p r e p a r e d n e s s p l a n f o r s t r a t e g i c h y d r o p o w e r s t a t i o n s V R A ( A k o s o m b o a n d K p o n g ) C E B ( N a n g b e t o ) N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e N o t i n p l a c e U n d e r d e v e l o p m e n t U n d e r d e v e l o p m e n t U n d e r d e v e l o p m e n t U n d e r d e v e l o p m e n t D e p l o y e d D e p l o y e d D e p l o y e d D e p l o y e d D e p l o y e d D e p l o y e d A n n u a l ( N o v . ) P o w e r u t i l i t i e s r e p o r t s t o W A P P I C C P o w e r u t i l i t y r e p o r t t o W A P P o r g a n i z a t i o n C o m p o n e n t 4 C 4 . 1 P o w e r S e c t o r M & E d a t a o f t h e E C O W A S m e m b e r s t a t e s c o l l e c t e d , a n a l y z e d , a n d d i s s e m i n a t e d . C 4 . 2 F u l l y i m p l e m e n t e d a n d w e l l f u n c t i o n i n g W A P P C o o p e r a t i o n A g r e e m e n t f o r t h e C o a s t a l T r a n s m i s s i o n B a c k b o n e . 0 % N o t i n p l a c e 7 5 % W A P P O r g a n i z a t i o n a r t i c l e o f a g r e e m e n t a d o p t e d 8 0 % W A P P o p e r a t i o n a l M i t i g a t i o n a n d s e c u r i t y p l a n f o r C T B i n p l a c e 9 0 % 9 0 % 9 0 % W A P P c o o p e r a t i o n a g r e e m e n t i m p l e m e n t e d 9 0 % 1 0 0 % 1 0 0 % B i - a n n u a l ( M a r c h , N o v e m b e r ) A n n u a l ( N o v e m b e r ) W A P P s e c r e t a r i a t r e p o r t s W A P P s e c r e t a r i a t r e p o r t s W A P P O r g a n i z a t i o n W A P P O r g a n i z a t i o n . Page 18 18 ANNEX 2: Extension of Closing Date AFRICA — WAPP APL 2 (SECOND PHASE OF THE COASTAL TRANSMISSION BACKBONE) P094917 Credit No. 4213-GH Restructuring Paper 1. The closing date for SECOND PHASE OF COASTAL TRANSMISSION BACKBONE ( Credit No. 4213-GH) (P094917) will be extended from December 31, 2010 until June 30, 2013. 2. All contracts have been awarded and works have commenced. Project objectives continue to be achievable. 3. Procurement delays accumulated in the initial implementation of the SCADA/EMS contracts. Anomalies were observed in the first stage bidding process, which resulted in a rebidding as directed by the World Bank. Some components of Phase 2 have also been delayed mainly due to a lack of capacity of the project unit in VRA which has been now filled by the recruitment of a consultant now in charge of the bidding process and implementation monitoring. See Table 2 in the main text for revised milestones. 4. This will be the first extension of the project. Page 19 19 ANNEX 3 Financial Management Supervision Report Key Information on the Project Project Name: West Africa Power Pool (WAPP) Project ID: P075994 & P094917 IDA Credit/Grant No.: IDA Credit 40920 and 42130 Implementing Agency: Ghana Grid Company Ltd (GRIDCo) Effectiveness Date: Nov 1, 2005 Closing Date: December 31, 2010 & June 30, 2011 Application Deadline: June 30, 2011 Credit/Grant Amount: SDR 26,500,000 & SDR 40,900,000 Program Duration 7years (IDA 40920) & 3years (IDA 42130) Remaining Period to Closing 1yr for IDA 40920 & 5months for IDA 42130 Disbursed Amount: US$18m (IDA 40920), US$12.9m (IDA 42130) Cancelled Amount US$0 Period Covered by Review: June 2009 – July 2010 Previous ISR Rating for FM: Satisfactory Current ISR Rating: Satisfactory Previous FM Risk Rating: Moderate Current FM Risk Rating: Moderate EXECUTIVE SUMMARY 1. The FM team carried out a follow up review of the financial management arrangements of the Ghana Grid Company Ltd (GRIDCo) to ascertain the extent to which transitional arrangements covering the separation of GRIDCo from the VRA and with it the transfer of the project to GRIDCo had been completed. It was also to assess the adequacy of the FM arrangements to support project implementation and follow up on issues raised during the May 2009 detailed review. Following the review, the team confirms that transition arrangements are fully completed and the independent company GRIDCo is fully functional at this stage. The team concludes that the existing FM arrangements at GRIDCo are adequate and meet the minimum requirement for financial management under OP/BP 10.02. Key Issues 2. Formal Transfer of Credit to GRIDCo - Awaiting Bank action: The separation of GRIDCo from VRA is now complete. GRIDCo presented its own audited financial statements for FY 2009 and the unaudited financial statement for the first half of 2010 is also available. It has a full staff strength of six hundred and eighty two (682) of which thirty four (34) work in different units within the accounting and finance Page 20 20 department. While project management is now under GRIDCo and project FM staff are either full time GRIDCo staff or VRA staff on secondment to GRIDCo, the company is awaiting a formal transfer of the credit from VRA to GRIDCo to enable it assume full ownership and management of the project. Status of Key issues raised in May 2009 Review: 3. Issues raised during the last review centered around the need for transition arrangements to proceed smoothly and for the separation of GRIDCo from VRA to be completed on time. It also mentioned the need for the new entity to quickly develop procurement and contract management capacity to ensure timely completion of the project. The current review shows that the two companies are now independent of each other. Procurement capacity has also been enhanced and so has contract management. GRIDCo ’s financial viability is now assured following the recent tariff adjustments and arrangements put in place by the company and the PURC to revise the basis on which Transmission Loss (which stood at 26% of 2009 Transmission income) is computed. 4. Project Financial Management still under VRA: Project Finance unit is currently under VRA, although staff on the project are either full time GRIDCo staff or staff on secondment to it. Supervision and Guidance by senior FM staff within GRIDCo is thus removed from the core project FM staff. This is expected to be revised once the project is formally transferred to GRIDCo. 5. Need for extension of Closing Date: IDA Credit # 42130 is currently set to close in December 2010. With current disbursement at 27%, it may be necessary to consider an extension of the closing date to allow enough time for the PDOs of the credit to be achieved. 6. ISR FM Rating The project’s overall FM performance has been Satisfactory (S). FM Risk Rating 7. FM risk rating is assessed as Moderate (M). This is unchanged from our earlier rating dated May 2009. FM REVIEW: FINDINGS AND ACTION PLAN 8. Budgeting: GRIDCo has adopted VRA’s Financial Accounting Manual (FAM) which includes the budgeting process. The guidelines for budgeting is issued under the annual” Planning Letter” signed by the Chief Executive in consultation with the Director of Finance. This forms the basis of budgeting for both recurrent and capital investment. A review of the FAM indicates that the budgeting processes are adequate and the WAPP project will follow the same guidelines using the allocated credit as a basis for budgeting and preparing procurement plans. GRIDCo already has in place a five year strategic plan and corporate budget outlining key priority sectors and funding requirements. This Page 21 21 document includes capital investment programme and cost estimates for WAPP. The Finance Director and his team were advised to closely monitor project actual expenditures verses credit allocation and periodic budget to ensure that project implementation stays within the allotted timeline. 9. Accounting: The Finance unit of GRIDCo is a thirty four man department covering all key functions including procurement. The Director of finance heads the unit and is a qualified Chartered Accountant with the relevant qualification and experience having worked at senior finance position within VRA for over ten years. The unit has adopted the FAM. It has secured licenses of the accounting software Axs One for its own use and is in the process of acquiring a server for storing its data which is currently on a separate platform but hosted on the same server with VRA. The project is handled by the Project Finance unit within VRA’s facility and manned by two Finance Staff, one of whom is a chartered accountant supported by another with first degree in finance with engineering background. 10. Internal Controls: Internal Controls are in existence and working effectively . GRIDCo has a six man internal audit department (IAD) headed by a qualified accountant who was part of the VRA Internal Audit department. The IAD has adapted the existing internal audit manual from VRA to guide it internal audit processes. The Internal audit unit conducts periodic reviews according to an annual plan and presents quarterly reports to the Board. The company has established guidelines on financial approval limits for all positions of managerial grades and above within the firm. This document indicates the approval and authorization limits for activity initiation and control of expenditure 11. Funds Flow & Disbursements: The project is funded by four different financiers (IDA, Kuwait Fund, European Investment Bank (EIB), African Development Bank (AFD) and the Government of Ghana. Under WAPP I, IDA approved an amount of SDR26, 500,000 which became effective in November, 2005 whilst WAPP II was approved in January 2008 in the sum of SDR 30,800,000. 12. The first credit IDA 40920 closes in June 2011 whilst the second credit IDA 42130 closes in December 2010. Disbursements as of July 2010 stood at 44% (IDA 40920) and 27% (IDA 42130). As indicated above, it may be necessary to consider extending the closing date for IDA 42130 given the current rate of disbursements. 13. Financial Reporting: GRIDCo was incorporated in 2006. Its audited Financial Statements for 2009 is ready and shows significant improvement over that of 2008. At the time of the visit, its half year report for 2010 was ready and had been presented to management. The Financial statements are prepared in compliance with IFRS. Specifically on WAPP, the client submits the Project Quarterly Report which contains a section on financial performance. The challenge under WAPP has been in the submission of regular quarterly financial reports in line with the financial covenants; this has been discussed with the Dir of Finance. Page 22 22 14. External Audit: The audited financial statements of GRIDCo for the year 2009 has been completed and a copy submitted to the Bank. The financials show a significant improvement over that of 2008 (restated), with loss per share reducing from 1.75 pesewas to 0.69 pesewas. GRIDCo is audited by Messrs Deloitte and Touche. Project audit is conducted by the State Enterprises Audit Corporation (SEAC). The auditors are expected to be retained over the remaining life of the project. A review of the management letter did not highlight any major internal control or compliance issues. 15. Transactions (including SOE/interim report) Reviews: No SOEs were reviewed during this current visit. 16. GAC – Fraud and Corruption: No Fraud and Corruption issues were noted during the review. 17. Other matters. None other than noted above. FM Action Plan Issue Agreed action Responsible person Due Date Need for Formal Transfer of Credit to GRIDCo Giving VRA’s preparedness to cede the credit to GRIDCo and the completion of arrangements of transition arrangements regarding the separation of the two companies, GRIDCo is now awaiting action on the part of the Bank to ensure a formal transfer of the credit to it. MOFEP and Bank (TTL) Need for GRIDCo senior FM team to assume ownership of Project FM and give needed direction to sustain timely compliance with financial covenants, especially submission of IFRs GRIDCo senior FM team agrees with the recommendation and is beginning to keep track of the project’s FM, now that staff on the project are GRIDCo staff or are on secondment to it. Will undertake full coordination once credit is formally transferred FD, GRIDCo Page 23 23 Appendix: Updated FM Risk Assessment Residual Risk Rating Type of Risk Previous Current Brief Explanation of Changes and any New Mitigation Measures INHERENT RISK Country Level Moderate Moderate Entity Level Moderate Moderate Program Level Moderate Moderate OVERALL INHERENT RISK Moderate Moderate CONTROL RISK Budgeting Moderate Moderate Accounting Moderate Moderate Internal controls Moderate Moderate Funds Flow Moderate Moderate Financial Reporting Moderate Moderate Auditing Moderate Moderate OVERALL CONTROL RISK Moderate Moderate Page 24 24 ANNEX 4 Procurement Capacity Assessment of GRIDCO West African Power Pool Project I & II (P075994 & P094917) IDA GH 4092 & GH 4213 Revised Report July 27, 2010 1.0 Introduction 1. The Volta River Authority (VRA) has been the Agency implementing the Ghana Component of the West African Power Pool Project I and II since they became effective in November 2005 and January 2008 respectively. The project implementation was initially mainstreamed into VRA’s normal activities and using their personnel, who are well qualified to provide input. A project management unit was however created during the last mission when it was realized that implementation was delaying due to the fact that combining their already heavy schedules with specific actions to be taken to move the project forward was becoming a problem for top management. This unit consists of a number experts made up of a Project Director, Financial Management experts, Engineers and Procurement experts who are full staff of VRA but fully dedicated and directly responsible for the project implementation of WAPP. Since then, physical progress of the project has been proceeding at a higher pace. 2. In December 2006, the Government of Ghana established the Ghana Grid Company Limited (GRIDCo) through an amendment of the Volta River Authority Development (Amendment) Act, 2005 Act 692, which provides the separation of the transmission functions from the other activities of the Volta River Authority. The hitherto transmission system department staff of the VRA were then transferred to GRIDCo on July 15, 2008 and additional staff from other department transferred to support GRIDCo’s business on August 15, 2008. The final transfer of other staff from VRA to fully complement GRIDCo’s human resource needs has now been completed. 3. In ensuring that there is a smooth transition of transferring all transmission functions including ongoing projects to GRIDCo in manner not to cause any disruptions and confusion, there was an agreement that (i) all projects for which bids are yet to be called be transferred to GRIDCo (ii) VRA will continue to manage projects due for commissioning following which they will be formally handed over to GRIDCo (iii) GRIDCo will take over WAA Project and associated staff once the World Bank and other donor partners have finalized the covenants to transfer all transmission related projects to GRIDCo. 4. In the light of the above, VRA has formally requested IDA to transfer the WAPP credits to GRIDCo. To enable the Bank to make an informed decision a procurement capacity review has been conducted at GRIDCo. The review covered areas such as the organization and procurement functions in the light of the Ghana Procurement Act, 2003, Page 25 25 Act 663, procurement cycle management, support and control systems, staffing and general risk. The mission met and had discussions with the Managing Director, the Director of Finance, the Procurement Manager, The Company Lawyer, and the Acting Director of Engineering among other procurement staff of GRIDCo. 2.0 Organization and Procurement Function 5. GRIDCo is an autonomous state company established by the government of Ghana through the Amendment of Volta River Authority Development (Amendment) Act, 2005 Act 692, and is therefore subject to the national laws of Ghana. Its procurement rules respond to the Public Procurement Law of Ghana, which was enacted in 2003, and provides legal framework for the conduct of transparent and comprehensive procurement. The Act provides for the compilation and publication of code of conduct, which shall apply to every official of a procurement entity, the Board, members of Tender Review Boards, as well as suppliers, contractors and consultants. It further, provides for entity and administrative reviews, statutory audits, corrupt practices and investigations by the Public Procurement Board 6. The organ gram clearly shows that the procurement department is under the Finance Directorate and headed by a procurement manager and has four main units. The Company Lawyer provides legal support to the department as and when needed and technical input to procurement are mainly provided by the Engineering Directorate, which has very experienced engineers previous working with the VRA. The department coordinates all procurement, including undertaking procurement planning of works, goods and services with support from the user departments and other technical experts within the company and managing bidding and selection processes, including preparing bidding documents or Requests for Proposals, advertising for bids or issuing proposals, receiving bids or proposals, opening bids or proposals, evaluating bids or proposals, making recommendations for awards, contracting and managing. The procurement department staffs are held in high esteem and are, by law, given space to work under the Act. 7. In response to the Ghana PPA 663, GRIDCO as a procurement entity has set up completely the required structures, i.e. fully staffed procurement unit, entity tender committee and tender review committees that are required by law. The entity tender committee and tender review board are now in place and functioning. GRIDCo has prepared a comprehensive procurement procedure manual to detail out its procurement and supply management functions which complements the procurement manual prepared by the Public Procurement Authority. The manual lays out the legal framework for undertaking procurement; processes and procedures of procurement cycle management; technical and administrative for reviews for quality control; approval processes, authority and thresholds; appeal mechanisms; warehousing and stores management; and contract management responsibilities. For procurement beyond the threshold of the entity tender committee as set out in the procurement law, the organization seeks approval from the Ministry of Energy’s Tender Review Board or Central Tender Review Board, based on the value. Page 26 26 3.0 Staffing 8. Currently, the Procurement Department staff is headed by Mr. Benjamin Effah, who has a Bachelor’s Degree in Administration, a Master Degree in Project Management and a member of Chartered Institute of Purchasing and Supply, United Kingdom. He was the procurement manager with VRA from 2004 until he was transferred to GRIDCo in 2008. He has attended a lot of training programs in World Bank Procurement Procedures in Ghana and at Crown Agents in the United Kingdom. He also has in-depth knowledge of the Ghana Procurement law. Apart from the procurement manager, the department also boost of two very experienced procurement officers, one with a degree in Electrical Engineering and in charge of technical, and the other with professional qualification in Purchasing and Supply handling non-technical procurement. They both have worked with the VRA in the same positions for 8 years and handled both World Bank funded procurement and procurement funded by government. 9. Apart from these three procurement experts, the procurement department is also assisted by a Shipping Officer and a Stores and Warehouse Assistant. The organization is in the meantime in the process of recruiting two additional Procurement Assistants to support the activities of the Entity Tender Committee secretariat and non-technical procurement. 10. In addition to the core procurement staff, GRIDCo has a pool of technical staff with knowledge and training in procurement and who give support to the procurement department to conduct evaluation of bids and proposals as and when needed. These evaluation panels are appointed on ad hoc basis for each evaluation and depending on the nature of procurement. For example, the present Director of Power Network Operations served as a procurement Director in the VRA in 2002 and 2003 and has experience in management of procurement for goods and services. He has led several procurement evaluation panels to successfully complete tender evaluations in timely manner. The Head of the Legal Unit and Board Secretary is very conversant with World Bank Procurement policies and procedures and has participated in the evaluation and negotiation of several World Bank funded projects including the WAPP. There are several of such technical experts with knowledge in procurement who help in evaluation of bids and proposals. 4.0 Support and Internal Control Systems 11. Procurement carried by GRIDCo each year are derived from their annual work plan and budget as such the procurement planning are closely linked to multiyear plans from which annual operating plans are derived and based on which annual procurement plans and estimation of associated cost, cumulating in annual budgets are formulation. The mission was informed that the largest spending department, the engineering department has staff who help in procurement planning and scheduling of annual procurement activities of the department using specialized software to ensure that multiple inter-related procurement on large contracts are well coordinated. Page 27 27 12. GRIDCo, as per the Public Procurement Law, is expected to establish tender committee and tender review board before carrying out any procurement. All procurement activities are expected to be approved by the tender committee or the tender review board depending on the threshold of the amount involved. The committees are expected to review all contracts to ensure that at every stage of the procurement activity, prescribed procedures and rules have been followed before final approvals are given for contracts to be entered into. 13. The company has adapted and uses the existing policies and internal audit arrangements from VRA to guide its internal audit processes. All procurement processes are checked by internal auditors to ensure efficient and effective use of resources. The internal audit department is headed by a qualified accountant who has previously worked with VRA until the transfer and has considerable experience. The company has also developed detailed guidelines on financial approval thresholds, which clearly outlines the approval and theorization limits for the various categories of procurement. External procurement audits are however, carried out by the Public Procurement Authority or as prescribed in the various financing agreements of donor agencies. 14. The mission was also informed that the company is in the process of preparing code of ethics for employees in general and also to put a mechanism in place to make it easy for bidders to report misconduct of employee to the company’s Board of Directors. 5.0 Contract Administration 15. The mission was informed that the procurement department of GRIDCo has the overall responsibility for contract management in respect of all goods and non- engineering works and services. However, in respect of engineering works and specialized services, such contract management is undertaken by the designated or user department such as engineering, Real Estate and Legal Department, in conjunction with the Procurement Department, and for each contract, a contract manager or administrator is designated. It is the responsibility of the contract manager or administrator so appointed to ensure successful performance of the contract within approved cost, delivered or completed within the agreed time and at the required specifications. 6.0 Conclusions 16. From the above assessment, it is observed that GRIDCo has since its establishment set up all the necessary structures for the conduct of procurement as prescribed by the Public Procurement Law. It also has a full complement of key procurement and technical staff who are also proficient in World Bank Procurement procedures as well as the National Procurement procedures. It is also noted that structure for approval and oversight like the tender committee and tender review board are in place and functioning. Page 28 28 7.0 Recommendation 17. It is recommended that since GRIDCo now has all the legal and operation procurement structures in place and has adequately staffed procurement department with good knowledge in World Bank as well as the National Procurement procedures, the WAPP project unit can now be officially transferred and integrated into GRIDCo. wb10286 / P:\GHANA\WUE\CR4356GH\Other\WAPP-II-Final-Rest-Paper-Ghana-Dec-20-2010.doc / 12/20/2010 7:29:00 PM