…Terminates PDS Concession
Government has announced the termination of the Electricity Company of Ghana (ECG) concession agreement with the Power Distribution Services (PDS).
In a statement dated Friday, October 18, 2019, government said the current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents.
According
to the statement, the decision was taken at a meeting in the US on Friday,
October 18, 2019 with the Secretary to President Akufo-Addo, Nana Bediatuo
Asante and officials of the Millenium Challenge Compact.
The statement, signed by the Finance Minister, Ken Ofori Atta, said the
government would make every effort to ensure that a suitable replacement for
PDS is found within the relevant timelines to ensure that government completes
the Compact.
“Every effort would be employed to
ensure a suitable replacement within the relevant timelines in order to
complete the Compact,” the statement said.
The concession agreement was initially suspended on July 30, 2019 due to what
government considered to be “fundamental
and material breaches”.
Details of the alleged breach revealed that PDS’ guarantee was irregular and
fraudulently procured.
Despite criticisms over the development, government rejected the accusations
that it was negligent in the exercise of its duty to thoroughly scrutinize
documents presented by PDS before the final agreement was signed.
Government however says it remains committed to seeing private sector participation in the country’s energy sector, stressing that “indeed, government intends to see this PSP through in a manner that respects due process and fidelity to the relevant transaction documents and underlying Compact”.
The latest revelations regarding the PDS deal have exposed the lies thrown out by the opposition National Democratic Congress (NDC) that elements within government had interest in the Power Distribution Services concession agreement.
The
NDC recently claimed that it had intercepted a fresh document on the PDS deal “which exposes the clandestine efforts of
the Akufo-Addo government to appropriate the assets of ECG for themselves.”
According to the party, the intercepted letter showed that “the Akufo-Addo government has been
secretly restructuring the shareholding of PDS on the blind side of Ghanaians
in furtherance of their state-capture agenda.”
Industry players, however, argued that it would be strange for government
to terminate the deal if it had appropriated the concession to itself like the
NDC wanted Ghanaians to believe.
One expert told this paper that there was no way government would have terminated the concession agreement if it had interest in the deal, saying the concessionaires wanted to pull a fast one on Ghanaians.
The expert, who wanted to remain anonymous commended government for being meticulous on the whole ECG-PDS saga and for reaching the current position.
He said there is clear justification for the discontinuation of the current concession which does not in any way diminish government’s commitment to private sector participation in Ghana’s energy sector.
He urged government to execute the principles and action steps to move forward on the Ghana Power Compact by the midnight of the 18th October.
