This means that the PDS will no longer distribute electricity in the southern sector of the country as it used to do.
Government of Ghana terminates contract with the country’s power distribution service over deception, here’s the new takeover
The Government of Ghana has terminated the Concession Agreement it had with the Power Distribution Services (PDS) Limited over the take-over of the assets of the Electricity Company of Ghana (ECG).
The Minister of Finance, Ken Ofori-Atta said this in a statement issued in Accra
According to him, the move was necessitated by a forensic audit conducted by the Millennium Challenge Corporation (MCC) and Government of Ghana's investigations into the issuance of Demand Guarantees for the Concession Transaction, which revealed that the Payment Security for the Transaction was invalid.
The investigations re-affirmed the earlier report that there was no approval by Competent Signatories to the Demand Guarantees issued by Al-Koot in Qatar, therefore, the Transaction lacked the required authorisation and approval of the Company.
More so Al-Koot has an underwriting policy and guidelines which required the approval of the Central Bank of Qatar, but no such approval was granted by the Central Bank of Qatar.
In view of that, President Nana Akufo-Addo and Chief Executive Officer of the MCC, Mr Caircross agreed that the existing Concession between PDS and ECG, which involved the transfer of the latter's assets worth three billion dollars should be discontinued, while a suitable replacement was sought before December 31, 2019.
Mr Ofori Atta, hence, note that the Government of Ghana remained strongly committed to the Ghana Power Compact and the Private Sector Participation (PSP) of the country's energy sector.
“We also wish to reiterate the position communicated to the CEO of the MCC by the President of Ghana during their meeting on the sidelines of the United Nations General Assembly in New York on September 23rd to the effect that, 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,” he said.
Adding that, "However, every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the Compact."
The Minister further said the Government's decision to terminate the PDS Concessions was based on two key points, thus the meeting between the CEO of MCC and President Akufo-Addo on September 23, in New York, USA, produced an understanding that the existing concession would be discontinued and a concession restoration and restructuring plan would be executed within existing timelines before December 31, 2019.
Secondly, the facts uncovered by the forensic audit justified the discontinuation of the current concession, but should not diminish the Government's commitment to private sector participation in the energy sector.
Investigations also revealed that the local shareholders of the PDS concession funded the US$11.5 million of the US$12.5 million payments it made to procure the Demand Guarantees using funds taken from operating accounts.
The statement further stated that the actual details of the purported insurance cover for the Transaction furnished by PDS showed gross deception and unprofessional conduct on the part of PDS.
Therefore, the termination of the Transaction Agreement between ECG and PDS was carried out in accordance with Article 2.6 and 5.1 of the Programme Implementation. Agreement (PIA).
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: