General News of Thursday, 15 August 2019
The Chairman of the Coalition of Stakeholders on Electricity Contracts and Arrangements (COCECA), Dr Steve Manteaw, has cautioned the government to be careful in its handling of the Power Distribution Services (PDS) Ghana Limited saga.
According to him, even if the allegation of fraud was proven against PDS, the government of Ghana alone cannot take unilateral actions against the company.
He explained that if the government wanted to repair the breaches the company had committed in the concession agreement, the government could only nullify the local content component of the agreement.
Dr Manteaw was speaking at a public engagement forum in Accra on Wednesday, August 14, 2019, organised by COCECA to throw more light on the happenings in the PDS concession agreement and its related issues.
The government through the Ministry of Finance and the Electricity Company of Ghana (ECG) Limited suspended the concession agreement with PDS Ghana Limited on Tuesday, July 30, 2019.
The suspension followed the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which was discovered upon further due diligence.
The Demand Guarantees were key prerequisites for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire.
The convener of the forum, Mr Richard Nyamah, called for the stepping aside of the Chief Executive Officer of the Millennium Development Authority (MiDA), since according to him, the MiDA boss did not do his work well in the whole concession agreement.
According to him, MiDA wrote letters purporting to come from stakeholders in the energy sector such as the Public Utilities Regulatory Commission and Energy Commission to the IFC to have its consent in selecting a concessionaire for the ECG.
He was of the view that MiDA had used fraudulent means to get stakeholders to do its bidding.
A member of the group, Mr Kofi Bentsil, noted that since the contract was an international one, the government ought to be circumspect in its decision, particularly regarding the suspension of PDS.
According to him, there was nothing like a suspension in the concession agreement and that in the event things did not go well with the state, the country stands to lose a lot.
“The suspension exposes Ghana to legal jeopardy,” Mr Bentsil said, pointing out that if PDS had breached the Condition Subsequent, then the government of Ghana had grounds to cancel the concession agreement.
He explained the government of Ghana entered the concession agreement to get competent managers of the country’s electricity as well as to get financial infusions.
That, he said, if PDS was to be retained, then the government of Ghana must ensure that it met all the conditions specified in the concession agreement.