{"id":729598,"date":"2019-10-23T12:28:05","date_gmt":"2019-10-23T12:28:05","guid":{"rendered":"https:\/\/ghana-mma.com\/2019\/10\/23\/us-fights-for-pds-190m-in-limbo\/"},"modified":"2019-10-23T12:28:05","modified_gmt":"2019-10-23T12:28:05","slug":"us-fights-for-pds-190m-in-limbo","status":"publish","type":"post","link":"https:\/\/www.ghanamma.com\/2019\/10\/23\/us-fights-for-pds-190m-in-limbo\/","title":{"rendered":"US Fights For PDS $190m In Limbo"},"content":{"rendered":"

<\/p>\n

Sean Cairncross – CEO, MCC<\/strong><\/p>\n

Barely 48 hours after the government\u2019s
\ntermination of the Power Distribution Services (PDS) concession arrangement,
\nthe Millennium Challenge Corporation (MCC) has reportedly directed a
\nrestoration of the status quo.<\/p>\n

The directive was contained in an
\nOctober 18, 2019 correspondence from the Principal Deputy Vice-President,
\nDepartment of the Compact Operations of the MCC, Kyeh Kim. <\/p>\n

The development has opened a fresh
\nchapter in a corporate governance imbroglio that has plagued the transfer of
\nthe assets of Electricity Company of Ghana (ECG) to PDS and the distribution of
\npower by the latter in the country. <\/p>\n

The request of the MCC, overseers
\nof the deal, through the Finance Minister, Ken Ofori-Atta, is that the termination
\nof the arrangement be nullified.<\/p>\n

Who
\nBlinks First?<\/strong><\/p>\n

With both parties \u2014 Government of Ghana and
\nthe MCC each carrying their baggage and digging in \u2014 it is
\ndifficult to determine who blinks first.<\/p>\n

DAILY GUIDE<\/em><\/strong> is
\ngetting signals that the MCC request is likely to hit a snag since the government
\nhas resolved to stick to the original plan to restructure the whole concession.<\/p>\n

New
\nArrangement<\/strong><\/p>\n

The Finance Minister has already
\ndrawn a roadmap including a tender process to replace PDS, a restricted
\narrangement which the minister noted \u201cshall be undertaken timeously by
\nfast-tracking some of the processes without compromising the integrity and
\ntransparency of the procurement process.\u201d<\/p>\n

Revocation
\nImplications<\/strong><\/p>\n

The implication of the revocation
\nof the termination is surely going to prompt the pertinent question about whether
\nor not government must ignore the opportunity cost of the termination.<\/p>\n

Not obliging the demand of the MCC
\ncould deny Ghana a whopping amount of $190 million of the compact money which
\nby the arrangement is meant to enhance the operations and distribution of power
\nin the country. <\/p>\n

Far-reaching
\nDemands<\/strong><\/p>\n

The far-reaching demands of the
\nMCC, as contained in the correspondence to the Finance Minister referred to as
\nGovernment of Ghana milestone, are \u201cthe reinstatement of PDS\u2019 concession rights
\nunder the Transaction Agreements, lifting of the suspension of the Lease and
\nAssignment Agreement (LAA), Bulk Supply Agreement (BSA) and the Government
\nSupport Agreement (GSA).\u201d<\/p>\n

The MCC further directed that the government
\ncause the Energy Commission to lift the suspension of PDS Retail Supply licence.<\/p>\n

On the part of the MCC, it will release
\nto MIDA the Tranche II Funding and permit such funding to be committed to
\napprove contracts under the Compact Multi-Year Financial Plan. <\/p>\n

Finally, the MCC will authorize
\nthe resumption of activities towards the development of a regional compact
\ninvolving Ghana.<\/p>\n

Genesis<\/strong><\/p>\n

The MCC\u2019s reaction comes on the
\nheels of a government announcement about its termination of the concession agreement
\nbetween it and the PDS.<\/p>\n

A
\nletter from the Finance Minister which spelt out government position and the factors which informed the decision went viral soon after
\nit was issued and addressed to Sean Cairncross, the Executive Officer of the MCC
\nin Washington DC, United States.<\/p>\n

Key Meeting<\/strong><\/p>\n

The
\nFinance Minister in his correspondence alluded to an earlier meeting between
\nthe \u201cSecretary to the President, Nana Bediatuo Asante, and I, on the
\none hand and the Principal Vice-President of the MCC, Kyeh Kim, and the
\nResident Country Director-Ghana of MCC, Kenneth Miller on the other hand held
\nin Washington DC on Friday, October 18, 2019.\u201d<\/p>\n

Implementation Plan <\/strong><\/p>\n

The implementation plan from the MCC in Washington, the
\nminister observed, was deficient failing to contain the substance of what was
\nagreed upon in the New York meeting.<\/p>\n

So Many Issues<\/strong><\/p>\n

So
\nmany issues have been raised about this subject but the most contentious are
\nthose advanced by the opposition National Democratic Congress (NDC) members,
\nwho think the concession which was started during their tenure is fraught with
\nimproprieties, the ratio of shares to the various parties particularly standing
\nas the thorniest footnote. <\/p>\n

No Proof<\/strong><\/p>\n

The President has suffered a continuous barrage of attacks by
\nopposition elements as a man who could be benefitting monetarily from the
\nconcession, without convincing proof. <\/p>\n

Irony <\/strong><\/p>\n

Now
\nthat government is seeking to terminate the deal, it is ironic that the same
\nelements attacking the government do not find it necessary to support the
\nefforts if indeed they actually find something wrong with the state of affairs
\nas they stand today.<\/p>\n

Untenable <\/strong><\/p>\n

The
\ntransaction, according to the minister\u2019s letter, \u201chas become untenable\u201d adding that the government of the
\nUnited States of America  should be
\nconcerned about the lack of security for a transaction involving the commitment
\nof funds. Government, he said, \u201cintends to see this process through in a manner
\nthat follows due process and protects the interests of all parties.\u201d<\/p>\n

Short Journey<\/strong><\/p>\n

The journey started in March this year with the ECG letting
\ngo its traditional role of power supply to the PDS as per the arrangement after
\nthe private sector participation was introduced by then Mahama-led National
\nDemocratic Congress (NDC) government to enable it to access cash from the MCA
\naccount set up by the US government.<\/p>\n

When the reality of the deal dawned on many Ghanaians as the
\nECG took a backstage, they began to question the integrity of the arrangement
\nand wished a reversal would be a better option but for the legalities entailed
\nin the contract. <\/p>\n

ECG Privatization<\/strong><\/p>\n

In August 2014, Ghana and United States of America \u2013 acting
\nthrough the MCC \u2013 entered into a Millennium Challenge Compact.<\/p>\n

The Compact provided for a grant of up to US$498,200,000 to
\nadvance economic growth and reduce poverty in Ghana, and commits Ghana and the
\nMCC to a five-year economic development programme that would fund investments
\nin the country\u2019s power sector and as part of the deal, the government agreed to
\nput ECG in private hands to be supervised by the Millennium Development
\nAuthority (MiDA).<\/p>\n

Per the Mahama-led initial agreement, the concessionaire was
\nto hold 80% stake and manage ECG for 25 years, while the Ghanaian ownership was
\nto hold the remaining 20% stake.<\/p>\n

However, President Akufo-Addo, upon assumption of office and
\nthrough the then Energy Minister Boakye Agyarko, got the US government to
\nreview the terms where the Ghanaian ownership now stands at 51% share with the
\nforeign investor taking the remaining 49%.<\/p>\n

The Ghanaian local consortia holding the 51% of the shares
\nin PDS include TG Energy Solutions Limited (TG), with 18%; Santa Baron Ventures
\nLimited (Santa), with 13%; as well as GTS Engineering Services Limited (GTS)
\nand TBK Ghana Limited (TBK), with 10% each.<\/p>\n

The remaining 49% are for Pilipino consortia (foreigners) including Manila Electric Company Limited (Meralco), with 30% shares and Aenergia, an Angolan company, with 19% shares.<\/p>\n

By A.R. Gomda<\/strong><\/p>\n

The post US Fights For PDS $190m In Limbo appeared first on .<\/p>\n","protected":false},"excerpt":{"rendered":"

Sean Cairncross – CEO, MCC Barely 48 hours after the government\u2019s termination of the Power Distribution Services (PDS) concession arrangement, the Millennium Challenge Corporation (MCC) has reportedly directed a restoration of the status quo. The directive was contained in an October 18, 2019 correspondence from the Principal Deputy Vice-President, Department of the Compact Operations of […]<\/p>\n","protected":false},"author":1,"featured_media":729599,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-729598","post","type-post","status-publish","format-standard","has-post-thumbnail","category-politics"],"yoast_head":"\nUS Fights For PDS $190m In Limbo - Ghanamma.com<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ghanamma.com\/2019\/10\/23\/us-fights-for-pds-190m-in-limbo\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"US Fights For PDS $190m In Limbo - Ghanamma.com\" \/>\n<meta name=\"twitter:description\" content=\"Sean Cairncross – CEO, MCC Barely 48 hours after the government\u2019s termination of the Power Distribution Services (PDS) concession arrangement, the Millennium Challenge Corporation (MCC) has reportedly directed a restoration of the status quo. 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