The Electricity Company of Ghana (ECG) has been given the mandate to
reclaim its role as the power distributor in the southern part of the country,
following the suspension of the Concession Agreement signed
between the ECG and the Power Distribution Services (PDS) Ghana Limited.
The concession agreement, which came into force on March 1, 2019, under the
guidance of the Millennium Development Authority (MiDA) Ghana, to allow the PDS
to run the assets for a period of 20 years.
It was expected that the PDS will manage and operate the assets of the ECG, while
the ECG was given the license to operate as a bulk energy trader.
The Ghanaian Government has announced the suspension, following security issues
raised by the PDS before taking over the operational assets of the ECG.
In a statement by the Information Ministry and signed by Kojo Oppong Nkrumah,
Minister of information on Tuesday said: “The Government of Ghana through the
Ministry of Finance and the Electricity Company of Ghana (ECG) Ltd. has suspended
the concession agreement with the Power Distribution Services (PDS) Ghana Limited
with immediate effect.”
“The decision follows the detection of fundamental and material breaches of the PDS’
obligation in the provision of Payment Securities (Demand Guarantees) for the
transaction, which have been 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 government is conducting a full scale enquiry into the matter, and the outcome
will inform the next course of action. The government has taken steps to ensure
distribution, billing and payment services continued. The General Public and
Customers are assured that this development will not interfere with the distribution
of electricity services,” the statement said.
Reacting to the suspension, the Power Distribution Services on Wednesday,
stated that “PDS has taken note of the statement issued by the Government of
Ghana through the Ministry of Information (MoI) and Ministry of Finance (MoF),
acting on behalf of Government of Ghana (GoG) and the Electricity Company of
Ghana (ECG).”
“PDS wishes to state for the record that it has always acted and will continue to act
in good faith at all times. The PDS will go through due process by complying with the terms of the Transaction
Agreements executed between it and ECG on one hand and the GoG through
The MoF on the other hand,” said in a statement signed by its Chief Executive
Officer.
It therefore assured Ghanaians that it will not rush to put out any information until
it has been sufficiently substantiated in the interest of safeguarding the transaction
and the image of Ghana.
However, the development has attracted diverse views from the public on the
suspension of the concession agreement based on the detection of anomalies
in the documentation supporting the concession.
The Minority Member of Parliament, who is the Ranking Member of Mines and
Energy Committee, Adams Mutawakilu, said it cautioned the government against
rushing into the agreement, but it refused to listen, thereby saying his side has been
vindicated. He, however, lamented the waste of time and resources on the part of
the government.
But the Majority Member of Parliament for Adansi in the Ashanti Region, Mr. Kobina
Tahiru Mohammed, said the decision by the government was a step in the right
direction. He is of the opinion that the suspension should be sustained as the
premise for which the agreement was signed was fraudulent.
The General Secretary of the Public Utility Worker Union (PUWU), Mr. Michael
Adumatta Nyantakyi, said the union was not surprised at the suspension of the
Power Distribution Services‘ concession agreement. According to him, various
stakeholders failed to do due diligence before PDS took over from ECG.
He told Citi Fm on Thursday that, “For us, it also came as a surprise because we
least expected it, but on the other hand, we were not very surprised because looking
at the way this whole transaction was carried out through, some of us were very
certain along the line that some of these developments could come up. So it is not
very strange that we are hearing some of these things.”
It will be recalled that the Concession Agreement, which was started in 2014 by
Parliament under the erstwhile National Democratic Congress (NDC) administration,
was opposed by the staff of the ECG. The workers through the PUWU staged
series of protests against the concession, which was promoted by the MiDA, through
the Millennium Challenge Corporation (MCC) of the United States of America.
The workers in 2015 and 2016, staged sit down strikes to oppose the concession,
until the New Patriotic Party (NPP) came into office in January, 2017.
The new government promised to revise the terms of the concession from 25 years
to 20 years, and this delayed the transaction, which was far in an advanced stage,
until it came into force in March 2019.
Bur the staff of the PDS, who spoke to APA on conditions of anonymity, were
happy about the suspension of the concession agreement . They were of the
view that the concession should not have been signed at all, because the
concessionaire failed to meet all the requirements, but the MiDA, in its bid to meet
the conditionality for the MCC fund, did the wrong thing.
The workers are, however, hopeful that the ECG’s take over will settle the issue once
and for all, as the lease of a very strategic state asset for 20 years is dangerous.
As it stands now, the issue is still being investigated by the state security, following the
information that the company that issued the bond for the concessionaire has
suspended its staff for fraud, thereby, not being able to avow for the bond.
DAP/GIK/APA