Caucus for Democratic Governance Calls for the Cancellation of the PDS Deal

PDS Ghana

Accra, Ghana, August 7, 2019//-Caucus for Democratic Governance, Ghana (CDG–GH), a leading pressure group has called for the abrupt cancellation of the concession between the government and the Power Distribution Services (PDS) Ghana Limited.

According to a statement issued and issued by the Chief Convener CDG-GH, Dr E.K.Hayford, the display of inefficiency and lack of due diligence is crippling  government activities and leading to irresponsible dissipation of taxpayers’ money.

Recently, the government announced that it had through the Ministry of Finance and the Electricity Company of Ghana (ECG) Limited suspended the concession agreement with PDS with immediate effect.

The government explained that the decision followed the “detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction.

“The companies that took the 51% (PDS), as I write have not paid even a cedi to the Government.  Ghanaians are suffering. Last month, electricity and water rates went up. Fuel prices, transport fares and prices of food and goods have all gone up; and yet the Government does not seem to care”, the statement said.

Portions of the statement below

POWER PURCHASE AGREEMENT SCANDALS UNDER NANA ADDO`S GOVERNMENT

The Caucus for Democratic Governance, Ghana (CDG–GH), has observed with shock, the flaws  and corrupt manipulations in the Power Purchase Agreements which is crippling the energy  sector in  Nana Addo`s  Government .

It all started in 2017 when Nana Addo and his Energy Minister Boakye Agyarko abrogated the AMERI Agreement. The original agreement negotiated by former President Mahama and wrongly criticized by NPP, has the following as basis :

Ghana was  to pay  $102 million for 5 years. The total payment is $ 510 million. After the 5years, the plant becomes State property.

When NPP took over power, they decided to renegotiate the agreement on the basis of so called “value for money”.  The renegotiated agreement was as follows :

Ghana was to pay $75 million for 15 years. The total payment in this case, is $ 1.125 billion.

Comparing the renegotiated agreement  to the original agreement, Ghana looses $615 million of the taxpayers money. Surprisingly the new agreement with inflated cost passed through cabinet and with Nana Addo`s signature was sent to Parliament for ratification. It was found to be fraudulent and so was blocked by Parliament.

Soon after this aborted create loot and share AMERI agreement, the President decided and insisted, in the face of several protest to sell ECG.  To push through his interest, Nana Addo announced that Ghana had renegotiated to control 51% of ECG; in its negotiation with Millennium Development Authority (MIDA).

Prior to the transfer of ECG to PDS, the agreement  demanded guarantees ; that is,  the Lease Payment Security and the Bulk Supply Agreement (BSA)  Payment Security, or  letter of credit issued by a Qualified Bank.

Power Distribution Services (PDS) however could not meet the requirement of the Lease & Agreement Agreement (LAA) and Bulk Supply Agreement (BSA). Indeed the letter of credit issued by the Qualified Bank was fraudulent.

Meanwhile, the Millennium Development Authority (MIDA) had nominated Miralco, the Manila Power Company to manage Electricity Company Ghana (ECG).  Indeed the transfer to PDS  went ahead even though the disbursement of the $500 million ECG privatization package under the Power Compact II agreement had not started.

African Eye Report

 

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