PDS deal canceled

The contract between Power Distribution Services (PDS) and the government of Ghana has been terminated, government sources have disclosed.

The decision was at the instance of the government of Ghana, a source noted.

Sources in government say US government officials supervising the arrangement between PDS and Ghana wanted the deal to stand despite the challenges.

The move comes months after the Ghana Government announced a suspension of the contract but still watched on as PDS did business with ECG under an arrangement shrouded with confusion.

At the time, Ghana President Akufo-Addo said: “The decision to suspend the agreement, the President said, was necessary for “to protect the public interest, and to protect the ECG assets in excess of 3 billion cedis. These are not assets that you can take lightly. They were taken to protect the public interest and to make sure that the delinquency, if that is what it turns out to be, was nipped in the bud as soon as possible”.

PDS took over ECG on March 1 after its major shareholder Meralco Consortium from the Philippines won the Millennium Challenge Power Compact Two from the U.S.A.

However a little over four months after the takeover, the government suspended the contract after the “detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.”

The PDS deal: Who is involved

In July 24, last year, Parliament approved the concession agreement between the government and consortium led by the Manila Electric Company (Meralco). The Energy minister Boakye Agyarjo said the shareholding structure of the successful consortium was constituted as follows: Manila Electric (Meralco) of The Philippines, 30 per cent; Aenergia SA (Angola), 19 per cent; Santa Baron Ventures Ghana, 13 per cent; TG Energy Solution Ghana, 18 per cent; GTS Engineering Ghana Limited, 10 per cent, and TBK Ghana Limited, 10 per cent. These companies formed a consortium known as Power Distribution Service (PDS).

Opposition reaction 

The Minority in Parliament accused the Akufo-Addo administration of fudging the original Power Compact II agreement to handover the management of the Electricity Company of Ghana (ECG) to surrogates of the New Patriotic Party (NPP).

“This project was expected to significantly improve access to electricity, ensure operational efficiency, turn around ECG, increase their profitability and have a sustainable, reliable and resilient delivery of power to the good people of Ghana,” said former deputy power minister John Jinapor.

He said the process, which commenced under the NDC in a very transparent and competitive manner culminated in the selection of six companies that were pre-qualified both through the RFQ stage and at the RFP stage.

“Unfortunately, however… upon assumption of office by the Akufo-Addo administration under the guise of the so-called local content participation, the government deliberately altered the original agreement in a manner and fashion to pave way for the contracts to be awarded to a cabal of companies that have no track record in the energy sector,” he stated during a press conference Thursday in Accra.

“This cabal …critical investigations revealed are not experienced in the power sector but rather a group of friends, cronies and NPP party apparatchiks contrary to the original goals, objectives and aspirations of the programme.”