The Institute of Energy Security (IES) has welcomed the decision by the government to suspend the concession agreement with Power Distribution Services.
Government in a statement said the decision to suspend the concession agreement with immediate effect was taken after the government discovered some breaches in the company’s obligation in the provision of payment securities.
Research and Policy Analyst at IES, Mikdad Mohammed told Citi News that PDS must take full responsibility for the latest development.
According to him, PDS lacked the funds to invest in the Electricity Company of Ghana.
“We want to applaud the confidence of government, irrespective of the huge political cost for them to come out this way and secondly on the question of huge diligence that lies at the center of the entire transaction. The question of this due diligence is not something that is coming up today. It is something that should have been discussed long time ago, before February 2019.”
“PDS didn’t have the funds to invest, so what they did was that they were using the receivables’ of ECG they have collected to show as proof of something. To make it clearly, people were indebted to ECG, millions which they have not been able to pay, so PDS was hoping that by applying force and collecting those monies from these people, they will now present the money back to government as the money they have invested in ECG,” he said.
On Tuesday, government suspended the concession agreement with Power Distribution Services (PDS), bringing back the Electricity Company of Ghana (ECG) to be in full control of power distribution.
The abrogation of the contract comes barely six months after the company took over from the Electricity Company of Ghana.
A statement signed by Information Minister Kojo Oppong Nkrumah, disclosed that “the decision follows the detection of fundamental and material breaches of PDS obligation in the provision of Payment Securities (Demand Guarantees). 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 Minister for Energy, John Peter Amewu had also said investigations conducted by the government has established that a document that was presented by Power Distribution Service (PDS) as a guarantee for the takeover of the Electricity Company of Ghana (ECG) was forged.
The Minister explained that even though the document indicated that a company in Qatar has guaranteed for PDS, the management of the company told the government it had no knowledge of the document.
Speaking to Citi Business News, Mr. Amewu stated that the government will prosecute anyone found to have engaged in the fraudulent act.
“The investigations that was conducted through due diligence processes had established that the payment guarantee that was submitted by PDS to ECG was for some reasons the word fraudulent has been used in it. The executing authority denied ownership of such document and therefore had written to ECG to announce that we’ve got nothing to do with this document.”