Power Distribution Service (PDS) has responded to the government’s statement announcing a suspension of its concession agreement.
The company, in a statement following government’s announcement of an immediate suspension of the deal owing to the discovery of some improper actions by PDS said it “wishes to state for the record that it has always acted and will continue to act in good faith at all times.”
The Minister for Information in a statement on Tuesday said, PDS’ concession agreement was suspended after the government discovered some breaches in the company’s obligation in the provision of Payment Securities.
“The decision follows the detection of fundamental and material breaches of 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 statement said.
The government also added that it will conduct a full enquiry into the matter.
But PDS in response said it “will go through the process by complying with the terms of the Transaction Agreement executed between it and ECG on one hard and GoG through MoF on the other hand.”
“PDS also wishes to assure the Ghanaian public 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,” it added.
Read the statement below:
PDS officially took over services from the Electricity Company of Ghana (ECG) in February 2019 after winning the bid to run the power service several months earlier.
The company was expected to turnaround the operations of ECG to make it profitable.
It was also supposed to improve access to electricity while cutting down on wastage in the system as well as blocking all leakages that drained the financials of ECG.
The company inherited huge debts from ECG, most owed by government through its Ministries, departments and agencies.
PDS’ operations over the past few months have been fraught with many challenges including frequent power cuts and huge debt it owed some Independent Power Producers (IPPs).
Earlier this month, the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB) issued a seven-day ultimatum over $600 million owed it by the government.
It threatened to cut the supply of power to PDS if the amount was not paid.
The government said it was not responsible for the payment rather it was an issue between PDS and ECG and they needed to find a way to address it.
PDS later said ECG was responsible for the payment.
Days later, the Electricity Company of Ghana (ECG) confirmed receipt of GHc 200 million from PDS Limited which it said it has paid to the IPPs to defray part of the debt.
The journey to get a private sector player to manage the affairs of the ECG started after Ghana won the power compact two which was expected to inject some 900 million dollars into ECG.
Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.
Under the Power Compact, six projects were supposed to have been implemented to address the root causes of the unavailability and unreliability of power in Ghana.
The project included ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.
The rest included Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.