The Minister of Information, Kojo Oppong Nkrumah has disclosed that the government will this morning commence processes to terminate the concession agreement between it and the Power Distribution Services, PDS.
The move follows the announcement of the cancellation of the contract by the Minister of Finance, Ken Ofori Atta after a meeting with officials of the Millennium Challenge Corporation.
The US government has since discontinued the provision of $190 million to support the turnaround of the ECG.
The government in July this year suspended the PDS deal on grounds of fundamental breaches by the partners of the consortium.
Addressing the press on the issue, Kojo Oppong Nkrumah said the government is committed to giving value for money for Ghanaians with the supply of power.
“On the America side, though the insurers stand by a purported guarantee, the deal is that the termination and restructuring will be more tolerable. As we have mentioned, the two sides have not been able to find a common path to resolve this point. The government of Ghana consequently is today commencing the process to terminate [the agreement]. The necessary documentations are being filed with PDS and the Energy Commission. It is expected that residual matters between ECG and PDS will be resolved with dispatch”
ECG takes over power distribution
This latest development has officially paved way for the Electricity Company of Ghana (ECG) to from today, Wednesday, October 23, 2019, assume full control of electricity distribution business in the southern part of Ghana.
In a statement, the ECG said;
“The Electricity Company of Ghana Limited (ECG) has today, 23rd October, 2019 terminated Private Sector Participation Transaction Agreements with Power Distribution Services Ghana Limited (PDS). ECG has therefore assumed full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect. Consequently, all activities which were hitherto undertaken by PDS have reverted to ECG,”.
Per the statement ECG will undertake the following:
• Distribution of bills
• Bill reconciliation
• Revenue collection
• New Service connections
• Disconnections and reconnections
• Faulty meter replacements
• Network faults and repairs
• Network Operations, Maintenance, Expansion and Rehabilitation
• Complaints and fault reporting to the call centres
• Any other related services
The government officially announced the termination of its power concession agreement with PDS in a statement dated Friday, October 18, 2019.
It said in the statement that the decision was taken at a meeting in the US with the Secretary to President Akufo-Addo, Nana Bediatuo Asante and officials of the Millennium Challenge Corporation.
Termination of PDS deal was unwarranted, $190m withdrawn – US
The United States of America had described the termination of the concession agreement with Power Distribution Services as unwarranted.
Despite the government’s claims of fraud in the deal, the US in a statement from its Embassy in Ghana insists that the agreement was valid.
“Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted,” the statement read.
The termination of the deal also means Ghana will be losing out on $190 million.