The government has indicated that it will select a new partner for the power concession agreement through a restrictive tendering process.
This is contained in its statement announcing and justifying the decision to terminate the power concession agreement with Power Distribution Services (PDS).
With nearly two years for the expiration of Ghana’s Millennium Compact II Program with the US, the government recommended that the Millennium Challenge Corporation (MCC)/Millennium Development Authority (MiDA) use restricted tender process to select the new partner.
It said the process will be done speedily without compromising the integrity of the procurement process.
“Whilst recognising the prerogative of the MCC in the determination of a particular procurement method in the selection of a PSP, in view of the limited time (approximately two years) until the expiration of the Compact II Program, Ghana hereby recommends the adoption by the MCC/MiDA of a restricted tender process to replace PDS. This restricted tender process shall be undertaken timeously by fast-tracking some of the processes without compromising the integrity and transparency of the procurement processes.”
The government officially announced the termination of its power concession agreement with Power Distribution Services (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 on Friday, October 18, 2019 with the Secretary to President Akufo-Addo, Nana Bediatuo Asante and officials of the Millennium Challenge Corporation.
“The current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents,” the statement said.
The concession agreement was initially suspended on July 30, 2019 by the government due to what it called “fundamental and material breaches”.
Details of the alleged breach revealed that PDS’ guarantee was irregular and fraudulently procured.
The government came under attack over the development but it rejected accusations that it was negligent in the exercise of its duty to thoroughly scrutinize documents presented by PDS before a final agreement was signed for its concession agreement.
The government constituted a committee to investigate the development and ascertain its nature.
Proceedings from the investigations led to the eventual decision announced in the latest statement.
The statement, signed by the Finance Minister, Ken Ofori Atta said the government will make every effort to ensure that a suitable replacement for PDS is found within the relevant timelines to ensure that the government of Ghana completes the Compact.
“Every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the Compact,” the statement said.
Government added that it remains committed to seeing private sector participation in the country’s energy sector.
“Indeed, Government intends to see this PSP through in a manner that respects due process and fidelity to the relevant transaction documents and underlying Compact.”
Click here to read details of the government’s justification for the termination
