Double Track Hits Power Distribution in Ghana: PDS out, ECG the Prodigal son in at full force. The government of Ghana has suspended its concession agreement with the Power Distribution Services (PDS) bringing back the Electricity Company of Ghana (ECG) in full control with immediate effect.
According to Government, it is investigating PDS for some breaches of the agreement entered into. This was announcing in the late hours of Tuesday, July 30th 2019.
The contract has been abrogated after six months of entering into the contract with the Power Distribution Services.
In a statement signed by Information Minister Kojo Oppong Nkrumah, it disclosed that “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 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 press release from the Ministry of Information, signed by the Minister of Information, Hon. Kojo Oppong Nkrumah indicated that government was taking the needed steps to unveil the details
According to Ghanaweb, its checks have also revealed that following the transfer of ECG’s assets and operations to PDS on the 1st of March, 2019, ECG, acting as the beneficiary of the Demand Guarantees, has subjected the Guarantees submitted by PDS to further due diligence tests.
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ECG received a letter from Al Koot, dated 16 July 2019 that claims, among other things, that the officer who executed the Guarantees from Al Koot was not authorized and that the Guarantees are null and void. The letter also stated that the officer had committed fraud.
Insider information further revealed that the alarming development resulted in meetings with officials of Ministry of Finance and ECG as well as with President Akufo-Addo.
After the meetings Government decided to crosscheck the information contained in the Disclaimer Letter by sending a Delegation of Stakeholders to Doha, Qatar, on Wednesday, 31st July 2019 to meet with officials from Al Koot.
Prior to the trip by the Government Delegation and their report, the Government, therefore, decided, as a precautionary measure, to set aside the Concession Agreement with effect from Tuesday, 30th July 2019.
Source:Ghanaweb.com & Newsghana24