Home   >   Business   >   Economy   >   201908
Suspension of PDS Contract: IES Asks Govt To Disclose Details of Beneficial Ownership   
  << Prev  |  Next >>
Comments ( 2 )     Email    Print
Related Stories
Following the take-over of the Electricity Company of Ghana (ECG) in March 2019 by the Power Distribution Services Ghana Ltd (PDS), based on a July 3rd 2018 Lease and Assignment Agreement (LAA) and Bulk Supply Agreement (BSA) between the two entities as part of the Private Sector Participation (PSP) in ECG under the Ghana Power Compact of the Millennium Challenge Account (MCA),....

....it is the contention of the Institute for Energy Security (IES) that but for the timely intervention of the United States Government and the Millennium Development Authority (MiDA), a full-blown ‘fraud’ would have been perpetrated on the Ghanaian people.

On the back of these, IES is calling on government to disclose fully the details of the beneficial ownership of these Ghanaian companies that have proven to be financially not-fit-for-purpose.

According to the Institute for Energy Security (IES), it must be stated clearly that PDS from inception failed to provide as a ‘Condition Precedent’ among other things, a documented Lease Payment Security (LSP) and BSA Payment Security in the form of Letters of Credit (LC) issued by a qualified bank as spelt out in the LAA and the BSA as proof of capitalization.

"The owners of PDS also failed to demonstrate fund availability for PDS to meet its financial obligations in the form of Pro forma projection of PDS’ sources and uses of cash during the first year of the agreement as insisted by MiDA," a statement from the IES said.

PDS failed to meet the demand by MiDA that equity contributions must be received in advance of the transfer date. IES is reliably informed that but for a due diligence undertaken by the U.S. Government and MiDA on the Insurance Guarantee (and a caution letter from Al Koot Insurance Qatar), which visiting U.S. Government representatives were unimpressed with, this issue would have been swept under the carpet to be ‘secretly micromanaged’ by government functionaries.

Suspension of PDS Agreement

Government, on Tuesday, suspended its concession agreement with the Power Distribution Services (PDS). This means the Electricity Company of Ghana (ECG) is back in full control of electricity matters.

A statement signed by the Information Minister, Kojo Oppong Nkrumah, disclosed that the decision was taken after government detected “fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.”

According to the statement, “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 government is conducting a full inquiry into the matter, and the outcome will inform the next course of action. Government has taken steps to ensure distribution, billing and payment services continue uninterrupted,” the statement added.

Source: Peacefmonline.com/GHANA

Comments ( 2 ): Post Your Comments >>

Disclaimer: Opinions expressed here are those of the writers and do not reflect those of Peacefmonline.com. Peacefmonline.com accepts no responsibility legal or otherwise for their accuracy of content. Please report any inappropriate content to us, and we will evaluate it as a matter of priority.
Featured Video