Member of Parliament for Bongo, Edward Bawa, has questioned the lack of scrutiny of the power concession agreement with Power Distribution Services (PDS) on the part of Parliament.
On Citi TV‘s The Point of View, Mr. Bawa, a member of the Mines and Energy Committee, recalled that legislators spent less than three hours scrutinising the bulk supply agreement of the deal before it was approved.
The agreement for a 20-year concession was approved on July 24, 2018, paving the way for private-sector participation in Ghana’s power distribution as part of the Millennium Challenge Compact signed on August 4, 2014, between the Millennium Challenge Corporation (MCC) and Ghana’s government.
The Meralco-led PDS signed the concession agreement with ECG on March 1, 2019, a year after winning the bid.
Mr. Bawa called on the media to hold legislators accountable over “the types of agreements they [government] bring to Parliament and how fast we go around them.”
He also attributed such occurrences to extreme partisanship in Parliament and stressed that the “partisanship in Parliament at the expense of national interest must have a second look.”
According to him, “there were critical issues raised” as some MPs requested a more convincing picture of the players in the deal.
“What was their track record as players within the power sector? Basically, you realized that there were no satisfactory answers being given to us.”
PDS is a consortium between Meralco, Angola-based firm Aenergia SA and three Ghanaian firms namely TG Energy Solution Ghana, GTS Engineering Ghana Ltd. and TBK Ghana Ltd.
Some MPs also had issues with the payment securities which were supposed to be a pre-condition in the whole deal, Mr. Bawa noted.
PDS was supposed to furnish the ECG with payment securities in the form of either a demand guarantee or a letter of credit issued by a bank.
“ECG said that as at the time they were there, they were not getting it [the securities] but Minister Boakye Agyarko indicated clearly that they were sure that they were going to get it before the assets were going to be transferred. Fast forward, why we got here was that the guarantee moved from a bank guarantee to an insurance guarantee.”
The insurance guarantee came about because of difficulties experienced with raising a bank guarantee.
PDS thus appealed to use a demand guarantee issued by an A-rated insurance company.
PDS thus submitted the Payment Securities in the form of demand guarantees issued by a Qatari insurance firm, Al Koot Insurance and Reinsurance, which eventually became the source fraud after it was discovered that there were fabricated letters and forged signatures.
The government also noted that Al Koot did not have the capacity to engage in such a transaction based on its net worth.
The company was also not authorised to issue demand guarantees.