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26.10.2019 General News

Termination Of PDS Deal Not Convincing – Lawyer

By News Desk
Termination Of PDS Deal Not Convincing – Lawyer
OCT 26, 2019 GENERAL NEWS

Private legal practitioner, Yaw Oppong said the reasons given for the termination of the Power Distribution Services (PDS) concession agreement is not convincing at all.

Mr. Oppong on Citi FM/TV‘s News Analysis Programme, The Big Issue, said the grounds on which the deal was terminated is still unclear.

“I am not very sure of the grounds on which the Electricity Company has terminated the PDS contract. We should know [that] the contract was not just between the ECG and PDS. Other people, related parties like stakeholders also had a role to play.”

“In going ahead to do that, I would have thought that the generality of information from the Americans, from Ghana, the ECG and so on should have been factored into it so that we get a more convincing ground to terminate it if we had to because as we sit here I do not know the grounds on which it was terminated,” he said.

The government on Wednesday commenced processes to terminate the concession agreement between it and the PDS.

The move followed 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.

ECG takes over power distribution

The Electricity Company of Ghana (ECG) subsequently announced that it had assumed 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 on 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”. Termination of PDS deal was unwarranted, $190m withdrawn – US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.

The statement noted that, following the termination of the deal, the Millennium Challenge Corporation (MCC) has confirmed that “the $190 million funds granted to Ghana at the March 1 [2019] transfer to the 20-year concession from ECG to PDS are no longer available.”

The US, however, says it will “continue to implement the Tranche I funds of $308 million with the Millennium Development Authority (MiDA). ”

—citinewsroom

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