John Peter Amewu
DETAILS ARE emerging concerning what led government to suspend its contract with Power Distribution Services (PDS) Ghana Limited.
Information gathered by DAILY GUIDE indicates that government did not wait to inspect securities presented to it by PDS to ascertain their authenticity or otherwise before handing over the operations of Electricity Company of Ghana (ECG) Limited to PDS.
Energy Minister John Peter Amewu told Joy FM there was a deadline by which the agreement should have started so government hastened to meet its contractual demands.
However, instead of cross-checking the demand guarantees of PDS, it went ahead to entrust the operations of ECG to it so it could do the checks at a later time.
The arrangement to bring on board a private participant to help transform the country’s energy sector was a condition Ghana had to meet by a particular date to access about $500 million from the Millennium Challenge Account fund.
Al Koot – a company which PDS claimed was its security in Qatar – had come out to declare it did not have any agreement with PDS. This renders the signature on the securities purportedly endorsed by an official of Al Koot as forgery. That official of Al Koot has since been suspended by his employers.
ECG has assumed operations of the country’s power distribution services pending the outcome of investigations.
Government, through the Ministry of Finance and the ECG Limited, on Tuesday suspended the concession agreement with PDS Ghana Limited with immediate effect.
A statement issued by the Ministry of Information and signed by Kojo Oppong Nkrumah, said the decision was arrived at following the detection of fundamental and material breaches of the obligation of PDS in the provision of payment services (demand guarantees) for the transaction which has been discovered upon further due diligence.
It said 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.
These stem from suspicions that the officer who executed the Demand Guarantees (Lease Payment Security and BSA Payment Security) submitted by PDS was not authorized and, therefore, a fraudster.
PDS was supposed to manage the operations of ECG for 20 years starting from Friday, March 1, 2019.
But government has had to hang up the agreement with immediate effect as a precautionary measure, since there is suspicion of such elements of fraud in the transfer of ECG’s assets and management to PDS.
“The government is conducting a full enquiry into the matter and the outcome will inform the next course of action. The general public and customers are assured that this development will not interfere with the distribution of electricity services to customers,” the statement noted.
An investigative team from the ECG instituted a number of due diligence tests and discovered that a commercial insurer and reinsurer, Al Koot, which is based in Qatar, wrote a letter to ECG dated 16th July, 2019. In the letter, Al Koot indicated, among other things, that the officer, who executed the demand guarantees on behalf of Al Koot, was not authorized and that the guarantees were null and void.
The letter also accused the officer of committing fraud.
A number of meetings were consequently held between government and stakeholders on July 28, which culminated in the suspension of the concession agreement on July 30.
Meanwhile, a government delegation was due to travel to Qatar yesterday to meet officials from Al Koot and verify the information specifically on the fraud aspect.
PDS has reacted to the news, saying it will go through the process by complying with the terms of the transaction agreements executed between it and ECG on one hand as well as government, through the Ministry of Finance, on the other hand.
BY Samuel Boadi