PDS DEAL TERMINATED

A FORMAL ANNOUNCEMENT OF THE DECISION IS EXPECTED IN THE COMING DAYS.

PRESIDENT, NANA AKUFO-ADDO

The concession agreement with Power Distribution Services has been terminated on the instruction of the President, Nana Akufo-Addo, highly placed sources have told myjoyonline.com.


A formal announcement of the decision is expected in the coming days.


A termination brings to an end, PDS’ short-lived control of the country’s electricity supply.

The company was engaged in March but since its suspension on July 30, PDS had been embroiled in a corporate governance tussle among the shareholders.


A Ghanaian local consortium holds the 51% of the shares while the remaining 49% shares are for two foreign companies, Manila Electric Company Limited (Meralco), a Filipino company with 30% shares and Aenergia, an Angolan company with 19%.


DESPITE THE CLEARANCE IN AUGUST, PDS REMAINED SUSPENDED AND GOVERNMENT HAS NOW TAKEN A DECISION TO CANCEL THE AGREEMENT, SOURCES HAVE MAINTAINED. THE ENERGY MINISTRY WHEN CONTACTED SAID NO SUCH DECISION HAS BEEN MADE.

Foreign player, Meralco offloaded its shares to Meridian Power Ventures Ltd, a letter to a key transaction advisor, the US-backed Millenium Development Authority (MiDA) confirmed.

The opposition sees the offloading of Meralco’s shares as evidence of clandestine attempts by the government to loot the assets of Electricity Company of Ghana taken over by PDS.

PDS was suspended after the government said it suspected the agreement was tainted with fraud.


The transaction advisor, MiDA, set up an investigative body into the allegations and cleared PDS of fraud.


Despite the clearance in August, PDS remained suspended and government has now taken a decision to cancel the agreement, sources have maintained.


The Energy Ministry when contacted said no such decision has been made.


The history of the PDS saga


 In this write-up we trace the history of PDS, what is PDS, who are the shareholders, why we are where we are, and what the authorities are not saying.


In 2014, as part of the conditions that government needed to satisfy in order access a second Millennium Challenge Compact, christened the Ghana Power Compact, private participation in the management of Ghana’s debt-ridden energy sector was mooted. The Compact II would see Ghana receive $498.2 million from the Millennium Challenge Corporation of the United States to advance economic growth and reduce poverty in Ghana.


According to the Millennium Development Authority, MiDA, the supervising agency of the MCC Compact, the power compact was to, “directly support the energy sector strategic objectives to achieve power supply sufficiency including exports to neighbouring countries, and also supply power for new oil and gas-based industries.”


The John Mahama government announced the decision to, under the Compact II agreement, enter into a concessional agreement where a private company would take over the management of the largest power distributor in the southern part of the country, the Electricity Company of Ghana. The announcement was however met with resistance despite strenuous clarification and explanation by the government that the strategic national asset was being privatized. The workers of ECG held several public fora and protested the decision, arguing that if the government paid its debts to the power distributor and made the necessary investments, the company was capable paying its supplies and proving viable.


Nonetheless, invitations were made for companies wishing to participate in the management of ECG to come forward. In September 2016, the Chief Executive of MiDA, Ing. Owura Kwaku Sarfo announced that out of the over 60 companies that expressed interest in the Private Sector Participation in ECG), MiDA had shortlisted six, out of which one would eventually be selected as the concessionaire.

Two of the six companies were consortiums, with the other four bidding individually.

The companies are Manila Electric Company from the Philippines; Ch Group/Edf Sa/Lmi Holdings/Veolia Sa with Ghanaian address; Engie Energie Services, SA; from France, Bxc Company Ghana Ltd /Xiaocheng Technology Stock Company Limited, registered and operating in Ghana; Enel S.P.A.from Italy; and Tata Power Company Limited from India.

In a document titled ‘Concession for the management of, operation of, and investments in the electricity distribution business of the Electricity Company of Ghana, Pre-qualification of applicants and release of RFP,’ request for proposals were issued to the shortlisted c