Government to release ECG to private concessionaire after botched PDS deal
A year after the government terminated its agreement with Power Distribution Services (PDS) over allegations of fraud, it has emerged that there are fresh moves to release ECG to another private concessionaire.
New companies are angling to take over the power distributor as the government seeks to offload the state’s involvement in power distribution.
A Deputy Minister of Energy in charge of petroleum, Dr. Mohammed Amin Adam, announced the government decision in Accra.
He said although the government had been silent on the previous botched ECG/PDS matter since the termination of the contract, processes were underway to secure a new deal.
He, however, failed to disclose the identity of the new private concessionaire.
But he indicated that the move was aimed at making the power distributor more efficient and profitable to support economic development.
Dr. Amin Adam, however, gave the assurance that the arrangement being devised would be better than the concession agreement that the ECG entered into with the now-defunct PDS Ghana Limited in March 2019 before it was cancelled in October that same year.
He said the new deal, when secured would be announced to the public as part of the government’s efforts to help change the fortunes of the state-owned power distributor.
The concession agreement with PDS was been terminated on the instruction of President Nana Akufo Addo in October 2019.
A termination brought to an end, PDS’ short-lived control of the country’s electricity supply.
The company was engaged in March 2019 but was suspended on July 30. Since its suspension, there had been a corporate governance tussle among its shareholders.
A Ghanaian local consortium held 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%.
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.
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 the government has now taken a decision to cancel the agreement, sources have maintained.
Ghana has lost a $190 million granted by its US partners as part of a power concession agreement.
A statement from the US embassy said the Millennium Challenge Corporation (MCC) confirmed that the money was no longer available after Ghana decided to terminate the concession agreement with PDS.
“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 US government said.