PDS deal not fraudulent – Egyapa Mercer claims

Deputy Energy Minister-Designate, Andrew Kofi Egyapa Mercer

A Deputy Energy Minister-Designate, Andrew Kofi Egyapa Mercer, has said the terminated Power Distribution Services (PDS) deal was not fraudulent.

According to Mr Egyapa Mercer, the contract was terminated following investigations that revealed breaches regarding the guarantor but did not constitute a scam.

Former Energy Minister Peter Awemu had described the transaction as fraudulent.

The deal resulted in PDS taking over the management of the Electricity Company of Ghana (ECG) under a Concession Agreement but was cancelled over irregularities.

A forensic audit conducted by the Millennium Challenge Corporation (MCC) and government investigations into the issuance of Demand Guarantees for the Concession Transaction revealed that the Payment Security for the Transaction was invalid.

However, addressing the Appointments Committee of Parliament on Monday, June 7, Mr Mercer said, “The communication from the government at the time was that there were some material breaches that had been detected which were going to be investigated. It was after the investigation that the transaction was terminated.

“At the time that the transaction was suspended, there was absolutely no basis for the assertion that it was suspended based on fraud,” the Minister-Designate emphasised.

After the cancellation, there calls for the prosecution of individuals who played various roles involving the contract.

Mr Agyapa Mercer was of the individuals whose name popped up.

However, he has refuted claims of his involvement in the PDS deal, particularly as the Director for the company.

“Interestingly, because the documentation for the transaction had my name as Director and one of the shareholders of PDS then it became easy to associate me with PDS and create the impression as if to say I was connected to PDS,” he said.

“The truth of the matter is that I am not a Director of PDS, nor am I a shareholder of PDS.”

“In 2014, I was engaged to incorporate a company for a client of mine who asked me to be Director-Secretary which is pretty much usual of Law practitioners. It turned out that, that company which is called TG Energy, went into some unincorporated joint-ventureship, which is usually referred to as consortium, that then bid for the ECG-PSP process and ultimately, when they won, incorporated a company called PDS which contracted with the government of Ghana.

“The cooperate law principles are quite clear that a company is separate and distinct from its shareholders and that indeed PDS, when it was incorporated, had its own directors and Secretary. I did an official search, and it’s clear who the directors of PDS and shareholders are. Nowhere is Andrew Mercer found in these two categories,” he explained.

He continued: “Indeed, I am a shareholder of the company that I incorporated for the client, so the question of conflict of interest in itself does not arise and has never arisen”.

Government cancels PDS agreement 

In 2019, the government terminated the Power Distribution Services (PDS)-Electricity Company of Ghana (ECG) power concession agreement.

The contract would have seen PDS taken over the assets of ECG for distribution of electricity in the southern sector of the country.

The government explained that, “The current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents.”

This has resulted in the lock-up of about $200 million in funds with PDS, which another Deputy Energy Minister-Designate, William Owuraku Aidoo, said had become difficult to collect due to prolonged court procedures.

However, Mr Aidoo said, efforts were underway to help ECG recover the money from PDS.

“When I was in office, some letters came in from some contractors that they were being owed money, so I took steps and the response I got when I contacted ECG was that they are yet to sit down to do some reconciliation, after which they’ll see the way forward as to what to do with the money,” he said.

Tariff reduction

When quizzed on calls by consumers for the government to reduce electricity tariffs, Mr Mercer told the Committee that measures would be put in place to ensure the efficiency of ECG.

There would be mechanisms to ensure that the technical and operational losses at ECG are reduced to generate more revenue to fund their cost.

This, he said, would lead to the “Reduction in the need for increases for tariffs that would inure to the benefit of the consumer, and I will support my Minister in that regard.”

On the way forward, Deputy Minister-Designate said the Ministry would focus more on the implementation and enforcement of the existing rules to ensure efficiency in the operations of ECG.

“It is just the enforcement of that regulation that then leads to the efficiency that is required to ensure that whatever ECG does is consistent with the rules that is already applicable,” he voiced.

 

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