Mixed reaction greets termination of PDS, ECG agreement

The Chamber of Petroleum Consumers-Ghana (COPEC) has expressed displeasure over what it said were the unfolding developments surrounding the Millennium Compact Challenge Concessionaire Agreement involving the Millennium Compact Corporation (MCC), Government and the Power Distribution Services (PDS).

 It described as needless the tension that continues to escalate between the major parties in the concessionaire agreement regarding issues such as insurance guarantees, whether or not there was fraud, whether or not the local partners had the capacity required, string of legal issues, accusations and counter accusations, COPEC said in a statement issued in Accra and signed by its Executive Secretary, Duncan Amoah.

According to the statement, the key principal actors over the past few days have taken very dangerously entrenched positions regarding the earlier stated breaches, infractions or otherwise in the agreement, adding that the MCC seems very clear in its posturing, it will have nothing to do with the concession agreement if government does not reinstate PDS by October 30, 2019.

COPEC Ghana stated that the MCC was clear in its position that its forensic audits by FTI of the whole agreement and subsequent transactions thereon indicated no wrong doing and as such, absolving PDS of any fundamental material breaches as far as the concessionaire agreement was concerned.

It noted, that recent public posturing of MCC also suggests some attempted arm twisting by certain powerful persons within government to re-appropriate shares in the concession to other favourites of these powerful persons.

This move, according to COPEC, have seen some of the local partners within the PDS agreement drop from some 18 per cent shareholding as spelt out in the current agreement to just two per cent, a move which has been resisted by the local partners and for which these so called very powerful persons within government have vowed to terminate at all cost the PDS concession.

“While government indeed reserves all rights to enter into such concessionaire agreements and to abrogate same when fundamental breaches are detected, this right by government should not and must be exercised arbitrarily with the view to favouring any cronies if the information we are picking is anything to go by,” it said.

COPEC Ghana reiterates its position and support for a complete halting and withdrawal of any transfer of ECG to private operators in the name of concessionaire agreement if and only if the government is ready to accept to allow ECG work completely independent of any political controls.

On his part, Mr Alex Mould, former Chief Executive of the National Petroleum Authority (NPA), questioned why the MCC allowed a grace period to re-conduct a tender when they have been on this compact for five years.

“The issue was identified in February 2019 when PDS could not come up with the Bank Guarantee just before the deadline of March 1, which surprises me as the international player Meralco could easily get its banks in Philippines to issue.  So why was it left to the local shareholders to raise the guarantees, this was the first red flag,” he queried.

Mr Mould said assets were handed over in March, 2019 in a rushed manner where CPs were not met. Since April, there have been to and fro discussions with MCC and undue influence by people close to government.

According to him, the audit was completed over two months ago and it was clear that Ghana was duped in handing over the ECG assets mainly due to lack of due diligence by the people in charge of the concessionaire privatisation.

“We are where we are because government failed to take the option proposed by MCC to keep the PDS contract (that is to abode by sanity of contract’s doctrine) but change the shareholding especially of the 51 per cent  local players,  who had no proof of competence either financially or technically to have managed something similar in complexity and magnitude.

“Remember Meralco is the only reason why the contract for this ECG concessionaire was awarded to the PDS consortium based on their technical and financial clout which none of the other shareholders – including the recently added AEnergia SA, which still remains a mystery in terms of ownership and why at all it is in the consortium – and there is no agent to get rid of them.

“Let’s put the blame squarely on Ghana! Let’s call a spade a spade!!

The focus is not Ghana First, but rather what “we” get from managing the assets of the state which normally results in short changing the citizens of Ghana and to the detriment of our economy.

Government needs to reverse the termination of the transaction before our economy gets bigger hits than the GH¢2 billion we just lost on the Power Compact alone.

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