Heads to roll as NPP, NDC fight over PDS scandal

• Posted on August 2, 2019
• by Nana Kwesi Coomson
• Comment

The suspension of the Power Distribution Services (PDS) power concession agreement by the government has started a big fight between the ruling New Patriotic Party (NPP) and the opposition National Democratic Congress (NDC) over who should be held responsible.

Minister of Information Kojo Oppong-Nkrumah yesterday held a news conference in Accra in the presence of Energy Minister John Peter Amewu to set the records straight on the matters arising. He said the government would complete full-scale inquiry into what he called ‘detected breaches’ by PDS within a month.

He said the team conducting the inquiry comprises insurance experts, officials of the energy and finance ministries, officials of the Electricity Company of Ghana (ECG) and Millennium Development Authority (MiDA). The inquiry would determine the nature of the breaches and advise on suggested next steps.

“By Tuesday, the team is expected in DOHA-Qatar as part of the inquiry. All interested parties are co-operating with the inquiry at this stage,” he announced.

Second Team

The minister said a second team had been tasked to continue engagement with the American government through its agency – the Millennium Challenge Corporation, saying “this engagement is about the possible next steps after the inquiry and channels for sharing information as part of this inquiry.”

“We reiterate that this breach was discovered by the due diligence of the Ghanaian authorities through ECG and with the support of state agencies,” he stated.

“For the avoidance of doubt, the provision of the payment guarantee has always been a condition precedent and was never changed to a condition subsequent as being speculated by some persons. Initial due diligence led by the transaction advisors did not detect anything wrong with it. The second level checks (this time led by the Ghana side) initially yielded a response from Al-Koot confirming the guarantee,” he added.

Third Level

He said, “It was a third level check by the Ghana side that detected anomalies within Al-Koot, thereby triggering a fourth level check.”

“The fourth level check involved sending an initial team from the Ghana Mission in Qatar to engage with Al-Koot officials for further verification. This fourth level further proved the anomalies and suggested untoward action which is now the subject of the full-scale inquiry,” he added.

Minority Attack

The Minority NDC, whose time the whole transaction was initiated, has been firing from all cylinders and have even gone to the extent of describing the deal as ‘create, loot and share’ which has been synonymous with their regime in respect of corruption.

Yesterday in Parliament, they accused the NPP administration of ‘complicity’ in the suspension of the takeover of ECG by PDS five months ago.

According to the Minority, the action smacks of ‘create, loot and share’ plot by the Akufo-Addo government.

A member of the Mines and Energy Committee of Parliament and NDC MP for Yapei/Kawsugu, John Abdulai Jinapor, said it beats everybody for the government to take 150 days to be able to determine the authenticity or otherwise of the ‘guarantee’ when standard practice dictates just 48 hours for the conduct of any meaningful due diligence of this nature.

“Our checks have revealed that PDS has so far not injected the needed financial capital as stipulated under the concession agreement. In fact, at the time of filing documents, some of the partners (TG Energy Solutions) to the consortium have no offices nor physical location per documents presented to the Mines and Energy Committee by the Millennium Development Authority,” he said.

“How can the Akufo-Addo government be so cruel to Ghanaians and ECG—strategic state institution with a workforce of 6,000 and assets worth GHC18 billion by mortgaging the company to cronies, family and friends,” he fired.

The Minority said any concession at this time would certainly not serve the interest of the nation, adding that it could easily send the nation into another ‘dumsor’ era.

The NDC said they would resist any attempt to re-introduce other so-called private sector players or the constitution of an SPV into the system.

Initial Facts

It was during the erstwhile Mahama administration that the transaction advisors for the ECG private sector participation were appointed, and this was after the tender process was done and PDS and all the rest put in a bid.

IFC were the transaction advisors with Hutton Williams as lawyers for the transaction – all chosen under Mahama. All these persons endorsed the insurance guarantee presented by PDS paving way for the deal to be closed.

Some legal experts are making a cynical claim that PDS, and its local collaborators (TG Energy Solutions Limited, Santa Power Limited and GTS Power Limited) ‘duped’ the Ministry of Energy, Cabinet and Parliament that it was ready, able and willing to invest about $580 million in capital expenditure over the first five years of the 20-year period of the concession.

MiDA Factor

Ben Boakye, Executive Director of the Africa Centre for Energy Policy (ACEP), said “ACEP is not surprised by the development but deeply worried by the level of negligence that has led to this current situation. Indeed, the finest conclusion anyone can give is that this represents the summary of the posture of MiDA in the events leading to the cancelling of the agreement.”

He said, “While ACEP commends government for quickly mobilising the public interest, the following actions are required – there is the need for the immediate interdiction of the leadership of MiDA to prevent tampering of evidence that may be necessary to support the case of the state.”

“Government must cease with immediate effect the consumption of advance from IFC on the transaction; this is because the IFC has proven incapable of defending the interest of its clients in this case the Ghana Government and MiDA. Government should immediately audit the background of the beneficiaries and local partners in the PDS concession,” he added.

By Melvin Tarlue& Thomas Fosu