PDS saga: Records show deal reduced ECG’s cost of operations – Chamber of IPPs

ECG PDS L A Commercial Court has dismissed PDS' case against the ECG

Sat, 30 Oct 2021 Source: www.ghanaweb.com

• The PDS deal was terminated in 2019

• A Commercial Court has also dismissed PDS' case against the ECG

• The cost of ECG’s operations has also now escalated

The Chamber of Independent Power Producers has indicated that records show that the botched Power Distribution Service Limited significantly reduced the cost of operations for the firm.

In 2019, the Government of Ghana terminated the Concession Agreement with PDS Limited regarding its asset management of the Electricity Company Ghana.

Chief Executive of the Chamber, Elikplim Apetorgbor, speaking at a forum organised by the Institute of Economic Affairs said PDS despite its short existence, attained some revenue maximization with regard to direct cost and other avoidable costs.

“My study revealed that this economic or commercial gap for which the government is continuously borrowing to fund via a special purpose vehicle – Delta Fund, is largely due to an unsustainable and unjustifiable business or commercial model being implemented by ECG to some of its bulk customers.”

“Most importantly, there is the need for a thorough investigation of what is called commercial losses on ECG’s book. This is now reported by the energy minister to be about 30%. How did it come about?”, he questioned.

Touching on the reported move by the ECG to sell bulk power supply to some 25 percent of customers at a rather cheaper rate, Elikplim Apetorgbor described the move as an unsound business model.

“With this unsound business model, the revenue gap or shortfall can never be closed, even if all PPAs are converted to take and pay. If transparency, as we understand is important then ECG needs public enquiry in cost engineering and transaction cost analysis,” he cautioned.

The Energy expert further bemoaned against political interference in the signing of Power Purchase Agreements, particularly in the energy sector.

Source: www.ghanaweb.com
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