US$134m judgment debt: EPA cancellation was for propaganda – Kwabena Donkor

The former Power Minister and Member of Parliament for Pru East, Dr Kwabena Donkor, has called on Ghanaians to hold NPP government responsible and demand answers over the US$134 million judgment awarded against Ghana by the International Court of Arbitration.

According to him, the cancellation of the agreement was unnecessary adding that there was a certain level of propaganda by the ruling government in the decision to cancel the emergency power agreement.

“I sincerely believe we handled the whole issue wrongly. It was not for nothing that the emergency power contracts we signed were for 5 years. We have two options. Eat a humble pie and go back to the company or pay up. Or go for an appeal hoping that the quantum of the cost will be beaten down,” Dr Donkor said Monday on the Morning Starr.

He added “there’s a certain amount of propaganda. If the 5-year agreement was allowed to run, we only pay a capacity charge which is embedded in the tariff…It’s either we go for an appeal or pay up and hold people responsible. Whoever was behind the cancellation now has to come out and justify it. The actors in this owe Ghana an explanation. Sometimes, other interests, unfortunately, come into play in the business of the state and that ought not to be.”

Background

The International Court of Arbitration has awarded a cost of US$134 million and an interest of US$30 million against the Government of Ghana over the cancellation of an Emergency Power Agreement with GCGP limited.

The Contract was canceled under the former Energy Minister Boakye Agyarko as part of several other energy contracts canceled by the NPP on the basis that the country did not need those power agreements.

The ruling by the International Court of Arbitration ordered the government to Ghana to pay to “GPGC the full value of the Early Termination Payment, together with Mobilization, Demobilization and preservation and maintenance costs in the amount of US$ 134,348,661, together also with interest thereon from 12 November 2018 until the date of payment, accruing daily and compounded monthly, at the rate of LIBOR for six-month US dollar deposits plus six percent (6%).”

The Government of Ghana was also to pay GPGC an amount of “US$ 309,877.74 in respect of the Costs of the Arbitration, together with US$ 3,000,000 in respect of GPGC’s legal representation and the fees and expenses of its expert witness, together with interest on the aggregate amount of US$ 3,309,877.74 at the rate of LIBOR for three-month US dollar deposits, compounded quarterly.”