Why government suspended PDS

Government of Ghana in the late hours of Tuesday, July 30 announced the abrogation of the contract with Power Distribution Services barely six months after the company took over from the Electricity Company of Ghana.

In a statement signed by Information Minister Kojo Oppong Nkrumah, it disclosed that “the decision follows the detection of fundamental and material breaches of PDS obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further diligence. The Demand Guarantees were key prerequisites for the lease of assets on 1st March 2019 to secure the assets that were transferred to the concessionaire.

It further indicated that steps were underway to unveil the details that went into it as government is conducting a full enquiry into the matter.

Checks by Ghanaweb have also revealed that following the transfer of ECG's assets and operations to PDS on the 1st of March, 2019, ECG, acting as the beneficiary of the Demand Guarantees, has subjected the Guarantees submitted by PDS to further due diligence tests.

ECG received a letter from Al Koot, dated 16 July 2019 that claims, among other things, that the officer who executed the Guarantees from Al Koot was not authorized and that the Guarantees are null and void. The letter also stated that the officer had committed fraud.

Insider information further revealed that the alarming development resulted in meetings with officials of Ministry of Finance and ECG as well as with President Akufo-Addo.

After the meetings Government decided to crosscheck the information contained in the Disclaimer Letter by sending a Delegation of Stakeholders to Doha, Qatar, on Wednesday, 31st July 2019 to meet with officials from Al Koot.



Prior to the trip by the Government Delegation and their report, the Government, therefore, decided, as a precautionary measure, to set aside the Concession Agreement with effect from Tuesday, 30th July 2019.