The Institute of Energy Security (IES) has stated that the detection of anomalies in the Lease and Assignment Agreement between the Electricity Company of Ghana (ECG) and Power Distribution Services (PDS) which has led to a suspension of the contract was timely and saved Ghanaians the brunt of a possible full-blown fraud.
Government on Tuesday announced through the Ministry of Information the decision to suspend the Power Distribution Services from continuing to operate under the Compact II concession agreement saying the decision was necessitated by “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 due diligence”.
However, in a statement signed and issued by its Executive Director Paa Kwasi Anamuah Sakyi, the Institute of Energy Security said “it is the contention of the Institute for Energy Security (IES) that but for the timely intervention of the United States Government and the Millennium Development Authority (MiDA), a full-blown ‘fraud’ would have been perpetrated on the Ghanaian people”.
According to the IES, PDS failed to demonstrate capitalization for even the first year of their operation and had instead proposed to MiDA and ECG against the terms of the contract to use Insurance Companies with reinsured guarantees serving as ‘qualified banks’ to help them raise the Letters of Credit, which they were unable to meet.
While commending the U. S. Government and the Millennium Development Authority for their role in the detection of the ‘fraud’ and subsequent suspension, the Energy Think Tank believes the issue would have been swept under the carpet to be ‘secretly micromanaged’ by government functionaries.
IES further revealed that the 51 percent Ghanaian ownership in the deal which comprises TG Energy Solutions Ghana Ltd, Santa Power Ltd and GTS Power Ltd did not have the financial and technical muscle to partake in the deal.
“On the back of these, IES is calling on government to disclose fully the details of the beneficial ownership of these Ghanaian companies that have proven to be financially not-fit-for-purpose.
We also wish to call for a full enquiry into the circumstances that led the government functionaries to ‘bend the rules’ to favour PDS Ghana by waiving away some ‘Conditions Precedent’ before the takeover to ‘Condition Subsequent’, which was a serious breach of the LAA. Had the ministry of Energy et al done its own basic ‘due diligence’ based on ‘Conditions Precedent’, we wouldn’t have come to a point where the concession stands suspended over a dubious insurance guarantee which should have come before the takeover,” the statement added.