General News Tue, 6 Aug 2019
The embattled power supply company, Power Distribution Services (PDS) Ghana Limited, has dismissed any foul play in its contract to distribute power in some parts of the country.PDS – a local and foreign consortium – in March 2019 took over power distribution functions of the Electricity Company of Ghana (ECG) under a concession deal that would allow it to operate ECG facilities for power distribution for the next 20 years.
However, four months into the agreement, Ghana government last week suddenly applied brake on the concession agreement, suspending the entire transaction for what it called “detection of fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.”
PDS says it’s co-operating with the relevant agencies over the brouhaha saying that the transaction was above board.
The company threw gauntlet to any individual with adverse information to come out.
PDS Board Chairman, Philip Ayesu, told DAILY GUIDE on Sunday that the outcome of the investigations commissioned by the government would clear them of any wrongdoing.
Mr Ayesu was unfazed about the hullaballoo that has greeted the transaction, saying the PDS has been following the terms of the contract signed to operate ECG facilities.
He ruled out claims that the PDS played a fast one on the government with the alleged breaches in the demand guarantee (insurance cover).
According to him, PDS engaged its bankers – Cal Bank and Donewell Insurance – to facilitate the insurance cover to the Qatar-based insurance company – Al Koot – for reinsurance.
As far as the PDS board chairman was concerned, everything was done in a transparent manner with the Millennium Development Authority (MiDA) and International Finance Corporation (IFC), the power compact transaction advisors, satisfied with process.
He said if the Qatari insurance company has problems with the transaction, it should deal with its brokers – Jo Australia Reinsurance Brokers – based in Jordan.
A document sighted by DAILY GUIDE acknowledges the execution of the demand guarantee.
“The reinsurer indicated below (Al Koot) has executed and delivered this Guarantee for the purpose of accepting rights granted to it and the obligation imposed on it by this guarantee, including without limitation, the rights and obligations contained in Sections 2 and 3 thereof,” the document believed to be the contract with Al Koot indicated.
It was signed by Yahya Al Nouri, Reinsurance Manager and witnessed by Fadi Danghouth, Reinsurance Officer and Mick Wahhes, General Manager.
Mr Ayesu wonders how a properly signed contract can be described as fraudulent and fake and said that if Al Koot has its own internal problems, PDS should not be used as a scapegoat.
According to him, ECG and other parties connected with the transaction carried out due diligence on the insurance guarantee and they were satisfied with the process and ruled out any underhand dealings.
PDS, according to DAILY GUIDE sources, paid $12.2 million as insurance premium in two tranches of $8million and $4.25 million to cover ECG assets valued at GH¢22billion.
The insurance cover was to guarantee the transfer of ECG assets before the takeover.
Government says it is dispatching investigating team to Qatar to probe the alleged breaches.
According to Information Minister, Kojo Oppong-Nkrumah, the investigations will take one month.
He said the team conducting the inquiry comprises insurance experts, officials of the energy and finance ministries, officials of ECG and 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 told journalists last Thursday.
The minister stated that while government is probing the alleged anomalies, a second team had been tasked to continue engagement with the American government through its agency – the Millennium Challenge Corporation.
He said the 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.
Meanwhile, PDS, in a press statement issued by its lawyers Minkah-Premo, says due to government’s inability to exercise restraint in the face of the alleged breaches, the Financial Intelligence Centre (FIC) has frozen its accounts.
“Had ECG and Energy Commission, and indeed government acted with a modicum of restraint and had they exercised patience to allow the original plan of dispatching a team to Qatar to investigate the alleged irregularities with the Demand Guarantees to prevail, they would have found no basis for acting in the manner in which they have acted which conduct has not only put the operations of PDS in grave danger but has also needlessly dented the image and reputation of PDS.”
“To further compound issues, the Financial Intelligence Centre has also swooped in on the strength of the conduct of ECG and Energy Commission, to freeze the accounts of PDS, an act that has all but crippled the operations of PDS and puts the supply of power to Ghanaians in the Southern Distribution Zone in grave jeopardy,” the statement said.
PDS is assuring the public that it remains committed to its mandate under the various agreements that it has with ECG and government, and will co-operate with the appropriate authorities to ensure the its rights are vindicated.
Source: Daily Guide Network