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Business News Wed, 23 Oct 2019

Termination of PDS Compact amazing news - ECG Contractors Chair

Chairman of the Greater Accra Electricity Company of Ghana Contractors Association, Ing Ofori Ampomah, has said the Power Distribution Services (PDS) compact was bound to fail.

Reacting to the termination of the contract, he said some of them saw the need to draw the attention of the government over the PDS deal, but it failed to heed to advice.

He told Kwabena Agyapong on Rainbow Radio 87.5Fm Ghana had nothing to gain from the concession because the deal and its managers had no track record.

According to him, none of the companies that have shown interest in taking over ECG belonged to any energy company in the world and therefore had do no expertise.

The deal was rushed despite concerns raised by stakeholders, he added.

He accused PDS of short changing Ghana and transferred all the profits they made abroad.

He said PDS was making money of over GHc650 million on a weekly basis.

He was of the opinion that PDS failed to execute the job they were asked to do.

Power Compact

Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.

The Ghana Power Compact would provide Ghana with a grant sum $498,200,000 to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.

About $350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.

Background

Parliament in July 2018 ratified the concession agreement between the government of Ghana and the consortium of investors led by the Manila Electric Company (MERALCO) for private sector participation in the Electricity Company of Ghana.

The arrangement was within the terms of the Second Millennium Challenge Compact, which was laid in Parliament by the former Energy Minister, Mr Boakye Agyarko, Minister for Energy.

Mr Emmanuel Kwasi Gyamfi, Chairman of the Energy committee, who moved for the committee’s report, stated that on August 5, 2014, the Republic of Ghana and the United States of America, acting through the Millennium Challenge Corporation (MCC) entered into a Millennium Challenge Compact.

He said the Compact provides for a grant of up to US$498,200,000 to advance economic growth and reduce poverty in Ghana and commit Ghana and the MCC to a five-year economic development program that will fund investments in the power sector of Ghana.

He said the programme consists of six projects namely: ECG Financial and Operational Turnaround Project, to lease out the assets of the company to private operator to manage the operation of the distribution business, including financing and procuring new investments, or partial or full privatisation.

Mr Agyarko stated that prior to the coming into office of the NPP administration, government had specified that there must be at least 20 per cent local participation in the Concessionaire’s Consortium.

He said however, upon assumption of office, the current government directed that local participation in the consortium should not be less than 51 per cent, which must be held, directly or indirectly by individuals who are Ghanaian citizen.

He explained that the shareholding structure of the Consortium include Manila Electric (Meralco) of Philippines 30 per cent, Aenergia SA, (Angola) 19 per cent, Santa Baron ventures Ghana 13 per cent, TG energy solution Ghana 18 per cent, GTS engineering Ghana limited 10 per cent and TBK Ghana limited 10 per cent.

Mr. Agyarko, further stated that the concessionaire is committed to making critical investments of at least US 580 million within the first five years to achieve the turn-around priorities of the concession arrangement.

Source: rainbowradioonline.com
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