US$140 million judgment debt was very avoidable – Kwabena Donkor

A former Minister of Energy, Dr. Kwabena Donkor, has said the current judgment debt of $140 million hanging over Ghana’s head was avoidable.

He explained that the decision by government to terminate the Ghana Power Generating Company (GPGC) contract, which has led to the judgment debt “made no sense commercially and legally” at the time.

According to him, the contract that was negotiated with GPGC was the cheapest at the time so terminating that contract was not the best decision to have been taken.

“It was very avoidable as I have always said. Let me quickly say this. This was the cheapest of all the emergency power plants in terms of cost. It was also the shortest because it was for four years. There was no requirement for the government of Ghana to put down a guarantee, and then again, the total capacity charge made of capital recovery, fixed ONM, and non-fuel variable ONM came to 4 cents per kilowatt hour. It was the cheapest at the time of all the emergency power plants we brought in, and so it couldn’t have been on the basis of cost,” he said on Accra-based JoyNews on October 24, 2023.

Dr Kwabena Donkor also added that government’s reasons for terminating the contracts including the claim that the company did not have the necessary permt were unfounded because those were requirements for the signing of the contract.

Therefore, government was to blame for not ensuring those permits were acquired before signing the contract.

“Every contract, at least power contracts, contain conditions for termination. My worry at the time and I raised the alarm, was that the letter signed by the then Energy Minister Boakye Agyarko, stated that Trafigura or the Ghana Power Generating Company [GPGC] which was the subsidiary we had signed the contract with, had not obtained all the necessary Energy Commission permits.

“In the Power Purchase Agreement, one of the obligations of the government of Ghana was to assist the contractor in obtaining all relevant government of Ghana permits. And so, if we turn around to use that as the basis for termination it creates a problem for all of us.”

SSD/MA

Watch the latest edition of BizTech below:



Ghana’s leading digital news platform, GhanaWeb, in conjunction with the Korle-Bu Teaching Hospital, is embarking on an aggressive campaign which is geared towards ensuring that parliament passes comprehensive legislation to guide organ harvesting, organ donation, and organ transplantation in the country.