US$140m judgment debt: Government went to sleep even when it had leverage – Former Minister

The Former Minister of Energy under the John Mahama administration, Kwabena Donkor has blamed the government for not taking its chances when the issues with the termination of the contract with Ghana Power Generating Company first arose.

He said if government had negotiated the terms of the court ruling when it first came it would not have led to the current $140 million judgment debt situation

In January 2021, Trafigura, the majority owner of the power company GPGC, secured an award after an arbitral tribunal in London found that Ghana had unlawfully terminated a contract for the installation and operation of two power plants.

“Let me concede that the government of the day can decide to terminate any contract, but there are consequences for termination. And in all agreements, there are conditions and processes for termination, and so if you do not follow the processes and conditions, particularly if the termination is not justified as ruled by the arbitration panel, then we are in trouble, and this is exactly what has happened.

“If we had negotiated the termination, we could have even taken ownership of the equipment. Unfortunately, even after the court had ruled, we went to sleep. Trafigura is still doing business in Ghana, and therefore we had some leverage at least in negotiating a payment plan, but all the way from 2021 we went to sleep,” he said on Accra-based JoyNews.

Dr. Donkor insisted that the termination did not make sense.

According to him, “the reason given in the letter of termination couldn’t have been the reason. Probably there were some other reasons that we didn’t know. In terms of the official reasons given in the letter of termination, it wasn’t tenable.

"And we advised at that time, it wasn’t just me. Others including IMANI also advised. There is also the importance of process in governance. Yes, you might have all the power and think you can do whatever you want, but there is the process, and we didn’t also go by the process” he noted.

SSD/MA

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