PDS deal termination: Gov’t can recoup lost $190m in 6 months – Kofi Bentil

Wed, 23 Oct 2019 Source: www.ghanaweb.com

Vice President of policy think tank, IMANI Africa, Kofi Bentil, has lauded government for standing their ground despite pressures from the US government. He also commended government for terminating the PDS concession agreement.

Describing the move as the right one, Mr. Bentil noted that there was no cause for alarm since government could recoup the $190m which the US government withdrew following the cancellation of the contract with the Power Distribution Services from oil revenue.

Kofi Bentil tweeted: “$190m, we make that from 6 months of Oil revenue!

I support The Gov’ts decision to correct the PDS mess and do things right!!”

Finance Minister Ken Ofori Atta during a presentation to Parliament last year disclosed that Ghana was set to benefit from oil revenue with the sum of $1,1billion in 2019.

In a breakdown of the figures he explained that Ghana would get US$227.10 million from Royalties, US$602.80 million from the Carried and Participating Interest, US$249.60 million in Corporate Income Tax and US$1.10 million from Surface Rentals.

Of this amount, he said US$404.90 million will be ceded to the NOC for its Equity Financing Cost, US$320.10 million, and share of the Net Carried and Participating Interest, US$84.80 million) while US$473.0 million will be allocated to the Annual Budget Funding Amount (ABFA).

The Ghana Petroleum Funds (GPFs) is also expected to receive US$202.70 million. The GPFs’ receipts will be distributed between the Ghana Stabilisation Fund (US$141.90 million) and the Ghana Heritage Fund (US$60.80 million).

The US government on October 19 released a statement disclosing that it had halted the release of $190 million granted to Ghana following the termination of the concession agreement with Power Distribution Services (PDS).

Citing a reason for the withdrawal, the statement, issued by the US Embassy described the termination of the PDS deal as unwarranted.

They noted with regret, government’s decision to terminate the contract, maintaining that the deal was valid despite claims that portions of it were valid.

"The United States of America notes this decision with regret. Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted," the statement said.

"As such, MCC has confirmed that the $190 million funds granted to Ghana at the March 1 transfer to the 20-year concession from ECG to PDS are no longer available".

In a related development, ECG has announced it has “assumed full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect."

This comes after government’s termination of its concession agreement with Power Distribution Services (PDS) on claims of fraud.

In a statement copied Ghanaweb, ECG said “All stakeholders and customers should therefore engage ECG in their normal business activities which include but are not limited to metering, billing, distribution of bills, bill reconciliation, revenue collection, new service connections, disconnections and reconnections, faulty meter replacements, network faults and repairs, network operations, maintenance, expansion and rehabilitation, complaints and fault reporting to the call centres, and any other related services.”

It further directed that "all payments in respect of power purchases and other related activities should take place at ECG Regional and District Offices, ECG existing Customer Service Centres, ECG licensed vending stations, ECG operated Cash Points and ECG authorised Banks.

Source: www.ghanaweb.com
Related Articles: