Ghanaians woke up Wednesday morning to news of the Government of Ghana suspending a power distribution concession arrangement with the Power Distribution Services (PDS) with immediate effect.
A statement signed by Information Minister, Kojo Oppong Nkrumah, explains the decision follows the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction.
The statement goes on to say the Demand Guarantees were a key requisite for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire.
The Government of Ghana has begun a full enquiry into the matter, with outcome of the probe set to determine government’s next course of action.
The release by the Information Ministry added that government had in the meantime taken the necessary steps to ensure distribution, billing and payment services continue uninterrupted – a move which will allay the fears of many consumers.
PDS became the first private company to manage the affairs of the Electricity Company of Ghana (ECG) after Ghana entered an arrangement under the Power Compact II to inject some $580 million into power distribution.
The takeover by the consortium known as Power Distribution Services, PDS Ghana Limited took effect in March this year.
The Philippines based utility provider, Meralco, partnered AEnergia SA, an Angolan company, and three Ghanaian Companies: TG Energy Solutions Ghana Limited, Santa Power Limited and GTS Power Limited to form the PDS which is 51 percent Ghanaian-owned as required by the Government of Ghana in the arrangement.
PDS was expected to invest some $580million over a period of five years and continue its investment year after year throughout the 20-year period of the concession.
The PDS was supposed to have come in to address challenges such as distribution losses as well as revenue losses through the non-payment of electricity tarriffs.
The suspension of the Transactional Agreement between the Ghanaian government and the PDS has therefore left a fundamental question in the minds of people across the country as to whether or not the Electricity Company of Ghana would takeover the mandate of PDS and deliver on the said mandate efficiently.
Below is the full statement from the Information Ministry