Ghana government suspends agreement with PDS after due diligence
The government of Ghana says it has suspended its agreement with Power Distribution Services (PDS) Ltd, due to what it calls, fundamental and material breaches of PDS’s obligation, in the provision of Payment Securities (Demand Guarantees) after it conducted its due diligence.
This is according to a statement by the Ministry of Information.
“It is this due diligence that has alerted us to the fact that, the validity of some of the Guarantees are in question and we have moved therefore to suspend it, pending a full scale enquiry,” Kojo Oppong Nkrumah, Information Minister speaking on PM Express, a current affairs show on Joy TV.
The Minister added on the same show that, the Energy Commission has moved to revoke the distribution license of PDS.
The statement added that government is conducting an enquiry into the matter, which in the end, would influence subsequent actions.
It said the Demand Guarantees from PDS were instrumental for the lease of ECG asserts that happened on March 1, 2019 and that government is working, to secure ECG asserts given PDS, as part of the agreement.
The public it said, are to be assured of no interruption in electricity services.
According to government, the Electricity Company of Ghana (ECG) would in the interim, take back part of its previous job in electricity distribution.
Meanwhile, in a response to government, PDS says it would comply with the terms of the transaction agreements executed between it and ECG on one hand and government of Ghana, through the Ministry of Finance on the other hand.
PDS surfaced when the Millennium Development Authority (MiDA) was tasked to select a competent and viable company to take-over the ECG. On April 10, 2018, MiDA selected Meralco Consortium from Philippines as the winner of the ECG PSP out of six bidders after a competitive bidding process to partner PDS Ghana Limited.
PDS Ghana Limited comprised AEnergia SA, an Angolan company, and three Ghanaian firms – TG Energy Solutions Ghana Limited, Santa Power Limited and GTS Power limited, which have 51 per cent shareholding, while Meralco Consortium owned 49 per cent.
By Gifty Danso