The Government of Ghana should not be in a haste to sign a new agreement as far as power distribution in Ghana is concerned if eventually, the agreement with PDS is cancelled, Dr Kwabena Donkor, Former Power Minister, has advised.
He said government will need to reflect on the whole agreement and arrive at a better option for the nation.
The government of Ghana announced its intention to terminate the concession deal with PDS. The consortium was responsible for the management and operations of ECG.
But it appears the government letter dated 18 October 2019 signed by Finance Minister Mr Ofori-Atta to the MCC on its decision did not go down well with the MCC.
“…Government remains strongly committed to the Compact and to private sector participation in the Electricity Company of Ghana…
“The current concession had to be terminated in view of the facts uncovered regarding the failure by PDS to satisfy conditions precedent under the relevant transaction documents AND, however, that every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the Compact.”
Read copy of govt’s letter here
When asked whether this move by the government was good news for Ghana, Dr. Kwabena Donkor told Winston Amoah on Sunrise on 3FM, Tuesday 22 October, 2019, “Unfortunately I wouldn’t call it a good news because we ought never to have gotten to that stage. PDS as [put] together could not meet the conditions precedents, they could not provide the needed security prior to taking over our GHS22b assets.
“The termination when it happens gives us the opportunity to take a step back, it gives us the opportunity to pause. First of all, with our immediate PDS experience, wouldn’t it be better if we examine other options rather than rush into another decision?”
He recalled that the Power Sector Reform programme was approved by cabinet as far back as 1995 and the component of the power sector reform programme was the modernization of the ECG in terms of even its structure.
Under the programme, ECG was to be turned into a Holding Company and then Special Business Unit (SBU) registered as limited liability companies established under the holding company.
“These companies were to be responsible for geographical areas on a commercial basis. Somehow we avoided doing this.
“This what we thought through without any compulsion by any external body but we have not done that.”
Meanwhile the Millennium Challenge Corporation has, in a letter to Ghana’s Minister of Finance Mr Ken Ofori-Atta, requested the government of Ghana to reinstate the Power Distribution Service concession right by 30 October 2019.
When that is done, MCC says it will release to MiDA, the remaining190 million dollars under the Compact 2 and also permit such funding to be committed to approved contracts under the Compact.
It has also asked Ghana to cause its Energy Commission to lift the suspension of PDS retail supply license.
“Once this is done, the MCC will authorise the resumption of activities towards the development of a regional compact,” which Ghana has expressed interest in benefiting, the letter said.
Source: 3news.com | Ghana