Government has terminated the Power Distribution Services concession agreement with the Electricity Company of Ghana with immediate effect, Information Minister Kojo Oppong Nkrumah has announced.
The minister told a press conference in Accra Wednesday morning, “Government has commenced the necessary process to terminate the agreement.” The process started at exactly 9:30am, the minister said.
This comes after days of back and forth the government of Ghana had with the Millennium Challenge Corporation (MCC) over the concession agreement with PDS.
Government in a letter dated October 18, 2019 to the MCC announced its decision to terminate the PDS agreement which came into effect on March 1, 2019 and saw PDS take over the management of Ghana’s major power distribution company, ECG. Government arrived at this decision after its investigations found that PDS entered the agreement with a forged document, which is the demand guarantee classified as “condition precedent” in the agreement.
But Ghana’s decision did not sit well with the US government which has given the Ghana government October 30 to reverse the decision or face the consequences of the decision, which will be to lose 190 million dollars under the MCC Compact II. Ghana would not also be considered for the MCC Compact III.
But Kojo Oppong Nkrumah explained that government took the difficult decision to terminate the PDS agreement because “the two sides were not able to agree”.
He therefore said the procedure to revert everything back to the ECG would be done with “dispatch”.
He however maintained that the government of Ghana and the USA would “continue to work together in other areas of cooperation”
Mr. Oppong Nkrumah also clarified that government was “never” “negligent” in the whole PDS concession agreement following the failure of the concessionaire to meet certain conditions precedent.
He also maintained the decision of the American government to cancel the power compact agreement with Ghana was “not a crisis of confidence, but difference in opinion”, which both parties have “agreed to respect” each other’s position.
“The decision that the government has had to take, as difficult as it is, despite the significant international pressure, is necessary in our view to protect and preserve the assets of ECG and Ghanaians,” the minister asserted.
The termination would not result in any job loss, he stressed.
By Isaac Essel | 3news.com