The President, John Dramani Mahama, has said that the controversial Power Distribution Services (PDS) concession deal was not fundamentally flawed but failed because of poor management and personal interests that overshadowed its implementation.
Speaking at the sod-cutting ceremony for the Multipurpose Solar Energy Project at the Dawa Industrial Park in Agotor on Thursday, November 6, President Mahama noted that the initiative, which aimed to introduce private sector efficiency into Ghana’s power distribution, collapsed due to mismanagement.
“I know there was an attempt to involve the private sector in power utility and distribution. We all remember the example with PDS. PDS was not a bad thing; it was just handled wrongly, and many people had personal interests in it. That’s why it failed,” President Mahama said. “But there is something to be said for injecting private sector efficiency into public utilities.”
His remarks come amid renewed public discourse on Ghana’s power sector reforms following the ruling by the London Court of International Arbitration (LCIA), which dismissed all claims brought by PDS against the Electricity Company of Ghana (ECG) over the termination of their concession agreement.
The PDS deal, signed in 2019 under the Millennium Challenge Compact (MCC) between the Government of Ghana and the U.S. Millennium Challenge Corporation, sought to improve efficiency and service delivery within ECG. Under the 20-year concession, PDS was to manage ECG’s assets and operations to enhance power distribution nationwide.
However, the agreement was suspended and subsequently terminated after the government discovered that payment guarantees provided by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent. Investigations later confirmed that Al Koot had not authorised the guarantees, a finding upheld by the Qatari Court of Cassation.
PDS later filed for arbitration in London, demanding over US$390 million in damages and accusing ECG of wrongful termination. ECG, represented by Omnia Strategy LLP led by Cherie Blair KC, argued that PDS’s failure to verify the authenticity of the guarantees constituted a serious breach of contract.
After several years of proceedings, the LCIA tribunal dismissed all PDS claims, ruling that the fraudulent guarantees undermined the integrity of the concession and justified its cancellation.
Meanwhile, the Ministry of Energy and Green Transition has reaffirmed its commitment to recovering all monies and assets due to the Electricity Company of Ghana following the termination of the deal.
By Ruth Serwaa Asare