PDS Cleared!

The Power Distribution Services (PDS) has been cleared of all wrong doing in its controversial concession agreement following a 30-day investigation by the government

The concession agreement between PDS and the Electricity Company of Ghana (ECG) was suspended on Tuesday, July 30 by government due to “fundamental and material breaches”.

According to government, PDS failed to provide demand guarantees for such an agreement.

A full-scale investigation was, therefore, launched into the deal with ECG returning to operations.

A delegation was dispatched to Qatar and the United States as part of investigations into the deal. Already, calls were rife for the contract to be abrogated.

The Minority, for instance, petitioned the US Embassy in Accra to help in investigations while calling for an immediate termination of the deal, which was part of the Compact II of the Millennium Challenge Agreement (MCA).

On Thursday, September 5, the report on the 30-day probe into the deal was leaked.

PDS was, however, faulted for not having enough financial guarantees for the deal.

It may be recalled that the government on July 30 this year suspended the concession agreement with PDS, bringing back the Electricity Company of Ghana (ECG) to be in full control of power distribution.

According to Information Minister, Kojo Oppong Nkrumah, the decision was taken after government detected “fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence.”

He said government wants to secure ECG’s assets that were handed to PDS as part of the concession agreement.

“We have through deep intelligence detected that they have issues with those guarantees that were provided…they were not valid and as a step, we have taken measure to secure the assets of the state by suspending the concession agreement.”

The Ofoase Ayeribi MP also disclosed that the Energy Commission has moved to revoke PDS’ distribution license and allow ECG to go back to work while government undertakes a full-scale enquiry.

PDS became the first private company to manage the affairs of ECG after Ghana won the Power Compact II that will inject some $900 million into power distribution.

ECG’s struggle to make profit over many years prompted the need for a private investor for the sector.