Ghana govt stands ground against US over PDS agreement termination

Amid the outcry over the botched concession agreement between the Electricity Company of Ghana (ECG) and Power Distribution Services (PDS), the Government of Ghana has stated clearly that it can’t compromise on the termination of the agreement.

This follows the United States government’s expression of “regret” over the termination and its stated position that the termination is “unwarranted” and hopes the Ghana government respects contract sanctity to restructure the concession.

They added that “the US$190 million funds granted to Ghana at the March 1 transfer to the 20-year concession from ECG to PDS are no longer available.”

Minister of Information Kojo Oppong Nkrumah said in a press briefing on Wednesday that the government can’t compromise because they are advised that the concessionaire failed to meet a material and fundamental term of the concession agreement.

“The Ghanaian and American sides regret that we could not find a mutually agreeable path to have concluded the utilization of the full US$498 million. On the Ghana side, we are not able to compromise because we are advised and believe same to be true, that the concessionaire failed as initially suspected to meet a material and fundamental term of the concession agreement which was to deliver and maintain valid payment securities for the transfer of assets.

“The two sides were not able to agree on a common path to resolve this point. The Government of Ghana consequently from 9am this morning commenced the processes to terminate. The necessary documentations are being filed with PDS and the Energy Commission at the moment. It is expected that residual matters between EC and PDS will be resolved with dispatch. The Government of Ghana and the US Government will continue to work together on other development cooperation projects,” he said.

Deputy Energy Minister William Owuraku Aidoo, on the other hand, said the Electricity Company of Ghana (ECG) is expected to take back full control of assets after the termination of the Power Distribution Services (PDS) concessionaire agreement by Government.

According to him, the Sales and Retail of Energy License of PDS will today October 23, be terminated by the Energy Commission to allow ECG to take back full control of assets.

“ECG has written to the Energy Commission informing it of the termination of the agreement between both parties and when all these things have been effected, ECG will assume full control of the assets which has previously been in possession of PDS,” he stated.

When asked what happens to the workers of PDS, the minister explained that once there were no transfer and demand guarantees in place as of March 1, 2019, the workers of PDS will still remain the workers of ECG.