PDS: Akufo-Addo stood up to America – Dep. Energy minister

Deputy minister for Energy William Owuraku Aidoo says President Akufo-Addo deserves praise for standing up to America over the PDS contract cancellation.

The government of Ghana has canceled its concession agreement with the private investor for the management of ECG despite opposition by the American government.

The Ghana government argues PDS failed to satisfy some key condition precedents under the contract.

Consequently, the US government has withdrawn the second tranche of $190million earmarked for improvement in Ghana’s energy sector under the millennium challenge compact.

Speaking to the media Wednesday, the deputy minister said the government refused to bow to pressure from the United States.

“The President took a very bold step without capitulating to the pressures of a very big friend like the US. It is a commendable move by the government notwithstanding the pressure that was brought to bear. This is not the first time this government has taken a very bold step without capitulating to the big friends like the United States of America,” he said.



The US embassy in Ghana in a statement said: ” The United States of America notes this decision with regret. Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted.

“As such, MCC has confirmed that the $190 million funds granted to Ghana at the March 1 transfer to the 20-year concession from ECG to PDS are no longer available.

“The United States underscores the importance of contract sanctity as essential to a conducive investment climate and a pre-condition for inclusive economic growth. In this spirit, the United States has worked with the Government of Ghana since the latter’s July 30 suspension of the concession in the hopes of finding a mutually acceptable solution that respected contract sanctity and the Government of Ghana’s interest in restructuring the concession,” the statement said.

Background

On March 1, 2019, Ghana Power Distribution Services, Ltd. (PDS) assumed operation and management of the staff and assets of the Electricity Company of Ghana (ECG) under a 20-year concession agreement.

According to the Millenium Challenge Compact, Private sector participation is a central reform under MCC’s Ghana Power Compact. This was critical to the long-term sustainability of related infrastructure investments and the financial recovery of the energy sector in Ghana.

The Compact comprised two tranches of funding: $308 million available upon the official start of the current Compact, and a second tranche of $190 million, which was available upon a successfully executed concession agreement, which the United States maintains occurred on March 1, 2019.

Source: Starrfm.com.gh