Ghana: PDS Deal Failed Due To Mismanagement, Not Concept — President Mahama

Ghana’s President John Dramani Mahama has said the controversial Power Distribution Services (PDS) concession was not a bad initiative in itself but failed because of poor management and personal interests that undermined its implementation.

Speaking on Thursday, November 6, at the sod-cutting ceremony for the Multi-purpose Solar Energy Project at the Dawa Industrial Park in Agotor, the President noted that the PDS arrangement was designed to introduce private-sector efficiency into Ghana’s electricity distribution.

However, he said the deal collapsed due to how it was handled.

“I know that 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. But there is something to be said for injecting private-sector efficiency into public utilities,” President Mahama stated.

His remarks come amid renewed public debate on Ghana’s power sector reforms following the recent ruling by the London Court of International Arbitration (LCIA), which dismissed all claims filed 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 Millennium Challenge Corporation (MCC) of the United States, was intended to enhance efficiency and service delivery in ECG’s operations.

Under the 20-year concession, PDS was to manage ECG’s assets and distribution operations nationwide. However, months after assuming control, the government suspended and later terminated the contract after it emerged that payment guarantees submitted by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent.

Subsequent investigations confirmed that the guarantees were not authorised by Al Koot — a fact later upheld by the Qatari Court of Cassation. The fake guarantees, which were critical to PDS’s financial obligations, rendered the entire concession invalid.

PDS later sought arbitration in London, accusing ECG of wrongful termination and demanding more than US$390 million in compensation. ECG, represented by Omnia Strategy LLP led by Cherie Blair KC, defended its position, arguing that PDS’s failure to authenticate the guarantees amounted to a fundamental breach of contract.

After nearly three years of hearings, the tribunal ruled in favour of ECG, dismissing all PDS claims and affirming that the fraudulent guarantees struck at the heart of the agreement, justifying its termination.