The Government of Ghana has terminated the concession agreement the Electricity Company of Ghana (ECG) signed with Power Distribution Services (PDS) Ghana Limited, energynewsafrica.com can confirm.
According to sources within the Ministry of Energy and the seat of government, Power Distribution Services Ghana Limited, which has become the subject of discussion following the government decision to suspend its operations, will not be allowed to continue as as a power distributor.
“I can tell you that PDS is not going to continue. The contract has been terminated,” the source revealed.
“The suspension was just procedural, ” it added.
The Electricity Company of Ghana, acting on behalf of Government of Ghana, signed a concession agreement with the Power Distribution Services Ghana Limited on March 1, 2019.
The move was in line with Millennium Challenge Corporation’s Power Compact II which required private sector participation in the West Africa country’s power distribution business.
However, barely five months of operations, the Government of Ghana, through the Information Minister, Kojo Oppong Nkrumah, announced the suspension of PDS.
In a statement, government said the suspension was as a result of what it described as ‘fundamental and material breaches of PDS’ obligation in the provision of Payment Securities for the transaction’ which had been discovered upon further due diligence.
The statement said a full-scale enquiry into the power concession agreement with PDS Ghana Limited had begun and was expected to last for 30 days.
The statement also said the government had taken steps to ensure that distribution, billing and payment services were not interrupted, and assured the public that the development would in no way interfere with the distribution of electricity services to customers.
Ghana’s electricity regulator, Energy Commission, last week, withdrew EC/ESL/ 02-19-001 licence, which the commission issued to PDS following the transfer and appointed ECG as the interim operator of the electricity retail sales function in the southern zone under license number EC/ESL/02-19-001.
According to the Commission, its decision was based on the validity of the said licence becoming impaired due to the suspension of the operation of Power Distribution Services (Ghana) Limited over some breaches in the concession agreement signed with the Government of Ghana.
Energynewsafrica.com can also confirm that government plans to use the law courts to punish those who allegedly played various roles in the procurement of purported fake documents used by PDS to secure the deal.