John-Peter Amewu

Ghana’s former Minister for Energy, John-Peter Amewu has insisted that Government’s decision to terminate the agreement between Electricity Company of Ghana (ECG) and Power Distribution Services (PDS) Limited was appropriate because the latter engaged in fraudulent act.

His strong position on the matter was premised on the failure of PDS to satisfy conditions precedent under the relevant transaction documents.

The former Minister who is now a Member of Parliament (MP) for Hohoe constituency was responding to a question on the subject matter posed to him by Samuel Okudzeto Ablakwa, MP for North Tongu, when the former took his turn before the Vetting Committee of Parliament last Wednesday.

Taking his turn to vet Mr. Amewu, who appeared before the Committee as Minister-designate for Railway Development, Mr. Okudzeto asked: “On October 19, 2019, the Millennium Challenge Authority (MCA) terminated the PDS agreement. Ghana lost US$19 million in effect. You had said earlier, on August 15, 2019, that you discovered fraud in the whole PDS agreement.

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Considering how Ghana had managed the Compact in the days of Presidents Kufuor, Mills and Mahama, will you say that there was some lack of due diligence on your part which led to Ghana incurring this loss?”

But before he would respond to the statement on the matter as attributed to him by his colleague MP, Mr. Amewu said: “Yes, it is on record that the Government of Ghana (GoG) terminated the relationship between the PDS and ECG.”

Then, in his explanation, the Hohoe MP said: “The relationship between the PDS and ECG, under the agreement, was that there were certain conditions called the Condition Precedent that were supposed to occur before the transfer of Ghana’s assets to PDS. It came out clear that one of the critical items which had to do with the security of the assets was not genuine and not valid.

“I, therefore, described it as fraudulent because from the source where we were supposed to get the guarantee, they, themselves, described it as such, for they stated that they were not in the capacity to issue that high level of guarantee…the person who issued the guarantee did not have the capacity.”

The termination of the agreement was reported to have resulted in Ghana losing US$190million and that, Mr. Amewu explained was money coming from the United States of America of the MCA Compact.

He posited: “But, do we look at the opportunity cost or the money irrespective of what would happen? The government considered the value of the asset and its ownership over the US$190 million. On that basis, the ECG and the government thought that leaving an asset value of about US$3 billion to PDS where the security of that asset could not be guaranteed, would not be good.

“If the ECG handed over the GoG’s asset, it could not go back for it in the event of default because the basis for the recovery would have been invalid. So, the best the government could do was to get out of the marriage. Indeed, the guarantee they had to issue needed to go through the national system, and all those were not done when we went for the verification exercises. It is on that basis that I described the deal as fraudulent and I do not think the GoG, in the long run, lost anything. So, the termination of the PDS agreement was triggered as a result of the occurrence of certain lack of material evidences which they (PDS) failed to provide.

He said the ECG drew the attention of PDS to those concerns on guarantee precedent “but since the matter is in court, I beg not to go far.”

John-Peter Amewu though accepted responsibility for the decision to terminate the agreement based on the advice by the Attorney General, he refused to go down alone so he sharply said: “It is a Cabinet decision I implemented.”


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