The New Patriotic Party (NPP) Member of Parliament for Adansi Asokwa, K. T. Hammond, has urged the government to remain resolute in its decision to terminate the Lease and Assignment Agreement (LAA) as well as the Bulk Supply Agreement (BSA) between the Electricity Company of Ghana (ECG) and Power Distribution Services (PDS).
Interacting with journalists on the sidelines of Parliamentary sitting, Wednesday, October 23, 2019, over the termination of the ECG-PDS, Mr. Hammond said under no circumstances should the government think about the US$190million it will lose as a result of the position it has taken, noting that nothing better would have come out of the deal if the status quo had remained.
“I am excited that the government has terminated the PDS deal. You were worried about US$190 million to a sovereign country like Ghana. What is US$190million to a sovereign country like Ghana? I am excited at least that belatedly though that a decision has been taken that PDS deal has been terminated. I am sad that this thing went to the extent that it did. I had thought that the John Mahama PDS deal from 2014-2016 was a bad idea. At a point in time it was going to be a straight sale of ECG to some private entrepreneurs and in the end it came to a concession. ECG encapsulated a certain amount of the sovereignty or security of Ghana and it was quite troubling that a decision was made that it should get into this compact arrangement”, he said.
The government in a statement dated Friday, October 18, 2019, signed by the Minister of Finance, Ken Ofori Atta, announced the termination of the 20-year power concession agreement between the ECG and PDS agreement over irregularities found with the latter’s demand guarantee.
The government had earlier in August 2019 announced a suspension of the contract but PDS continued to operate even though they were not in charge of power distribution.
The termination of the private sector participation transaction agreement by the government was also affirmed by the ECG in a statement it released on Wednesday, October 23, 2019. If further announced taking assuming full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect.
“Consequently, all activities which were hitherto undertaken by PDS have reverted to ECG”, the statement in part further announced.
Following the takeover of the full operations of PDS by ECG, Mr. Hammond said it would be better for the government to as a matter of urgency pay all its indebtedness to the state utility company to enable it operate efficiently.
“Government should make sure that all its indebtedness to the ECG is paid. You have no idea how much the government owes ECG. All the state institutions or whatever, it is the government’s responsibility to pay so that the ECG is able to pay all its power producers. But now that we are back to square one, I would recommend that as a matter of urgency, we put them on the right footing, give them the money, pay their indebtedness and make sure that ECG is well on its feet”.
He added “I have no difficulty at all with any structure that the ECG will put in place to enhance their profitability and of course their vitality. I have no difficulty with that at all. I am not sure about the mechanism or how they go about it but I am sure that they will be able to put in place sound management and then adopt sound practices as have been adopted by GOIL and GCB. I want ECG to operate and operate properly”.