Gov't begins inquiry into PDS breaches

Gov't begins inquiry into PDS breaches
Source: Ghana | Myjoyonline.com | Abubakar Ibrahim | abubakar.ibrahim@myjoyonline.com
Date: 01-08-2019 Time: 04:08:11:pm
Kojo Oppong Nkrumah, Information Minister

Government has commenced a full scale inquiry into the detected breaches in the concession agreement with the Power Distribution Services (PDS), which is expected to be completed within 30 days.

According to the Information Minister, Kojo Oppong Nkrumah, the team conducting the inquiry comprises insurance investigation experts, officials of the Energy and Finance Ministries and officials of the Electricity Company of Ghana (ECG) as well as Millennium Development Authority (MIDA). 

“The inquiry will determine the nature of the breaches and advise on suggested next steps. By Tuesday, the team is expected in DOHA-Qatar as part of the inquiry. All interested parties are cooperating with the inquiry at this stage,” the Information Minister said at a press conference in Accra, Thursday, August 1.

He said the team conducting the inquiry comprises insurance investigation experts, officials of the Energy and Finance ministries and officials of the ECG and MIDA.

Government has suspended the concession agreement with PDS, bringing back ECG to be in full control of power distribution.

The decision was taken after government detected fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which have been discovered upon further due diligence.

Many people including the Minority in Parliament and Energy experts have called for probe into how come government missed this critical aspect when signing the agreement. 

Giving details on government’s next line of action, Mr Oppong Nkrumah said the inquiry will determine the nature of the breaches and advise on suggested next steps.

“By Tuesday, the team is expected in DOHA-Qatar as part of the inquiry. All interested parties are cooperating with the inquiry at this stage. A second team has been tasked to continue engagement with the American government through its agency the Millennium Challenge Corporation,” he said.

The Ofoase Ayeribi MP said the engagement is about the possible next steps after the inquiry and channels for sharing information as part of this inquiry. That team is expected to also be in the USA possibly next week as part of their engagement.

He added that final efforts to ensure a smooth transition between ECG and PDS officials are proceeding without incident.

He disclosed that the PDS breach was discovered by the due diligence of Ghanaian authorities through ECG and with the support of state agencies.

“For the avoidance of doubt, the provision of the payment guarantee has always been a condition precedent and was never changed to a condition subsequent as being speculated by some persons,” he said.

PDS 1


According to him, the initial due diligence led by the transaction advisors did not detect anything wrong with it.

However, “the second level checks (this time led by the Ghana side) initially yielded a response from Al-Koot confirming the guarantee.
“It was a third level check by the Ghana side that detected anomalies within Al-koot thereby triggering a fourth level check,” Mr Oppong Nkrumah said.
The fourth level check involved sending an initial team from the Ghana Mission in Qatar to engage with Al-koot officials for further verification. 

This fourth level further proved the anomalies and suggested untoward action which is now the subject of the full scale inquiry.

Government will update all stakeholders on the outcome of the inquiry and proceed in accordance with law and the terms of the agreement as it works towards a final resolution of this matter.