Former Minister for Power, Dr Kwabena Donkor says he is not intimidated by the Attorney General’s decision to lodge a formal complaint with the Criminal Investigations Department (CID) to investigate the Power Purchasing Agreement (PPA) signed between the NDC government and Ghana Power Generation Company (GPGC).

Speaking to the media in Parliament, he said that as a Minister in charge of the agreement, he acted in the best interest of the nation, thus, he does not mind if Godfred Dame wants to investigate the deal.

“But you don’t sit on national radio as the Attorney General, and try to intimate people like me. We are not intimidated. You were all here during Ameri [investigation], they raided our homes at dawn, it amounted to nothing,” he said.

Dr Donkor said that he has no doubt that he will be vindicated after the investigations are complete.

The Attorney General, Godfred Dame on Tuesday blamed the former Power Minister and other signatories to the GPGC agreement for the $170 million judgement debt that the government of Ghana has been instructed to pay to the company, by a Commercial Court in London, for unlawful termination of the contract.

Speaking on Top Story, he said that a report by the committee established to look into the Power Purchasing Agreement established that the agreement had resulted in an excessive power supply.

This, Mr Dame added, was going to cost $586 million per annum and a cumulative cost of about $7.6 billion.

“So I think that when it comes to financial loss, it is so clear in my mind that the responsibility lies clearly with those who entered into the agreement. The basic point is that the entry into this transaction was unnecessary. The entry into this transaction was what resulted in financial loss to the state,” he added.

However, Dr Donkor said that the fault lies with the ones who cancelled the contract without abiding by the clause stipulated for potential termination.

He stated that this view was upheld by the Arbitration panel and the London Court which sat on the case.

“Assuming without admitting that there was a basis for the termination, read the report of the arbitration panel, paragraph 479 and 490, Dr Ahenkorah whose report was allegedly the basis for termination could not defend the report.”

“He says he is not sure that he even made that recommendation. So, the whole basis of even termination is questionable. The Attorney General should direct his attention to that. But if he wants me to go to CID headquarters I have been there several times and they are professionals, they are not political foot soldiers,” he added.

Background

In February 2015, the GPGC entered into negotiations with the Government of Ghana for the provision of a fast-track power generation solution.

This was to see the relocation of the GPGC Equipment from Italy to Ghana, to alleviate the effects of Ghana’s then-ongoing power shortage crisis. In June 2015, Government and GPGC signed the power agreement. 

In April 2017, a committee set up by the Ministry of Energy at the direction of the Office of the President issued a final draft report. The committee set forth for consideration the option of termination of the agreement at an estimated cost of US$ 18 million rather than the payment of an excess capacity charge of US$ 24.9 million per annum over the contract period of 4 years.

In its Summary of Proposed Modification to PPAs of Committed Projects, the Committee noted that the GPGC Project was an:

“Emergency Plant with a 5-year PPA used plant (not new) and high tariff. Major equipment has arrived at the Tema port awaiting tax exemption to clear.”

The report noted that based on the 2018-2020 demand-supply capacity balance and the tariff rank of this project, the full capacity of this project will be excess and result in an estimated total cost of USD 115.48 Million within the duration of the PPA. It, therefore, recommended that the actual development cost of the project to date should be verified and used as a guide in negotiations for termination.

In August 2017, Attorney General Gloria Akuffo issued an opinion on the agreement in response to a cabinet directive. She noted

“… It has become necessary to review the implementation of the PPAs, because should all of them be implemented as originally scheduled, it would result in the production of excess energy with its attendant cost which would worsen the financial situation of the power sector. A review would therefore help to cut back on losses that would be incurred.”

The Attorney-General noted, too, that the GPGC Project would result in costs of US$ 115,480,000, if implemented, with its attendant high tariff. On the basis of her understanding of the position, the Attorney-General considered that GPGC’s failure to obtain a licence from the Energy Commission left it with no capacity to enter into a PPA.

Read more on the PPA: Controversial Judgment Debt: Power Purchasing Agreement between Ghana and GPGC explained