The Attorney General says the kind of Power Purchasing Agreement signed between the erstwhile NDC government and Ghana Power Generation Company (GPGC) has exposed the country to a financial loss.
According to Godfred Yeboah Dame, some clauses in the agreement made government liable for paying a huge amount of money whether the deal became effective or otherwise.
His comment comes after a London-based United Nations Commission on International Trade Law tribunal issued its final award, ordering government to pay $170 million in damages to GPGC for failing to meet set deadlines in contesting alleged unlawful termination of a contract between the two parties.
Subsequently, Ranking Member on Parliament’s Energy Committee, John Jinapor, blamed former Energy Minister, Boakye Agyarko, for causing the financial loss to the state.
Mr Jinapor, in an interview, said government did not plan effectively to defend its decision to terminate the contract.
“Government didn’t take the matter seriously. So, first of all, I believe it was wrong to have terminated the agreement the way and manner in which this government went about it.
But speaking on Joy FM’s Super Morning Show Wednesday, Mr Dame said the signatories of the agreement which was commenced under the former President John Mahama’s administration failed to undertake a conclusive work to protect the public purse.
“If you look at the agreement and the manner in which it was done, irrespective of whether it was terminated or it became effective, the government was exposed to a financial loss. And that is the problem.
“So that is why we are where we are. We are here we are because the agreement contained clauses which rendered the government liable of payment of huge sums of money even if the agreement had not become effective,” he told hosts Kojo Yankson and Winston Amoah.
In February 2015, the GPGC entered into negotiations with the Government of Ghana to provide a fast-track power generation solution.
This was to see the relocation of the GPGC Equipment from Italy to Ghana, to alleviate Ghana’s then-ongoing power shortage crisis.
In June 2015, the Mahama government and GPGC signed the power agreement, which was ratified by Parliament in July 2015.
But in April 2017, news emerged that the new administration was taking steps to review and terminate existing Power Purchasing Agreements entered into by the previous government that were no longer considered necessary to meet Ghana’s ongoing power needs.
GPGC protested and rejected Government’s purported termination of the agreement.
Between March and April 2018, exchanges between GPGC and government ended with an indication from the Deputy Minister of Power, William Owurako Aidoo that the President of Ghana had given verbal approval to the reinstatement of the agreement and that the Minister was “actively working” with the Attorney-General to resolve the issue.
GPGC then resumed work at its site. In July 2018, however, GPGC was informed by the Deputy Minister for Power that the agreement was not to be reinstated and that GPGC must negotiate a new agreement.
By August 2018, the GPGC accepted government’s repudiation of the agreement. GPGC then decided to drag Government to the Arbitral Tribunal in London as provided for in the agreement.
Following the hearing, the Arbitrator awarded GPGC a total of $170 million regarding its Early Termination Payment claim.
Meanwhile, Mr Dame has disclosed his intention to lodge a formal complaint with the Criminal Investigations Department (CID) to investigate the Power Purchasing Agreement.
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