The African Centre for Energy Policy (ACEP) has blamed the Millennium Development Authority (MiDA), for what it describes as the gross negligence in the award of the concession agreement to Power Distribution Services (PDS).
MiDA was established to oversee, manage and implement the programmes under the Millennium Challenge Account for poverty reduction through economic growth, as set out in each agreement between the Government of Ghana and the Millennium Challenge Corporation (MCC).
The financial and operational turnaround of the ECG was part of the various projects and programmes MiDA was to implement. This they did, which led to the award of the Electricity Company of Ghana (ECG) concession to PDS.
But it has been found that the demand guarantees PDS presented, may have been fraudulently procured.
The concession has been suspended and investigations are currently underway into how those breaches occurred.
ACEP believes that MiDA failed to act diligently while handling the concession which saw PDS take over the services of the Electricity Company of Ghana (ECG).
Enegy Minister, John Peter Amewu said government was forced to sign the agreement
Addressing a press conference Accra, ACEP claims MiDA bent the procedures to create room for the consortium to win the bid even though they did not meet the conditions.
Executive Director for the energy think-tank, Ben Boakye, said “ACEP is deeply worried about the level of negligence that has led to the current situation.
“Indeed, the finest conclusion anyone can give is that this represents the summary of the posture of MiDA leading to the granting of the concession,” he said.
Mr. Boakye added that while ACEP supported the private sector participation in the distribution of electricity, the process which started with deep stakeholder consultations took a deep dive into secrecy.
ACEP noticed this and attempted to engage MiDA to highlight “dangerous path MiDA was treading” but that proved futile.
All cautions from ACEP, he indicated, were ignored and although concerns were raised about the quality of the process which saw Philippines-based Meralco Consortium – the parent company of PDS – win the bid without competition, although it didn’t meet the initial requirement to have 51% local content.
“ACEP also questioned the quality of the companies that formed the PDS consortium to take over the assets of ECG. Apart from Meralco, the other parties in the consortium were not known, which was enough basis for MiDA to be meticulous in checking the background of the companies to ensure that they, at least, have the financial capacity to assume the business with a cash flow of$4billion.”
While the issue is being investigated, ACEP believes that, had MiDA and transactional advisors, International Finance Corporation (IFC), showed the slightest seriousness and placed Ghana first, it would have found the contested document suspicious.
In case the allegations levelled against PDS are found to be true, ACEP which commended government for its swift reaction to protect the public purse said, MiDA should not be allowed to go scot-free.
The think-tank wants the immediate interdiction of the leadership of MiDA to prevent tampering with evidence that may be necessary to support the case of the State.
“Cease with immediate effect the consumption of advice from the IFC on the transaction. This is because the IFC has proven incapable of defending the interest of its clients; MiDA and Government of Ghana.
“Immediately Audit the background of the beneficial owners of the local partners to PDS,” Mr. Boakye said.