We may have lost the $190 million which would have been ours if the Power Distribution Services’ (PDS) concession agreement with the Electricity Company of Ghana had not been cancelled by us, but I dare say that it was better than to have lost $3 billion worth of assets belonging to ECG if we had gone ahead.
A letter from the American Embassy in Ghana said, among others, this week that: “Based upon the conclusions of the independent forensic investigation,… the termination is unwarranted”.
That is their point of view. My understanding of the whole deal is that the Americans were/are wrong.
I base my conclusion on the letter to the Americans signed by the Finance Minister terminating the concession agreement. The letter, dated October 18, 2019, stated among others, the following facts which Yours Truly has brutally condensed for lack of space.
” A key condition under the private sector arrangement was to introduce a Concessionaire into the distribution sector, who would inject private capital into the operations of the ECG…Through an international competitive tender, Meralco of the Philippines was selected as the concessionaire. In order to satisfy the local content requirement under the transaction, a special purpose vehicle, Power Distribution Services (PDS), was incorporated in Ghana to be the operator,” it said.
Flowing from that, the Transaction Agreements were executed.
In these agreements, there were over 40 Conditions Precedent, five (5) of which were considered critical and essential. One of them was that PDS was to furnish to ECG payment securities in the form of either a Demand Guarantee or a Letter of Credit issued by a Qualified Bank.
Owing to difficulties experienced with raising a bank guarantee, PDS formally requested MiDA to accept a demand guarantee issued by an A-rated insurance company.
This was accepted. Consequently, PDS submitted the Payment Securities in the form of Demand Guarantees issued by a Qatari insurance firm, Al Koot Insurance and Reinsurance, on February 27, 2019, two days before the Transfer Date of March 1, 2019.
On June 24, 2019, ECG received from Al Koot a letter dated June16, 2019 saying, among others, that:
• Al Koot is not authorised by its constitutional documents to underwrite counter party and trade risk;
• The Demand Guarantees were not executed by authorised signatories of Al Koot;
• The letter dated March 13, 2019 forwarded by MiDA to ECG purporting to confirm the issuance of the Demand Guarantees was a misrepresentation because the signature on the letter was forged;
• Al Koot refused to accept any present or future legal obligations in connection with the purported Guarantees.
To establish whether a valid Demand Guarantee was provided by PDS, the Government of Ghana mandated its mission in Qatar to visit the official premises of Al Koot in Doha.
At this meeting with officers of the Ghana Embassy in Qatar, held on July 30, 2019, Al Koot, confirmed that:
(i) The letter was a fabrication and part of a fraud.
(ii) Yahaya Al-Nouri, the staff of Al Koot who forged the signature on the letter, had since July 21, 2019, been suspended without pay.
(iii) There was no approval by competent signatories or by the Board. The guarantees were witnessed by a junior officer of the company who had been working under Al-Nouri for only a month. The transactions, accordingly, lacked the due authorisation and approval of the company”.
(iv) “Al Koot has an underwriting policy and guidelines which require the approval of the Central Bank of Qatar. No such approval was granted by the Central Bank of Qatar.”
The ministry’s letter concluded: “On the strength of all the information gathered about the purported Demand Guarantees provided by PDS as security for the transfer, the Government of Ghana is of the firm opinion that there is no valid Payment Security”
The Americans, in a recommendation after their forensic audit, suggested that it was possible that Ghana could prevail in a lawsuit against Al Koot.
Our Finance Minister replied that “The people of Ghana would consider it highly irresponsible”.
The Americans have a right to arrive at the conclusions they did, and I grant that.
What yours truly finds untenable is the statement that “The United States underscores the importance of contract sanctity as essential to a conducive investment climate…”.
Sanctity? The Americans may know something they have not communicated to us, yet. From all the facts available, yours truly thinks that if there ever was a breach of contract sanctity, it was not by the Ghana Government.
- 5 feared dead, 15 injured in accident on Accra-Tema motorway
- Blunt and Blay: Finding ‘silence’ for Auntie Ohene from uncle Sam’s ‘noise’
- Far from silence, we suffer a culture of noise – Elizabeth Ohene
- NSMQ 2021: Presec beats Achimota, Chemu and Odorgonno SHS to be crowned Regional Champions
- Over 200 police personnel deployed to enforce mining directives across Ghana
- Akufo-Addo accepts Kissi Agyebeng’s nomination as Special Prosecutor, seeks Parliamentary approval
- Trader jailed for impregnating his physically challenged daughter
- Seatbelt has saved me 3 times – Alban Bagbin
- Our job is to fix problems; we are fixing them – Bawumia
- Police secures restraining order against #FixTheCountry protest on May 9
76-year-old prophetess burnt to death at Komenda
Nana Addo’s galamsey fight a ‘soundbite’ fight; President has failed – Sam George
Saturday is Red Cross Day
Widow with 3 kids shares how she goes through the month with ₵1000 salary
Election 2020: EC has no hands in the Techiman South disturbance – Bossman Asare
If a producer demands sex, call him out – Don Jazzy to female artistes
MP’s Murder: Judge threatens to dissolve jury over trial delays
GNECC joins calls for calm on Wesley Girls’ fasting brouhaha
Such arrogance! – John Dumelo reacts to #FixYourAttitude comments
Kwaku Sakyi-Addo: Fasting at Katanga
Driver remanded for defilement
There are no new restrictions that extinguish our rights to demonstrate – #FixTheCountry convenors to Police
Woman buries late husband with a live snake
Labourer jailed 2 years for stealing TV set
Sunni clerics call for unity among Muslims to foster Ghana’s development