Energy Minister & Deputy Gagged Over PDS Scandal

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There has been an unusual development in the Power Distribution Service (PDS) saga with the rather vocal Energy Minister, John Peter Amewu and his Deputy; William Owuraku Aidoo, visibly silent soon after declaring the consortium to manage the Electricity Company of Ghana (PDS) as having acted fraudulently.

The Herald’s highly placed source disclosed that the alleged fraud,was reported after the chargé d’affaires in Ghana’s embassy in Qatar, was sent by ECG to confirm the authenticity of an insurance guarantee submitted by PDS from Al Koot.

Strangely, the Ministry Finance is now in-charge of all PDS and electricity-related matters, including signing documents, de-freezing a CAL bank account and also authorizing the arrangements between the consortium and the ECG to continue, although the Ministry of Energy, had been the supervisory ministry in the negotiations.

Indeed, William Owuraku Aidoo, the Deputy Energy Minister, was an active participant in meetings on the transaction, including those his ministry held with Parliament’s Joint Committee of Finance, Mines and Energy led by Member of Parliament from Odotobri, Emmanuel Akwasi Gyamfi ,when the then Energy Minister; Boakye Agyarko, met the committee.

But the unusual development, has seen a deputy finance minister, Joseph Aidoo Boahen, saying the Ministry of Finance is facilitating the de-freezing of bank accounts belonging to PDS. The Energy Commission, has also had its position weakened by the new development and strangely usurped by PDS and ECG.

A letter from the Finance Ministry to PDS, ECG, Energy Commission, PURC and copied other sector institutions stated that: “The Ministry of Finance is currently facilitating the de-freezing of PDS accounts to ensure that there are funds to support the day-to-day operations.”

The Finance Ministry’s letter dated August 6, 2019 said the move is in “pursuant to the Energy Commission’s appointment of ECG as the interim operator of the electricity retail sales license in the southern distribution zone.”

The Finance Ministry, said ECG would exercise oversight responsibility over the movement of funds from all PDS bank accounts, as part of measures put in place to ensure smooth operation, adding “PDS will continue to operate their existing bank accounts. PDS must lodge all cash and cheque collections into the bank accounts intact. No staff of PDS is permitted to keep any cash/cheque collected.”

The Finance Ministry, directed that, ECG, must also be provided with detailed revenue collection and expenditure report on a weekly basis and the relevant bank statements “to support same at the close of business daily. ECG must approve all payments, transfers and disbursement of funds from the PDS bank accounts before they are effected.”

The Ministry, said such approval must be provided by ECG within 24 hours of the request being made and shall not be unreasonably withheld, stressing “ECG must on a daily basis be furnished [by PDS] with details of outflows from the revenue accounts.”

The Finance Ministry, said the arrangement was not to undermine the authority of PDS to disburse funds but “to ensure transparency in the operations of the revenue accounts, which are to be controlled by ECG during the period that the suspension of the electricity sales license to PDS is in force.”

The Energy Commission, which had on July 31, 2019 written to appoint ECG as interim managers and operators of Electricity Sales License number EC/ESL/02-19-001 issued PDS, is also missing in the public space over the PDS scandal, allowing the PDS and ECG, to run their own show.

Interestingly, same PDS, had snubbed attempt by the Energy Commission to check and ensure its obligations under the transaction are met.

However, instead of adhering to the July 31, 2019 instructions of the Energy Commission, ECG, rather issued a joint statement with PDS, saying the latter will provide all activities related to electricity retail as an interim arrangement “to ensure that there is no disruption of power supply and service delivery” to customers.

The Energy Commission,as the regulator, did not make any input in the joint statement which said “Following the issuance of Public Notice No. 030819 by the Energy Commission appointing Electricity Company of Ghana Ltd as Interim Operator to take charge of management and operation of electricity sales and the retention by Power Distribution Services Ghana Ltd of the Electricity Distribution License in the Southern Electricity Zone of Ghana, ECG and PDS, have agreed on interim operational modalities”.

“This is to ensure that there is no disruption of power supply and service delivery to our cherished customers” adding “as an interim arrangement, the public is hereby notified that PDS will provide the following services on behalf of ECG:All activities related to electricity retail sale including but not limited to:Meter reading, BillingDistribution of bills, Bill reconciliation, Revenue collection, New service connections, Disconnections and reconnections, Faulty meter replacements, Network faults and repairsComplaints and fault reporting to the call centres, Any other related service.

The statement said that “In light of the above, all payments and other related activities shall continue to take place at:PDS Regional and District offices, PDS existing Customer Service Centres, PDS licensed vending stations, PDS operated Cash Points, Banks. All cheques shall be issued in the name of “Power Distribution Services Ghana Limited”.

This interim arrangement, shall be in force from August 8, 2019, until the reversal or otherwise by the Energy Commission.

ECG and PDS assure the general public that we will continue to provide quality electricity services to our cherished customers.

All enquiries should be directed to PDS Call Centre No. 0302-611611 and all existing social media handles.

Again, interestingly, as this arrangement was ongoing, President Akufo-Addo, had made a surprised trip to Angola, where he said the deal had been suspended in the interest of the country, pending a probe.

Many have since questioned the rationale behind the trip and an address to the Ghanaian community there, having in mind that there is an Angola company involved in the concession called AEnergia-Angola.

The government of Ghana on July 30, 2019, suspended a concession agreement with PDS for distribution of power in Ghana with immediate effect following what it said was the discovery “of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees).”

Government later announced that it had launched a full-scale inquiry into the breaches and a committee made up of experts comprising insurance investigation experts, officials of the Energy and Finance ministries and officials of the ECG and MIDA as well had 30 days to complete the probe.

John Peter Amewu, subsequently said investigations conducted by the government, had established that some of the documents presented by PDS as a guarantee for the takeover were forged.

Meanwhile, the Chairman of the Public Interest and Accountability Committee (PIAC), has questioned the process that gave 51percent majority shares of PDS to Ghanaians.

Dr. Steve Manteaw, said Santa Baron Ventures Ghana, TG Energy Solution Ghana, GTS Engineering Ghana Limited and TBK Ghana Limited, were not evaluated before being picked to hold majority shares.

He said this on the back of material breeches leveled against PDS by the government, in relation to insurance guarantees tendered to secure some $18b assets belonging to ECG.

On July 24, 2018, Parliament approved the concession agreement between the government and the consortium led by the Manila Electric Company (Meralco).

The shareholding arrangement of PDS is Manila Electric (Meralco) of The Philippines, 30 per cent; Aenergia SA (Angola), 19 per cent; Santa Baron Ventures Ghana, 13 per cent; TG Energy Solution Ghana, 18 per cent; GTS Engineering Ghana Limited, 10 per cent, and TBK Ghana Limited, 10 per cent.

Until its suspension, the PDS, was responsible for managing the retail and distribution business of the ECG since March this year.

But speaking yesterday, on the Super Morning Show on Joy FM, Dr. Steve Manteaw, said the crisis PDS is currently battling with, only goes to show that the majority shareholders lack the capacity to manage an investment as huge as the Electricity Company of Ghana.

He also told Daniel Dadzie, host of the SMS that the local partners lacked the financial muscles to invest $100,000,000 dollars annually for a period of five years to improve the fortunes of ECG.

Dr. Manteaw blamed the situation on the opaque and skewed manner the Millennium Development Authority (MiDA), the body responsible for managing the ECG/PDS concession agreement, handled the process but alleged that the qualification bar was lowered for “people to take over.”

Dr. Manteaw claimed that for instance, conditions for the winning consortium to provide local content was “originally a condition precedent” but it was changed to condition subsequent. What this did, he alleged, was that persons who won the bid were not evaluated against any guideline.

Whilst he welcomes the government’s investigations of alleged breaches in securing insurance guarantees by PDS, he wants the investigation to be broadened to include the role MiDA played in that process.

To ensure that this does not happen again, he made a suggestion about selecting local partners in the future.

According to him, floatation of shares on the stock market for interested Ghanaians to purchase has always been the best, citing the Ghana Commercial Bank as a case in point.He contrasted this with foreign direct investments which require foreigners to partner locals.Such deals, he pointed out, have always been frost with corruption.

Dr. Manteaw cited the takeover of Ghana Telecom by Vodafone and the allegation from a sitting MP, Collins Appiah Ofori, that legislators took $5m bribe before passing the agreement.

 

More to come!

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