President John Dramani Mahama has stated that the controversial Power Distribution Services (PDS) concession deal was not inherently flawed but failed due to poor handling and personal interests that marred its implementation.
Speaking at the sod-cutting ceremony for the Multi-purpose Solar Energy Project at the Dawa Industrial Park in Agotor on Thursday, November 6, the President said while the PDS arrangement was intended to inject private-sector efficiency into Ghana’s power distribution, it collapsed because of how it was managed.
“I know that there was an attempt to involve the private sector in power utility and distribution. We all remember the example with PDS. PDS was not a bad thing; it was just handled wrongly, and many people had personal interests in it. That’s why it failed. But there is something to be said for injecting private-sector efficiency into public utilities,” President Mahama said.
His comments come in the wake of renewed discussions about Ghana’s power sector reforms following the final ruling by the London Court of International Arbitration (LCIA), which dismissed all claims brought by PDS against the Electricity Company of Ghana (ECG) over the termination of their concession agreement.
The PDS deal, signed in 2019 under the Millennium Challenge Compact (MCC) programme between the Government of Ghana and the Millennium Challenge Corporation (MCC) of the United States, sought to improve efficiency and service delivery within ECG.
Under the 20-year concession, PDS was expected to manage ECG’s assets and operations to enhance power distribution nationwide. However, just months after taking over, the government suspended and later terminated the agreement after discovering that payment guarantees provided by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent.
Investigations revealed that the guarantees had not been authorised by Al Koot, a fact later confirmed by the Qatari Court of Cassation. The fraudulent documents, which were central to securing PDS’s financial obligations, ultimately invalidated the concession.
PDS subsequently filed for arbitration in London, accusing ECG of wrongful termination and demanding over US$390 million in damages. ECG, represented by Omnia Strategy LLP led by Cherie Blair KC, defended the decision, arguing that PDS’s failure to verify the authenticity of the guarantees constituted a serious breach of contract.
After years of proceedings, the international tribunal dismissed all claims by PDS, ruling that the fraudulent guarantees struck at the core of the agreement and justified its termination.
Meanwhile, the Ministry of Energy and Green Transition has vowed to recover all the monies and assets due to the Electricity Company of Ghana (ECG)
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