US gives Government 10 days ultimatum to reinstate PDS or lose $190 million

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The United States of America has given the Akufo-Addo administration up to an October 30, 2019, deadline to reinstate the Power Distribution Service (PDS) as energy distributors in the country or risk losing the $190 million dedicated for the second tranch of the Compact II agreement, ABC News can report.

The US has threatened that failure by the Government of Ghana to comply with its directives issued, which also includes an immediate reversal of the ban placed on PDS by the Energy Commission, will attract severe sanctions.

The letter which is said to be a direct response to the Finance Minister, Ken Ofori Atta’s statement on October 18, further ordered the government to authorize the resumption of PDS’ activities as stipulated by the compact agreement.

In a letter signed by the Acting Vice President of the Department of Compact Operations for the Millenium Challenge Corporation, Kyeh Kim, the government is expected to “Government of Ghana formally announcing the reinstatement of PDS concession right under the transaction arrangements – (deadline 30th October 2019), Lift the suspension (lease and assignment agreement, the bulk supply agreement and the government support agreement) sanctions on all three, Cause the energy commission to lift the suspension of PDS retail supplier license”.

This confirms an earlier assertion by Communications Director of the Energy Ministry, Nana Damoah, who noted that Government may lose its remaining obligations to continue with the $498 million contract agreement between itself and the Millenium Challenge Corporation (MCC) in the PDS-ECG concession agreement.

“It doesn’t sit well with everybody, if you study the document very well you may realize that the MCC may not be too pleased with the decisions that we have made, so far as we know, they are not very pleased. All I’m seeking to say is that we may be penalized in two formats, for example, the MCC could decide to deobligate the remaining 190million dollars out of the 498million dollars” he indicated.

He added, “It could also announce that Ghana is no longer eligible for the regional compact because of the so-called failure at that stage if they have deobligated the 190million dollars, they could say that we’re no longer eligible for compact III”.

Government of Ghana, through the Finance Minister, on Sunday, October 18, recommended the termination of the contract of the PDS after it detected what it calls ‘gross deception and unprofessional conduct’ in their transaction with the ECG.

There are, however, ongoing discussions with the US-partners before the contract can be terminated, according to Deputy Minister of Energy in-charge of Power, William Owuraku Aidoo.


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