Finance Minister, Ken Ofori-Atta, has revealed the real reason behind the cancellation of the concession agreement between Power Distribution Services (PDS) and the government.
According to the Minister, the nature of the contract was going to cause the country to lose 12 billions dollars by 2023, hence the need to sit back and renegotiate the deal.
“If you look at the time frame and the nature of the contract we were to sign, we were to make payment of about a billion dollars every year and would have paid about 12 billion dollars by 2023. This is why we had to sit back and take a proper look at the returns.
“So the negotiations and discussions have already started, I initiated the steering committee on Monday to continue the negotiations. We are still negotiating and have paid part of the money. When contracts are unbalanced you have to balance them,” he told Accra based Peace FM, monitored by Adomonline.com.
He confirmed the contract between PDS and the government was cancelled due to some misapprehensions between the insurance company of PDS.
According to the Minister, the insurance company denied signing a demand guarantee and said it might have been a rogue employee who signed the document.
“PDS contract is cancelled. When we turned over our electricity distribution system to PDS on March 1, 2019 they had a demand guarantee of 350 million dollars to ensure that should there be any issue the country will have recourse to it. Unfortunately, the insurance company that got the demand guarantee said they will not handle that kind of instrument and flatly denied they had anything to do with the guarantee.
“if you put your Electricity Distribution System into someone’s hands worth about $3 billion with about 20 -25 years of concession and you realise within the first four months they don’t have enough money and their guarantees are not trustworthy what is the responsible thing to do?” he quizzed.
source: Adomonline.com | Nana Aba Mensah