Business News of Sunday, 20 October 2019
Government has written to the Millennium Challenge Corporation (MCC) seeking approval to use restricted tender process to find a new concessionaire to replace Power Distribution Services (PDS) Ghana Limited.
A termination of the PDS-ECG concession agreement is set to be announced by the government this week following PDS’ failure to fulfil all the condition precedent of the deal which took effect on March 1, 2019.
President Nana Akufo-Addo at a meeting with the MCC in New York on September 23 informed the US organisation of his government’s decision to terminate the PDS agreement and indicated a replacement will be found soon.
Finance Minister Ken Ofori-Atta has subsequently written to the MCC and the Millennium Development Authority (MiDA) asking for permission to initiate new procurement processes to find a new private sector partner to manage electricity distribution in Ghana.
“Ghana hereby recommends the adoption by the MCC/MiDA of a restricted tender process to replace PDS,” the October 18 letter signed by Mr Ofori-Atta stated.
The need for a restricted tendering, the minister explained, is to ensure that Ghana beats the “limited time” to the expiration of the MCC Compact II programme to avoid losing the remaining 190 million dollars under the compact.
Under the compact, Ghana is to allow private sector participation in its energy sector to be able to access some 500 million dollars from the US government.
The Compact II is due to expire in approximately two years from now.
“This restricted tender process shall be undertaken timeously by fast-tracking some of the processes without compromising the integrity and transparency of the procurement processes,” Mr Ofori-Atta assured the MCC and MiDA.
Per the letter, Ghana has up until December 31 to ensure “a concession restoration”
“Every effort would be employed to ensure a suitable replacement within the relevant timelines in order to complete the compact,” he added.
The Finance Minister indicated government is committed to allowing private sector participation in its energy sector as required under the compact but “in a manner that respects due process”
The government of Ghana, the minister said, “remains fervently dedicated to the ECG PSP transaction”, stating it fully intends to conclude the private sector transaction within the remaining term of the compact II programme.
Mr Ofori-Atta said though government acknowledges the challenges that has faced the ECG privatisation, that does not in any way, diminish the government’s commitment to working with the MCC on private sector participation in Ghana’s energy sector.
“Government intends to see this process through in a manner that follows due process and protect the interest of all parties,” he said.