PDS has insisted it did nothing wrong The government of Ghana made a shocking announcement last week, declaring it had suspended a concessionaire agreement with a consortium called Power Distribution Service (PDS) for thirty days. The PDS had been responsible for managing the retail, and distribution business of the electricity company of Ghana since March this year. Initially, some cynics on social media thought it was a red-herring thrown into the public to serve as a distraction from tax increases announced by Finance Minister Ken Ofori-Atta the week before. But as the days progressed, it dawned on everyone this was more than just a diversionary tactic.
In this write-up we trace the history of PDS, what is PDS, who are the shareholders, why we are where we are, and what the authorities are not saying.
In 2014, as part of the conditions that government needed to satisfy in order access a second Millennium Challenge Compact, christened the Ghana Power Compact, private participation in the management of Ghana’s debt-ridden energy sector was mooted. The Compact II would see Ghana receive $498.2 million from the Millennium Challenge Corporation of the United States to advance economic growth and reduce poverty in Ghana.
According to the Millennium Development Authority, MiDA, the supervising agency of the MCC Compact, the power compact was to, “directly support the energy sector strategic objectives to achieve power supply sufficiency including exports to neighbouring countries, and also supply power for new oil and gas-based industries.”
The John Mahama government announced the decision to, under the Compact II agreement, enter into a concessional agreement where a private company would take over the management of the largest power distributor in the southern part of the country, the Electricity Company of Ghana. The announcement was however met with resistance despite strenuous clarification and explanation by the government that the strategic national asset was being privatized. The workers of ECG held several public fora and protested the decision, arguing that if the government paid its debts to the power distributor and made the necessary investments, the company was capable paying its supplies and proving viable.
Nonetheless, invitations were made for companies wishing to participate in the management of ECG to come forward. In September 2016, the Chief Executive of MiDA, Ing. Owura Kwaku Sarfo announced that out of the over 60 companies that expressed interest in the Private Sector Participation in ECG), MiDA had shortlisted six, out of […]
