ECG assumes full Operation after PDS deal Cancellation


The Electricity Company of Ghana Limited (ECG) has announced it has “assumed full operational and financial control of the electricity distribution business in the Southern Zone of Ghana with immediate effect.”

This comes after government’s termination of its concession agreement with Power Distribution Services (PDS) on claims of fraud.

In a statement copied Ghanaweb, ECG said “All stakeholders and customers should therefore engage ECG in their normal business activities which include but are not limited to metering, billing, distribution of bills, bill reconciliation, revenue collection, new service connections, disconnections and reconnections, faulty meter replacements, network faults and repairs, network operations, maintenance, expansion and rehabilitation, complaints and fault reporting to the call centres, and any other related services.”

It further directed that “all payments in respect of power purchases and other related activities should take place at ECG Regional and District Offices, ECG existing Customer Service Centres, ECG licensed vending stations, ECG operated Cash Points and ECG authorised Banks.
“Accordingly, all cheques issued in respect of power purchases and other related activities should be in the sole name of Electricity Company of Ghana Limited. All assets currently in the name of PDS revert to ECG with immediate effect and will be rebranded in accordance with the decision over the next few weeks.”

PDS was in July 2019, found to have presented invalid insurance security for the takeover of ECG assets. The company was initially supposed to furnish the ECG with payment securities in the form of either a demand guarantee or a letter of credit issued by a bank.

The insurance guarantee came about because of difficulties experienced with raising a bank guarantee.
PDS appealed to use a demand guarantee issued by an A-rated insurance company. PDS thus submitted the Payment Securities in the form of demand guarantees issued by a Qatari insurance firm, Al Koot Insurance and Reinsurance, which eventually became the source fraud after it was discovered that there were fabricated letters and forged signatures.

The government also noted that Al Koot did not have the capacity to engage in such a transaction based on its net worth. The company was also not authorised to issue demand guarantees.
On the back of the claims, the US, in a statement, described the termination of the concession agreement as unwarranted.

“Based upon the conclusions of the independent forensic investigation, the U.S. position is that the transfer of operations, maintenance, and management of the Southern Distribution Network to the private concessionaire on March 1, 2019, was valid, and therefore the termination is unwarranted,” the statement read, adding that, “the $190 million funds granted to Ghana at the March 1 [2019] transfer to the 20-year concession from ECG to PDS are no longer available.”

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