Former Deputy Minister for Energy, John Jinapor says the news of government suspending its agreement with Power Distribution Services (PDS) due to ‘falsified’ documents does not come as a surprise to him.
According to him, the Akufo-Addo government was warned when it decided to change the roadmap the previous government had done to hand over ECG to an experienced company, capable of moving it forward financially.
“I am not surprised because I knew that if we don’t take care, we will get to this point. You will recall that when this government took over power from the NDC, we gave them handing-over note directing the new government the roadmap and at that time, we had done RFP and RFQ, meaning that we had gone far to get companies which are experienced and capable of handling ECG and move it forward. This government decided to change everything but we warned the government that they should be careful with the decision they are taking, otherwise it will put the country into a serious problem,” he recounted.
A statement signed by the Information Minister, Kojo Oppong Nkrumah, late on Tuesday, disclosed that the decision was taken after government detected “fundamental and material breaches of PDS’s obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.”
According to the statement, “The Demand Guarantees were key prerequisites for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire.”
“The government is conducting a full inquiry into the matter, and the outcome will inform the next course of action. Government has taken steps to ensure distribution, billing and payment services continue uninterrupted,” the statement added.
But reacting on Okay FM’s ‘Ade Akye Abia’ Morning Show, John Jinapor maintained that he told the former Energy Minister, Boakye Agyarko and the Finance Minister in Parliament on 3rd July when they came for Parliamentary approval on the agreement that PDS and other listed companies don’t have the capacity to run ECG.
“Check the records of Parliament when former Energy Minister Boakye Agyarko and the Finance Minister Ken Ofori-Atta came to the House with this deal on 3rd July for Parliamentary approval, I told them that PDS and other companies do not have the financial strength, experience and the capacity to handle a big company like ECG with about 22 billion Cedis worth. ECG makes revenues of about 6 billion annually and so if you are looking for someone to manage it, you have to look for someone with experience, but they didn’t listen,” he reiterated.
He revealed that the agreement with PDS has 45 condition precedents which ought to have been met before PDS takes over, but 16 of the condition precedents were not met; thus, the key among them is the guarantee which the government has mentioned.
“It was a critical condition precedent and we told the government to take critical look at such condition precedent because the guarantee shows that the company will put something down in case it is not able to follow the concession to the latter . . . so we did a bank guarantee, but this government changed it to insurance guarantee. The most painful aspect of this is that this government decided to change the condition precedent to condition subsequent; what it means is that PDS should take over before it takes care of the guarantee,” he explained.
“I was hoping the Minister would have called some of us who had worked there before, but it didn’t happen and we kept warning them,” he stressed.