Government cancelled the controversial Power Distribution Service's (PDS) concession deal after investigation on suspicion of fraud was carried out.
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The agreement reached on July, 30 2019, was one that required that the private company, PDS, manage the distribution of power in Ghana.
The decision to terminate the contract agreement according to gevernment was based on two key reasons.
"First of all, it is government’s view that the meeting between the CEO of Millennium Challenge Corporation (MCC )and President Akufo-Addo produced an understanding that the existing concession would be discontinued and a concession restoration and restructuring plan executed within existing timelines and in any event before December 31, 2019."
According to an economic and political risk consultant, Theo Acheampong, he described the whole PDS deal as a shambolic approach to the concession.
Theo lamented on how the deal did not really look good from the onset when it was made public.
According to him, the lack of attention to detail by both the government (and MIDA) on this PDS fiasco was beyond shocking as he believes proper financial and technical auditing were not carried out before the asset was handed over to PDS
"Who gives away such an asset without first conducting all financial and technical due diligence including making sure payment guarantees are rock solid; instead, you say that you will do it later after the contract has been legally executed?"
Theo believes government found itself rushing to meet the timelines because of the change from 20% Minimum local interest to 51%, which caused considerable delays because no serious investor would want minority control especially if they are bringing both capital and technical expertise.
He added that instead of asking for an extension due to change in circumstances to work things out, things were rammed through at the last minute without due diligence being carried out.
Thirdly, the fact that all the major bidders had either pulled out or been disqualified leaving only one company (not the best qualified) standing, in the end, should have raised red flags but it looks like it didn't.
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