Saturday, 3 August 2019

US$12.2m premium paid by PDS for ECG takeover gone missing

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Adnan Adams Mohammed

More information coming out after the suspension of Power Distribution Services (PDS) as the manager of the a concessionaire that manages electricity distribution in the country is making the stakeholders and citizens restless.

The latest revelation is that, the embattled PDS paid a required US$12.2 million as premium to secure guarantee to finalise the takeover of the Electricity Company of Ghana (ECG), according to a joynews report last week.

In the report, the source had chanced on a documents detailing PDS paid the said premium to Millenium Development Authority (MiDA). But, misterious other documents again revealed that, the money never got to the reinsurers in Qatar.

In the letter dated February 21, 2019, Cal Bank wrote to the Millenium Development Authority (MiDA) notifying them of receipt of an amount of US$8 million as a deposit for the payment of the charges for the issuance of the demand guarantees for a total value of US$350 million.

Then in May, the final instalment of US$4.25 million was also paid from the PDS account at Cal Bank.

It is to be understood that, once Cal Bank received the payment from PDS it worked with Donewell Insurance to finance the deal.

Donewell Insurance also engaged Jordanian based broker Jo Australia Reinsurance Brokers who were tasked with the job of finally making the required payments to secure the final demand guarantees from Qatar based insurance firm, Al Koot.

It is Al Koot which on July 16, 2019, through its Chief Officer General Insurance, Mr Osman Hag Musa, wrote to ECG alerting them about a situation of fraud in which the initial guarantee submitted was allegedly forged by an employee of the company who lacks the authority to issue such a guarantee.

It is based on this alert that Government suspended the PDS concession agreement because of suspicion that the guarantees were fake.

However, another letter available to Joy news dated Wednesday, July 31, 2019, in which Al Koot has written to the insurance brokers notifying them of the formal cancellation of the insurance coverage they had guaranteed.

It explained in the letter that, they are cancelling the cover because the broker had not paid the premium.

It is mysterious where the US$12.2 million PDS paid through Cal Bank to secure the insurance cover has gone to. It is also worrying why Al Koot is now acknowledging that, it had previously agreed to provide the insurance guarantee when it had 15 days earlier written to ECG claiming no such guarantee has been issued by it.

Government has, meanwhile, commenced a full-scale inquiry into the detected breaches in the concession agreement with the PDS, which is expected to be completed within 30 days.

According to the Information Minister, Kojo Oppong Nkrumah, the team conducting the inquiry comprises insurance investigation experts, officials of the Energy and Finance Ministries and officials of ECG as well as MIDA.

Meanwhile, the Chamber of Independent Power Producers, Distribution Companies and Bulk Consumers (CIPDiB) has called on the government to tread cautiously before taking a decision to terminate the power agreement with the Power Distribution Services (PDS) Limited.

The chamber explained that,  the signing of the concession agreement meant that both parties were satisfied with the processes and so any attempt to abrogate the agreement by the government ought to be done in a manner that would not cause the state to suffer losses.

"Two parties to this power arrangement came together, and after expressing satisfaction with the terms of engagement, signed it. So if the government is coming back to say that it cannot continue with this kind of agreement, it has to be done with caution to avoid a heavy cost or embarrassment," the Chief Executive Officer (CEO) of the chamber, Mr Elikplim Kobla Afetorgbor, stressed when apeaking to journalists at the inauguration of the 15-member Board of the CIPDiB in Accra last week.

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