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

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.
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