Alex Mould’s take on PDS cancellation brouhaha
--Ghana May Lose More than
GHC10 billion; If We Do Not Consider Lifeline Given By MCC
Why should Millennium Challenge Corporation (MCC) allow a
grace period to reconsider a tender?
Why on earth are we asking MCC to give a grace period for
retendering especially since we have been at this Power Compact for over 5
years?
The goofing was identified in February 2019 when PDS could
not come up with the Bank Guarantee just before the deadline of March 1st,
2019, which surprises me as the international player Meralco could easily get
its banks in Philippines to Issue. So why was it left to the local shareholders
to raise the guarantees - this was the first Red flag! Assets were handed over
in March, 2019 in a rushed manner where CPs were not met. Since April there
have been to and fro discussions with MCC. Undue influence by people close to
government brought us where we are.
The audit completed over 2 months ago and it was clear that
Ghana was duped in handing over the ECG assets mainly due to lack of due
diligence by the people in charge of the concessionaire privatization.
There is a Ghana Government Transaction team whom the
president has appointed his own lawyer to chair - this team has the most power
even more than MiDA and ECG.
There is MiDA that reports to the President. There is the
IFC, the adviser to MCC and MiDA. We are where we are because government failed
to take the option proposed by MCC to keep PDS contract (ie to abode by sanity
of contract’s doctrine) but change the Shareholding especially of the 51% Local
players - who had no proof of competence either financial or technically (to
have managed something similar in complexity and magnitude) - and replace them
with Ghanaian Institutional shareholder in the interim with the ultimate aim at
floating all or some of the shares on the stock exchange. Government refused!!
The question is why?
Remember Meralco is the only reason that the contract for
this ECG concessionaire was awarded to the PDS consortium based on their
technical and financial clout which none of the other shareholders - including
the recently added AEnergia SA, which still remains a mystery in terms of
ownership and why at all its in the consortium - and there is no agent to get
rid of them.
Let’s put the blame squarely on Ghana! Let’s call a spade a
spade!!
We simply goofed on such a serious transaction!!!
This is a reflection of how serious we take things in our
beloved country Ghana - led by our *Leaders* whom we have placed so much *Trust*
to do the right things.
The focus is not Ghana First, but rather what “We” get from
managing the assets of the state which normally results in short changing the
Citizens of Ghana and to the detriment of our economy.
Please don’t blame MCC! The rules of engagement were
clear! MCC are just asking us not to
take us back years!!!
Lets consider the option and lifeline given by MCC;
- Keep the PDS contracts
- change the undesired Local shareholder and replace them
with institutions like SSNIT and or GIFF
- bring in known world class foreign distribution companies
(Meralco has been approved) and eliminate AEnergia SA, the scarlet pimpernel in
this deal.
What we lose by cancelling the PDS contract and not working
a solution with MCC is not just $190m but nearly $1.7bn
- $190m from the Ghana Power Compact
- $400m for the Regional Compact
- $500m Government Budgetary Support
- $580m from the concessionaire
Restructuring of shareholders is also amendable to MCC. Re-tendering the entire transaction is not.
Government needs to reverse the termination of the
transaction (not shareholders) before our economy loses more than the $190m of
what we just lost on the Power Compact alone.
The real Question is “Is Ghana prepared to embarrass US Government
on the international scene??”
It is coming........watch this space!
END
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