GNPC cash-strapped now because of govt’s PDS deal – Martin Thompson

Executive Director of Alliance for Social Equity and Public Accountability (ASEPA), Martin Thompson has alleged that the introduction of the Power Distribution Services Ghana Ltd (PDS) deal into the energy sector is the reason the Ghana National Petroleum Corporation (GNPC) has been cash-strapped.

According to him, PDS changed the payment structure of the energy sector when it started its operations,

Read full articlerendering GNPC, Ghana Grid Company Limited (GRIDCO) and Independent Power Producers (IPPs) financially weak.

He further alleged that PDS at the time was solely spending the revenues generated in the sector, sidelining the other power producers.

In an interview with GhanaWeb, Mr Thompson stated that “Government’s indebtedness to GNPC is as a result of the PDS deal…when PDS took over, PDS totally changed the structure of the energy sector payment. If you look at the chart on the energy sector participation, GNPC lies on top because it was to power the plant. Then GRIDCO, Independent Power Producers (IPPs). PDS was at the bottom of this chart”.

He averred that “When PDS collect the money, instead of sitting down and looking at the structure of payment and paying all the sector participators what they were doing was that they collect the money, they pay themselves and they leave the other energy participators so it is not only the GNPC saddled with debt from government, the IPP is saddled with debt, GRIDCO is also saddled with debt”.

The Executive Director of ASEPA however, couldn’t fathom how a company saddled with debt could give out the few money left to support private foundations.

He attributed this ‘uncalled’ for attitude to the lack of leadership at the Corporation.

“How can a company which is in a level of debt stress and is virtually crying for government to settle its indebtedness now be giving out huge sums of money to private foundations without recourse to any process? So again, we look at the broader issues of mismanagement and lack of leadership at GNPC”.

Background.

On March 1, 2019, Ghana Power Distribution Services, Ltd. (PDS) assumed operation and management of the staff and assets of the Electricity Company of Ghana (ECG) under a 20-year concession agreement. Private sector participation is a central reform under MCC’s Ghana Power Compact. This is critical to the long-term sustainability of related infrastructure investments and the financial recovery of the energy sector in Ghana.

The Compact comprised two tranches of funding: $308 million available upon the official start of the current Compact, and a second tranche of $190 million, which was available upon a successfully executed concession agreement, which the United States maintains occurred on March 1, 2019.