General News of Thursday, 1 August 2019
Source: www.ghanaweb.live
2019-08-01PDS suspension: Nature of breach will determine if deal will be terminated - Minister
play videoInformation Minister, Kojo Oppong-Nkrumah
Information Minister, Kojo Oppong-Nkrumah, has indicated that termination of PDS contract will be determined after the enquiry into the operations of estranged Power Distribution Services and this will be in accordance with terms of the agreement the company signed with the government of Ghana.
According to Oppong Nkrumah if after the enquiry whatever breach PDS might have committed
Read full articlecan be rectified then government will go ahead and do so.
“Give them space, let them do the enquiry, let them tell us the nature of the breach that they have found and therefore what the remedial action is,” he said.
The Information Minister stated further that substantial breaches have been detected and understanding of the nature of the breach is very important to the committee. “But to the extent that they have found out that the guarantee is invalid, we are naked if we continue even for 24-hours without securing those asserts,” he added.
Background
The Government of Ghana through the ‘Ministry of Finance and the Electricity Company of Ghana (ECG) Limited has suspended the concession agreement with Power Distribution Services (PDS) Ghana Limited with immediate effect.
A statement by the Information Ministry revealed that the decision follows the detection of fundamental and material breaches of PDS’ obligation in the provision of Payment Securities (Demand Guarantees) for the transaction which has been discovered upon further due diligence.
The Demand Guarantees were key prerequisites for the lease of assets on 1st March, 2019 to secure the assets that were transferred to the concessionaire.
He said “the government is conducting a full enquiry into the matter, and its outcome will inform the next course of action. Government has taken steps to ensure distribution, billing and payment services continue uninterrupted. The general public and customers are assured that this development will not interfere with the distribution of electricity services to customers.”
