Philippine Daily Inquirer


- By Ronnel W. Domingo @Ronwdoming­oinq therefore

The Ghanaian government has terminated power distributi­on concession of a Meralco-led consortium due to alleged “making false declaratio­n and misreprese­ntation of facts” related to demand guarantees on assets relevant to the contract.

Manila Electric Co. holds a 30-percent interest—a minority but the biggest stake—in Power Distributi­on Services Ghana Ltd. (PDS).

PDS is the special purpose vehicle created by the Consortium that won the privatizat­ion of the operation and maintenanc­e of the assets of state firm Electricit­y Company of Ghana (ECG).

Based on the terms of the concession, the consortium was expected to invest a total of $581 million during the first five years of the contract period, to improve ECG’S distributi­on business and the reliabilit­y of power supply in Ghana’s capital region.

The scrapping of the concession comes almost three months after the Ghanaian government suspended the deal due to alleged irregulari­ties.

In a regulatory filing, Meralco said Ghana terminated the concession “principall­y due to alleged material breaches in the provision of the demand guarantees by the PDS.”

The demand guarantees were key prerequisi­tes and condition precedent for the turnover of the assets and facilities of ECG to PDS.

Citing a letter signed by Ken Ofori-atta, Ghana’s minister of finance, Meralco said an audit undertaken by the African country’s government indicated that the demand guarantees “were issued without due authorizat­ion and in excess of the mandate of Al Koot Insurance and Reinsuranc­e, Qatari insurance firm and were invalid.”

Even then, the audit report also mentioned that there was no informatio­n available to forensic auditors to suggest that PDS committed fraud in relation to the demand guarantees.

PDS maintained that it had procured the demand guarantees in good faith and that it had no knowledge of any issue with same until the suspension of the concession,” Meralco said.

Ofori-atta himself visited the Philippine­s earlier this month as leader of a Ghanaian delegation to mark the 60th anniversar­y of diplomatic relations between Accra and Manila. Ghana’s energy minister John Peter Amewu was also part of the mission.

In a statement dated Oct. 14, Amewu expressed his gratitude “for the reaffirmat­ion by Manila Electric Co. of its “commitment to Ghana’s power sector.”

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