President John Dramani Mahama says the Power Distribution Services (PDS) concession collapsed not because it was a flawed initiative, but due to poor management and personal interests that compromised its implementation.
Speaking at the sod-cutting ceremony for the Multipurpose Solar Energy Project at the Dawa Industrial Park on Thursday, the President said the concession, which sought to introduce private sector participation in power distribution, was “handled wrongly.”
“I know there was an attempt to involve the private sector in power utility and distribution. We all remember the example with PDS. PDS was not a bad thing; it was just handled wrongly, and many people had personal interests in it. That’s why it failed,” he said. “But there is something to be said for injecting private sector efficiency into public utilities.”
His comments come in the wake of renewed public discussion following a ruling by the London Court of International Arbitration (LCIA) dismissing all claims filed by PDS against the Electricity Company of Ghana (ECG) over the termination of the concession agreement.
Signed in 2019 under the Millennium Challenge Compact between the Government of Ghana and the U.S. Millennium Challenge Corporation, the PDS deal was intended to improve efficiency in power distribution through a 20-year concession under which PDS would manage ECG’s operations and assets.
The concession was suspended and later terminated after government investigations found that the payment guarantees submitted by PDS through Al Koot Insurance and Reinsurance Company of Qatar were fraudulent. The Qatari Court of Cassation subsequently ruled that Al Koot had not authorised the guarantees.
PDS later filed for arbitration, claiming more than US$390 million in damages and alleging wrongful termination by ECG. ECG, represented by Omnia Strategy LLP, argued that PDS failed to verify the validity of the guarantees, amounting to a major contractual breach.
The LCIA dismissed all PDS claims, ruling that the fraudulent guarantees undermined the concession and justified its cancellation.
Meanwhile, the Ministry of Energy and Green Transition has reiterated its commitment to recovering all monies and assets due the Electricity Company of Ghana following the termination of the concession.