PDS violating concession agreement – Jinapor reveals

Former Deputy Energy Minister, John Abdulai Jinapor says the Power Distribution Services (PDS) is violating the concession agreement binding its operations in Ghana by failing to inject its own capital.

PDS took over the operations of the Electricity Company of Ghana on the 1st of March 2019 with an expected capital injection ofGH¢900 million

Following a warning by some Independent Power Producers to shut down as a result of high indebtedness, it has emerged that no capital injection has been made by PDS as stipulated in the concession agreement.

The former Deputy Energy Minister said in a statement “It is curious, mind-boggling and alarming to note that PDS has so far not injected the needed financial capital as stipulated under the concession agreement.

On the contrary, the company has resorted to appropriating all revenues collected from Ghanaians (including expected payments) to shore up their capital requirements. This appropriation includes expected payments to Transmission and generation Companies.

PDS is clearly violating the Concession Agreement by refusing to release funds meant for other entities in the electricity sector as stipulated in the tariff structure.

How can a company supposedly contracted to inject its own capital to improve the electricity sector turn around to depend on ECG’s already existing funds for their operations” he questioned.

He reiterated that the ECG/PDS agreement in its current form is very bad and will certainly not inure to the benefit of Ghanaians and called for an investigation into the selection of PDS to take over the concessions of ECG.

According to him, Ghanaians are being subjected to a load shedding amidst denials from Government and the PDS while warning against attempts by the government to increase levies from ESLA in the imminent 2019 mid-year budget review.

Six Independent Power Producers (IPPs) which currently supply about 1,500 megawatts of electricity have threatened to shut down their plants if Power Distribution Services (PDS) Limited fails to settle debts amounting to over $700 million within eight working days.

They said ever since PDS took over, it has not paid them a dime, resulting in accumulation of another debt of over $300 million, bringing the total debt to over $700 million.

The companies – Sunon-Asogli Power (Ghana) Limited, BXC Solar Ghana, Cenit Energy Limited, Cenpower Generation Company Limited and Karpowership Ghana Company Limited – are members of the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB).