51% PDS shares were given out without evaluation – PIAC Chair
The Chairman of the Public Interest and Accountability Committee (PIAC) has questioned the process that gave 51% majority shares of Power Distribution Service to Ghanaians.
Dr. Steve Manteaw said Santa Baron Ventures Ghana, TG Energy Solution Ghana, GTS Engineering Ghana Limited and TBK Ghana Limited were not evaluated before being picked to hold majority shares.
He said this on the back of material breeches leveled against PDS by the government, in relation to insurance guarantees tendered to secure some $18b assets belonging to ECG.
On July 24, 2018, Parliament approved the concession agreement between the government and the consortium led by the Manila Electric Company (Meralco).
Meralco, which was reconstituted to form a consortium, became known as Power Distribution Service (PDS) with majority Ghanaian shareholding.
The shareholding arrangement of PDS is Manila Electric (Meralco) of The Philippines, 30 per cent; Aenergia SA (Angola), 19 per cent; Santa Baron Ventures Ghana, 13 per cent; TG Energy Solution Ghana, 18 per cent; GTS Engineering Ghana Limited, 10 per cent, and TBK Ghana Limited, 10 per cent.
Until its suspension, the PDS was responsible for managing the retail and distribution business of the electricity company of Ghana since March this year.
Speaking Tuesday, on the Super Morning Show on Joy FM, Dr. Steve Manteaw said the crisis PDS is currently battling with, only goes to show that the majority shareholders lack the capacity to manage an investment as huge as the Electricity Company of Ghana.
He also told Daniel Dadzie, host of the SMS that the local partners lacked the financial muscles to invest $100,000,000 dollars annually for a period of five years to improve the fortunes of ECG.
Dr. Manteaw blamed the situation on the opaque and skewed manner the Millennium Development Authority (MiDA), the body responsible for managing the ECG/PDS concession agreement, handled the process.
He alleged that the qualification bar was lowered for “people to take over.”
Dr. Manteaw claimed that for instance, conditions for the winning consortium to provide local content was “originally a condition precedent” but it was changed to condition subsequent.
What this did, he alleged, was that persons who won the bid were not evaluated against any guideline.
Whilst he welcomes the government’s investigations of alleged breaches in securing insurance guarantees by PDS, he wants the investigation to be broadened to include the role MiDA played in that process.
To ensure that this does not happen again, he made a suggestion about selecting local partners in the future.
According to him, floatation of shares on the stock market for interested Ghanaians to purchase has always been the best, citing the Ghana Commercial Bank as a case in point.
He contrasted this with foreign direct investments which require foreigners to partner locals.
Such deals, he pointed out, have always been frost with corruption.
Dr. Manteaw cited the takeover of Ghana Telecom by Vodafone and the allegation from a sitting MP, Collins Appiah Ofori, that legislators took $5m bribe before passing the agreement.