ACEP clears the air on Veep’s role in PDS demand guarantees change

ACEP clears the air on Veep’s role in PDS demand guarantees change

The Africa Centre for Energy Policy (ACEP) has come out to clarify misleading issues arising from its latest update on the Power Distribution Services (PDS) concession challenges.

The update, which had analysed investigations by government and MiDA (through FTI) on the validity of the demand guarantees, had maintained its position that significant flaws occurred in the procurement of PDS as the concessionaire, and that PDS did not have the financial muscle to invest as required by the Lease and Assignment Agreement (LAA) and the Bulk Supply Agreement (BSA), which major problem motivated the change in the demand guarantees from a bank guarantee to an insurance guarantee.

Key pointers of the update bordered on the financial incapacity of PDS, the investigation team-FTI’s attempt to exonerate IFC and Hunton Andrews Kurth (Hunton) from blame, their call on the Vice President to answer to the change of the demand guarantees as well as ECG’s concerns ignored and importantly, the validity of the guarantees.

However, according to the Centre, it has observed with alarm that subsequent discussions on its update, particularly on the FTI’s call on the vice president to answer, have been twisted. “It appears that some stakeholders believe ACEP’s paper confirms the statement in the FTI report that the Vice President instructed the change in the structure of the guarantees.

“We wish to emphasise that our reference to the FTI report in respect of the Vice President’s alleged role in the change to the guarantees was to expose the inconsistencies in the FTI report, which sought to exonerate MiDA and the financial advisors in the decision to change the structure of the guarantees,” the statement signed by Benjamin Boakye, Executive Director of ACEP, stressed.

ACEP further noted that notwithstanding that the FTI report had sought to indicate that the Ministry of Finance and the ECG had accepted the proposed demand guarantees, the same report had cited MiDA as suggesting in its 19th February email that the approval was the unilateral decision of the Vice President.

“According to the FTI report, “… an email was sent on February 19, 2019, by MiDA to confirm that, as per the instructions of His Excellency, the Vice President, they wished to inform the recipients of the email that MiDA was willing to give PDS the Notice to Proceed to issue the Demand Guarantees for the BSA Payment Security and the Lease Payment Security”,” the Centre said.

These contradictions, ACEP believed, affected the credibility of the FTI report and thus “highlighted the trend of the crafty approach by MiDA to exonerate itself from owning the responsibility for the shambolic status of the PDS concession.”

The think-tank however remained resolute in its stance that on “the basis of the analysis from FTI that they could not deliver on the mandate given to [them] by MiDA, which they themselves allude to subtly, and also attempt to hide the failures of MiDA and the transaction advisors.

“We therefore want to be clear that ACEP did not seek to put premium on FTI’s report but to analyse it. The content of the report continues to be discredited. A new email evidence, emerging from the server of MiDA and circulating in the media also suggests that the Finance Ministry gave the final approval to the demand guarantees. These bundles of contradictions require a thorough and proper forensic audit of the servers of MiDA to uncover the truth,” the Centre emphasised.

 

Source: Energy Ghana

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