Finance Minister Ken Ofori-Atta has explained that government cancelled the power concession agreement with Power Distribution Services(PDS) to protect the 3 billion dollar assets of the Electricity Company of Ghana(ECG).
Mr. Ofori-Atta maintained that there was no need pursuing the matter since some partners in the deal breached some agreements that were fundamental to the sustainability of the takeover.
Appearing on Citi TV’s current affairs show the Point of View, the Finance Minister explained that government had little time to take a strategic decision to rescue the assets of ECG, hence the need to go ahead with the abrogation of the PDS deal even after the U.S.A cautioned the government of Ghana against it.
“We had a 3 billion dollars of a national asset in play. We’ve gone through the procurement but when a mistake is made or a partner is seen not to have the capacity to do it, you do what you must do,” he told host of the show, Benard Avle.
Responding on implications of the decision by government to cancel the deal, Mr Ofori-Atta argued that Ghana is currently in a position to manage its power sector prudently to avoid any form of crisis.
“Your contention is that without America Ghana cannot do anything?,” he quizzed adding that a sovereign country like Ghana should always have an alternative plan.
Recounting how Ghana’s first president, Dr. Kwame Nkrumah took bold decision to build the Akosombo Hydro Power Dam in the face of foreign opposition, Mr. Ofori-Atta argued that it is time to pursue visionary policies in tough times.
Independent Power Producers
On concerns raised by the Independent Power Producers to clear a 1.5 billion dollars debt owe them, the Finance Minister explained that there is the need for the power producers to come to the negotiation table to restructure the Take or Pay contract agreement to Take and Pay to avert a situation where government keeps paying for energy not consumed.
“We want these IPPs to be our partners into the future and they should participate in what we want to do,” he stressed.
He stated that the current status quo where government is made to pay over a billion dollars every year for power not used is unsustainable.
On roads, Mr. Ofori-Atta was hopeful the first tranche of payment to local contractors which starts on October 31st will create some liquidity in the financial system by stimulating economic growth.
“We are paying contractors below 5 million cedis and those around GHc300,00. I think that should create some liquidity in the system”