$170m PPA judgement debt to be investigated – AG hints
Godfred Yeboah Dame, Attorney General and Minister of Justice.
• Godfred Dame says the CID will investigate the $170m PPA judgement debt
• The agreement was to give Ghana excess supply of power
• The PPA contract according to a London Court was wrongfully terminated
Godfred Yeboah Dame, the Attorney General and Minister of Justice says the Criminal Investigation Department (CID) of the Ghana Police Service will be investigating the Power Purchasing Agreement (PPA) which was signed under the erstwhile John Dramani Mahama-led government and the Ghana Power Generation Company (GPGC).
The agreement has resulted in a $170 million judgement debt, where the Government of Ghana is expected to pay to GPGC as ordered by a Commercial Court in London for unlawful termination of the contract.
On tuesday, June 22, 2021, where he indicated that a report by a committee formed in September 2016 revealed the Power Purchasing Agreement was not proper.
This, Dame said, resulted in excessive power supply and blamed the signatories to the agreement.
“The fact borne out by the PPA committee’s report was that the agreement, together with other agreements, had resulted in such excessive power supply to the state. The state was going to lose $586m per annum and a cumulative cost of about $7.6 billion dollars between 2013 and 2018.”
So, I think that when it comes to financial loss, it is so clear in my mind that the responsibility lies clearly with those who entered into the agreement. The basic point is that the entry into this transaction was unnecessary. The entry into this transaction was what resulted in financial loss to the state,” Godfred Dame explained.
He added, “I, on account of all of this, am going to write a formal complaint requesting an enquiry by the CID into the conduct of the public officers who acted in the manner which resulted in the signing of an agreement which resulted in financial loss to the state.”
I think that first and foremost the entry into the agreement itself was wrong. There was no justification because their own committee determined that the agreement was going to result in excessive power.”
The Government of Ghana was ordered by a London-based United Nations Commission on International Trade Law tribunal to pay a contractually defined “early termination payment” of more than US$134.3 million plus interest and costs.
The agreement between the government and GPGC, an independent power producer, was terminated in 2018.
The Attorney General noted a report presented by a committee constituted in September 2016 advised on the abrogation of the contract.
“The committee set up by the NDC in 2016 – against the background of a recognition that there were so many PPAs entered into by the NDC administration and, therefore, those agreements were going to result in excessive capacity development, as it was termed – came to a conclusion that this agreement had to be terminated. The committee singled out this particular agreement for termination.”
But John Jinapor believes the former Energy Minister under President Akufo-Addo’s first term administration should rather take the blame for the $170 million judgement debt.
“The government didn’t take the matter seriously. First of all, I hold the view that it was wrong to have terminated the agreement the way and manner in which this government went about it.”
“Clearly, we could have saved more than US$150 million if this government had listened to good counsel. But the Minister decided that he would cancel it unilaterally and today, the state of Ghana is asked to pay about US$170 million. That is a whopping amount and it is a colossal amount,” he said.