Two separate investigations have revealed that the US$ 490 million concession given to the Power Distribution Services (PDS) to manage the Electricity Company of Ghana (ECG) is fraudulent.
Extensive paper trail shows blatant connivance by persons in the Jubilee House, the Finance Minister Ken Ofori-Atta, Dr. Esson Benjamin, the Chief Executive Officer of the Millennium Development Authority (MiDA) charged with evaluating the contract and a slurry of phoney companies linked to financiers, family and friends of the top echelon of the Akufo Addo administration.
An intercepted report of Government’s investigative team that went to Qatar on Wednesday 7th August 2019, led by the Deputy Attorney General Godfred Dame, revealed that payment guarantees that PDS was supposed to provide as pre-requisite for claiming the Bulk Supply Agreement (BSA) and Lease Assignment Agreement (LAA) with ECG was acquired fraudulently.
“It is evidently clear that there is no valid Payment Security or demand guarantee issued by AlKoot in respect of any part of the obligations of PDS under the LAA and BSA…in light of the findings from the visit to ALKoot in Doha, it is our respectful view that there is no valid or enforceable demand guarantee issued by AlKoot in support of the LAA and BSA,” the government report signed by Godfred Dame concluded.
Indeed, shortly after the government’s investigation, MiDA through the prompting of the United States (US) government had contracted a Washington-based private forensic investigator-FT1 Consult to probe the same scandal.
FTI’s was a bit modest in drawing a conclusion, However, their report unravelled a string of activities that tie into earlier revelations that PDS was unfairly telegraphed to secure the deal, despite lacking the technical and financial capacity to win the bid to take over the GHC 20 billion worth national asset-ECG.
The leaked report signed by FTI Consult’s Pat Pericak and David Okhumale on September 3, 2019, revealed how stakeholders of PDS had virtually zero funds plus a fraudulently acquired payment security from a staff of Qatar-based reinsurance company called AlKoot.
In one instance, PDS had to use retail funds collected from Ghanaian electricity consumers to pay for a US$ 12 million charged by Cal bank as its fees for arranging payment securities for PDS.
“Of the USD12.25 Million that was charged by Cal Bank to PDS as fees for raising the Payment Securities, only USD1 Million (8%) was funded by an equity contribution by a PDS shareholder. USD7 Million (57%) was funded by a loan that was advanced by Cal Bank to another PDS shareholder. This loan was repaid from operating cash flows generated by PDS after the Transfer Date. The balance of USD4.25 Million (35%) was also paid directly from operating cash flows generated by PDS after the Transfer Date,” FTI Consult wrote in the leaked document.
When the government delegation met with the board of AlKoot, they denied knowledge of their company granting the purported payment security worth US$ 350 million to PDS. Indeed, the officer who hatched the scheme for PDS, one Yahaya Al Nouri, the head of the reinsurance department of AlKoot was acting fraudulently and has since been found out, suspended and on the verge of being prosecuted by Qatari police service.
He virtually, agreed to give PDS a demand guarantee worth almost US$ 400 million despite the fact that the entire networth of AlKoot is barely US$ 170 million and that Al Nouri only had the capacity to authorise reinsurance not exceeding US$ 15,000 directly and US$200,000 after approval from AlKoot’s board.
Yahaya Al Nouri reportedly forged documents and signatures to grant the payment securities which was scanned to PDS. No original copy of the payment security was given, yet the deal was pushed through for PDS.
Former Volta River Authority (VRA) CEO and a renowned energy expert in Ghana, Dr Charles Wereko-Brobby, has summarised sentiments by the general public and expert critics that the fraudulent PDS deal should be terminated with immediate effect.
“Get rid of all those people who don’t have the money…They did not meet the condition precedence so it needs to be terminated,” he said on Joy FM’s Newsfile programme
Dr. Brobbey outlined the issues, saying: “The incontrovertible facts are these: ECG is now in private hands without proper insurance; somebody using our own tariffs to try and fund their obligations cannot be somebody who has got the wherewithal to meet their obligations.”
The PDS scandal has sparked serious public outrage as revelations show that it was a cleverly hatched scheme to allow people close to the New Patriotic Party (NPP) administration to hijack one of Ghana’s biggest national asset.
PDS had beaten six other established energy companies from around the world to win the ECG bid. The major condition precedence to validate the contract was for the winner of the bid to provide payment guarantees from a bank. PDS did not have it, yet a few people at MiDA met secretly to change the condition from a bank to security from an insurance company.
After this was done, Vice President Muhamadu Bawumia endorsed it in what will go down as One of the biggest scandal in Ghana’s history.
Contents of a leaked WhatsApp group chat set up by President Akufo Addo’s Nephew Gabby Asare Otchere-Darko shows individuals linked directly to the Jubilee House and the Finance Minister Ken Ofori-Atta scheming to have a bigger part in the PDS pie, including Philip Ayesu a close friend of Gabby Asare Otchere-Darko, Babatunde Ampah, a family friend of the Finance Minister, Joseph Siaw Agyapong, a well-connected businessman of Zoomlion fame.
Others include Edward Akufo Addo (Bumpty), the junior brother of President Akufo Addo and Kwame Akoto Bamfo of Sikkens who is a known financier of the Akufo Addo campaign.
In the PDS deal, the United States Millennium Challenge Account (MCA) as part of its latest compact with Ghana was providing US$ 500 million for private management of ECG. The contract required a foreign company and local partners. Meralco of The Philippines was picked to partner a flurry of questionable local partners who were expected to raise combined funds of US$ 490 million as a prerequisite for the contract.
This compact had been initiated in 2013, during the previous administration of the opposition National Democratic Congress (NDC). Upon assumption of office in 2017, the Akufo Addo administration appointed Dr. Esson Benjamin to head MiDA. The administration also appointed Keli Gadzekpo as the Chairman of ECG.
Incidentally, Mr. Gadzekpo and Dr. Esson Benjamin who were both appointed simultaneously, are all business partners of Finance Minister Ofori-Atta who is government’s main representative in the PDS/ECG negotiation. Indeed (except for the finance minister by virtue of his public position), the two are still directors of Enterprise Group- a financial institution formed by Ken Ofori-Atta and Keli Gadzekpo.