Why BXC sued MiDA over ECG concession bid
One of the companies that lost the bid to manage the Electricity Company of Ghana (ECG) under a concession arrangement has sued the Millennium Development Authority (MiDA), the entity spearheading the concession process.
In a suit filed at the Commercial Division of the Accra High Court, BXC Company Limited, a Chinese company, says it was unlawful disqualified from the bidding process by MiDA.
Advertisement
According to BXC, its disqualification from the biding process to get private participation in the operations of ECG was “arbitrary and without basis.”
It is, therefore, seeking damages of $4m, which it contends was “money it expended on preparing and submitting its bid”, as well as an indefinite injunction on MiDA from going ahead with the concession process.
Concessionaire selected
On April 20, 2018, MiDA announced that it has selected Meralco Consortium to manage ECG under the compact two power agreement.
Meralco Consortium is led by the Manila Electricity Company from the Philippines.
In a statement, MiDA said Meralco Consortium is known to have the highest combined technical and financial score, and has therefore been designated as the Preferred Bidder.
Per the compact, the Millennium Challenge Corporation (MCC) is expected to inject about 418 million dollars into ECG, whiles Meralco will invest about 500 million dollars.
BXC and Meralco Consortium were the two final bidders after other bidders pulled out of the bidding process.
“Conflict of interest”
BXC is, however, in court after it was disqualified on the basis that there was “potential conflicts of interests” because of the existence of prior contracts between ECG and BXC.
According to the company's statement of case, MiDA in a letter dated April 12, 2018, stated that there was potential conflicts of interests but BXC claims it was “unaware of any conflict of interest” resulting from its “existing contract with ECG” was “false and misleading”.
MiDA, the statement of case said further added that BXC’s actions constituted a breach of the Request for Proposal (RFP) issued by the Government of Ghana through MiDA.
But BXC averred in the statement of case that it disclosed to MiDA that it had contracts with ECG and had also heavily invested in Ghana’s power sector before it submitted its bid.
‘The purported disqualification of plaintiff (BXC) from the tender process by the defendant (MiDA) on the basis of the said contracts with ECG is without any basis as there is no legitimate ground warranting the disqualification,’’ the statement of case added.
MiDA
The Millennium Development Authority (MiDA) has confirmed being summoned to court by BXC Consortium over the latter’s disqualification from the bidding process to manage the Electricity Company of Ghana (ECG).
MiDA however says since the matter is before the High Court in Accra, it will not make any comments on the matter to avoid prejudicing proceedings.
Instead, MiDA is assuring the public that it will continue to uphold high standards of integrity and transparency throughout the ECG Private Sector Participation Transaction process.