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Minority raises concern about ECG concession agreement

BY: Musah Yahaya Jafaru
Haruna Iddrisu
Haruna Iddrisu

The Minority in Parliament has raised legal issues with the concession agreement between the government and a consortium of investors for private sector participation in the Electricity Company of Ghana (ECG).

It again expressed uncertainty about the future of ECG workers.

The Minority Leader, Mr Haruna Iddrisu, raised the issues last Tuesday while contributing to a debate on the approval of the concession agreement between the government and a consortium of investors, led by the Manila Electric Company (MEralco), for private sector participation in ECG within the terms of the second Millennium Challenge Compact (MCC).

Under the agreement, the concessionaire will have the right to operate and expand the power distribution network.

There is also a bulk supply agreement by which the ECG will sell power under a portfolio of public/private agreement, while the rate the concessionaire will charge for power will be determined by the Public Utilities Regulatory Commission (PURC).

The agreement, which was approved last Tuesday, followed the presentation of the report of the Mines and Energy Committee, which recommended its approval.

Procurement issues

Mr Iddrisu said in the motion for the approval of the loan, it mentioned a consortium of investors led by Manila Electric Company ( MEralco).

However, he said in the agreement, the company's name was not MEralco but rather Power Distribution Services Ghana Limited.

Mr Iddrisu said the lease and assignment agreement was made on July 3, 2018 by and between the ECG and Power Distribution Services Ghana Limited.

"So legally, we are dealing with Power Distribution Services Ghana Limited," he added.

Mr Iddrisu said he had done due diligence and it had turned out that the company was incorporated even after the procurement process from the details that he had from the Registrar-General's Department.

He indicated that Power Distribution Services Ghana Limited was incorporated with 10 persons behind it on June 29, 2018.

Employment blues

According to Mr Iddrisu, there was an agreement to the effect that the company would not employ (the retained employees).

"The company agrees not to accept the transfer of employees’ employment contract or to solicit, offer or accept any deployment contract with any retained employee without the prior written consent of ECG for a period commencing from the effective date," he quoted the document as saying.

Mr Iddrisu said he was speaking as a former Minister of Employment and Labour Relations and indicated that in approving the agreement, Parliament and the government must accept two key responsibilities.

"If tomorrow, our distribution systems are worse off, we hold the persons speaking responsible based on the experience in Cote d’ Ivoire," he stated.

Mr Iddrisu said the Millennium Development Authority (MiDA) had engaged shareholders, including himself, and they were told that the employment relationship, as was defined by the MiDA compact, had been extended from five years moratorium to 25 years.

Mr Iddrisu requested that he be furnished with official correspondents from the Millennium Challenge Corporation agreeing to those adjustments.

Mr Iddrisu asked whether there was a petition before the Mines and Energy Committee because the stakeholders would want to hear from Parliament as to its position regarding their petition.

He noted that it was important that if Parliament looked at the issue and applied the power of due diligence, they would serve the interest of the public better.


Mr Iddrisu recalled that it was at the United States of America (USA)-Africa summit that the compact was signed by a former Minister of Finance, Mr Seth Terkper, and former President John Dramani Mahama after a session when former US President Barack Obama declared the Energy for Africa policy initiative.

Therefore, he said it was important that Ghana was taking advantage to reform its energy sector, particularly to improve distribution.