Danessa Rivera (The Philippine Star)
- August 2, 2019 - 12:00am
MANILA, Philippines — Manila
Electric Co. (Meralco) and its partners are working to get the suspension on
the concession to operate Ghana power distribution utility lifted.
In a disclosure yesterday, Meralco
said Ghana suspended the concession for the operation and maintenance of the
assets and facilities of the Electricity Company of Ghana (ECG) awarded
to the Power Distribution Services Ghana Ltd. (PDS).
This was due to alleged material
breaches in the provision of the demand guarantees by PDS, which were key
prerequisites for the turnover of the assets and facilities, Meralco said.
“Meralco is currently coordinating
with its local partners in PDS to obtain more information and clarification on
this matter and will fully cooperate with the government of Ghana to address
any issue affecting the same,” Meralco senior vice president and chief legal
counsel William Pamintuan said.
The suspension took effect on July
31 as announced by Ghana’s Information Ministry.
“The demand guarantees were key
prerequisites for the lease of assets on March 1, 2019 to secure the assets
that were transferred to the concessionaire. The government is conducting a
full enquiry into the matter, and the outcome will inform the next course of
action,” the agency said in a statement.
In a briefing yesterday, Metro
Pacific Investments Corp. president and CEO Jose Ma. K. Lim said they are
confident the issue woud be addressed. MPIC is the parent firm of Meralco.
“Our JV partners assured us they can
explain the matter (to the government) so we are confident it will be lifted,”
he said.
PDS is a consortium between Meralco
through Meridian Power Ventures Ltd. (30 percent), Angola-based firm AEnergia
SA (19 percent), and three Ghanaian firms namely TG Energy Solution Ghana (18
percent); GTS Engineering Ghana Limited (10 percent), and TBK Ghana Limited (10
percent).
Last year, Millennium Development
Authority (MiDA) chose Meralco as the preferred bidder for the management of,
operation of, and investment in the electricity distribution business of the
ECG.
MiDA is the agency which oversees,
manages and implements the programs under the Millennium Challenge Account set
out by the Government of Ghana and the Millennium Challenge Corp. (MCC).
In July 2018, the Parliament of
Ghana approved the 20-year concession agreement between the government and PDS
for private-sector participation in the ECG within the terms of the second MCC.
The consortium, led by Meralco,
assumed operations of Ghana’s power distribution utility on March , where it
committed to invest at least $580 million to improve its operations.
Meralco and its partners were
supposed to start operating the ECG at the start of the February but r MiD
postponed the transfer of assets to allow parties namely Government of Ghana,
ECG and PDS to conclude consultations and finalize work on some critical
aspects of the transaction for a smoother transfer.
Under the agreement, ECG’s assets
will be leased to the PDS while the ECG will become an asset holding company.
Meralco said the PDS consortium has
planned to invest over $580 million for capital expenditures to strengthen the
governance, management and operations of the ECG and improve the delivery of
power to end users as well as support Ghana’s socio-economic growth.
After the end of the concession, all
assets would be transferred back to ECG, it said.
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