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FINANCE MINISTRY TAKES STEPS TO UNFREEZE PDS ACCOUNTS TO SUPPORT ECG

General News

A letter signed by Deputy Minister of Finance Charles Adu Boahen says the Finance Ministry is currently expediting action on the unfreezing of accounts previously held by Power Distribution Services (PDS).

A letter signed by Deputy Minister of Finance Charles Adu Boahen says the Finance Ministry is currently expediting action on the unfreezing of accounts previously held by Power Distribution Services (PDS).

 

This is to ensure that funds are made available to support the day-to-day operations of the Electricity Company of Ghana (ECG).

The ministry says ECG, which the Energy Commission has appointed as the interim operator of the electricity retail sales licence in the Southern Distribution Zone, will exercise oversight responsibility over the movement of funds from all PDS bank accounts.

The Financial Intelligence Centre (FIC) last week froze PDS’s bank accounts following the detection of anomalies in the bank guarantee it provided before the takeover of ECG assets. According to the Minister of Information, Kojo Oppong Nkrumah, the government quickly alerted the FIC after the anomalies in the PDS guarantee were detected, resulting in the freezing of the company’s accounts. The government then issued an official statement on the PDS suspension on Tuesday.

“It is important for Ghanaians to note that the government is committed to ensuring that all assets of [ECG] are secure,” Mr Nkrumah said.

Further directives

The letter from the Ministry of Finance also said PDS will nonetheless be allowed to operate its existing bank accounts.

“PDS must lodge all cash and cheque collections into the bank accounts intact. No staff of PDS [are] permitted to keep cash or cheques collected,” the letter ordered.

The letter further directed PDS to provide ECG with detailed revenue collection and expenditure reports every week, “and the relevant bank statements to support same at the close of business daily”.

“ECG must approve all payments, transfers and disbursements of funds from the PDS Bank Accounts before they are effected. Such approvals must be provided by ECG within 24 hours of the request being made and shall not be unreasonably withheld.
“This arrangement is not to undermine PDS’s authority to disburse but to ensure transparency in the operations of the Revenue Accounts, which are to be controlled by ECG during the period that the suspension of the Electricity Sales Licence to PDS is in force,” it said.

Suspension

In the late hours of Tuesday July 30, the Government of Ghana announced the suspension of the contract with PDS for distribution of electricity, barely six months after the company took over from ECG.

A statement signed by the Information Minister announced that “the decision follows the detection of fundamental and material breaches of PDS obligation in the provision of payment securities (demand guarantees) for the transaction which have been discovered upon further diligence”.

Mr Oppong Nkrumah further said: “The demand guarantees were key prerequisites for the lease of assets on 1 March 2019 to secure the assets that were transferred to the concessionaire.”

The matter is now under investigation. The government has assured the public that the investigations will be completed within a month.