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Business News of Friday, 29 October 2021


Several PPAs signed were in violation of public procurement act – Atta Akyea

Samuel Atta Akyea, Chairperson, Mines and Energy Committee of 8th Parliament play videoSamuel Atta Akyea, Chairperson, Mines and Energy Committee of 8th Parliament

Chairperson of the Mines and Energy Committee in Parliament, Samuel Atta Akyea backed calls for the prosecution of persons involved in the signing of various Power Purchasing Agreements.

This comes on the back of a research paper conducted by Energy Economist, Dr Ismheal Ackah and Energy Analyst, Crispin Bobio indicating Ghana has signed 32 PPAs between 2011 and 2016.

Addressing participants at a forum organised by the Institute of Economic Affairs, the Mines and Energy Committee Chair said the various PPAs signed during the period were in violation of the Public Procurement Act as they were not subjected to competitive bidding.

“The kind of PPAs that we had were just liked a ‘knee jerked’ reaction to the kind of challenges we had, so that at the end of the day we’re so anxious in solving the energy crisis that we lost our rationality; that is one of the things which is a chief concern to me.”

“It seems to me that probably in the arrangement to solve the energy crisis, we suspended our rationality; and I say this not to insult anybody because we did calculate the impact of these contract we signed”, he said, adding “in 2018 alone, excess generational capacity arising out of signed PPAs cost the government about GH¢320 million capacity charges. And that is unpardonable commercial arrangement”

“If you asked me as a lawyer is causing financial loss to the state. And I will be tempted to say that those who are involved should not go scot free. It’s too an expensive undertaking for a country struggling to gather coins. And that is my first observation”, he pointed out.

He further explained that the absence of competitive bidding can short-change the country during Power Purchase Agreements which can saddle it with debts.

“It is imperative that, should there be an emergency situation, once there’s competitive bidding, you would have an array of service delivery personnel that help to ascertain the best value for money deal…So I don’t support any arrangement within which a company coming to deliver such an important service for power delivery may have serious implications to the economy and country”

To further ensure Power Purchase Agreements were apt and entailed value money concessions, the Energy and Mines Chairman called for the standardization of a legal regime before contracts are signed.

“When you leave individuals to do the contracting of Power Purchase Agreements, they can place in terms that will be schemed in favour of the contractor in the deal but if we had a legal regime that disallows persons to broker side deals, it will be very beneficial as the legal regime will be geared towards statutory purposes.”

The IEA forum was on the theme; “What does Ghana Stand to Gain from PPA Transparency”

Meanwhile, the erstwhile John Mahama administration in 2015 signed a contract with AMERI Energy to rent 300 megawatts of emergency power generators at the peak of the country’s power crisis also known as the 'Dumsor era'.

The cost of the agreement with the UAE-based energy firm at the time was around US$510 million.

But shortly after the governing Akufo-Addo administration took office in 2017, it revealed Ghana had been short-changed by AMERI Energy as they presented an overpriced budget and were subsequently overpaid by US$150 million.

This then forced the Akufo-Addo government to begin a renegotiation process of the Power Purchase Agreement with AMERI Energy. The renegotiation saw the amount from the deal reduced by 13 percent in order to ensure value for money.