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Opinions of Wednesday, 30 June 2021

Columnist: Kwaku Badu

Please, spare us the abstruse legalese: Commonsense dictates that there’re conspirators in the shady PPAs!

John Peter Amewu John Peter Amewu

It is quite disheartening to witness a section of officers of the court resorting to legal gymnastics in the obvious dodgy Power Purchasing Agreements (PPAs) with the view to exonerating the alleged conspiratorial plotters.

In fact, conventional wisdom will dictate that if there is incontrovertible evidence to the effect that the PPAs were entered into lackadaisically, then the signatories can be held responsible.

That being said, of all the prolix interpretations, the one which stands out is that of the Dean of Faculty of Law at UPSA, Professor Kofi Abotsi.

The erudite professor intelligently and wisely alluded to the fact that once administrative or legal negligence has been established, some people should then be liable in the seeming questionable PPAs (emphasis mine).

In fact, the professor’s apt analysis makes nonsense of the nebulous counter arguments being put out there by some lawyers that since the agreement only came into force after the deliberations and ratification by the Members of Parliament, the drafters and signatories cannot be liable in any sense.

Apparently, the contending schools of thought are premising their debate on the Supreme Court’s previous ruling that an international contract is null and void until parliament’s approval.

The commonsensical question here then is: where is the fairness in discharging the remorseless thief and rather holding the negligent watchman accountable?

‘What is good for the goose is good for the gander’: if the Members of Parliament have been sluggish in their line of duty, so are the drafters and signatories of the shady agreements.

As a matter of fact, abstruse legalese cannot be a substitute for good sense and sound discernment in practical matters.

Suffice it to stress that if indeed the Members of Parliament have acted neglectfully in ratifying the cloudy PPAs, those who drafted and signed the agreements cannot be exonerated without further investigations and possible prosecutions.

We cannot also turn a blind eye to the possible legal negligence of those who failed to justify and defend the cancellation of the ridiculous PPA which has unfortunately culminated in a huge judgement debt.

We cannot deny or ignore the fact that for well over four years, dumsor regrettably crippled Ghanaian businesses under the erstwhile Mahama administration, and therefore it was absolutely necessary to take relevant steps to bring the situation under control.

So there was absolutely nothing wrong for Mahama administration to sign Power Purchasing Agreements to support the existing power capacity.

But the all-important question every discerning Ghanaian should be asking is: in our efforts to rectify the anomaly, do we actually have to pay for extra power we do not need?

According to the experts, at present, Ghana needs around 2700 Mega Watts of power, and if that was to be the case, where was the necessity to sign over 43 Power Purchasing Agreements which would have increased Ghana’s power capacity to around 11,000 Mega Watts of power?

More recently, the Finance Minister, Ken Ofori-Atta, announced in parliament that Ghana has spent well over $939 million on the excess capacity as a result of the extraneous Power Purchasing Agreements signed by the erstwhile NDC administration.

What is more chilling though, is the fact that according to the Finance Minister, the said amount was paid to only 3 companies.

The fact that only three of the companies have been paid in excess of $939 million within a short space of time, it was prudent for the Akufo-Addo administration to terminate eleven out of the 43 Power Purchasing Agreements signed by the Mahama administration (see: ‘Gov't terminates 11 Power Purchasing Agreements signed under Mahama’; Michael Creg Afful/, 21/09/2019).

The decision to cancel the needless agreements was as a result of the recommendation by a review committee assembled by the Ministry of Energy to review all the Power Purchasing Agreements signed by the Mahama government.

The Committee recommended that eight Power Purchasing Agreements with a combined capacity of 2070 Mega Watts can go ahead without modification, whereas four of them with a combined capacity of 1,810 MW be deferred to 2025.

The Committee also recommended that three Power Purchasing Agreements with a combined capacity of 1,150MW be deferred beyond 2020.

Interestingly, however, the outgone Energy Minister, John-Peter Amewu, revealed that it would have cost Ghana some US$402.39million if the eleven Power Purchasing Agreements had been kept.

John-Peter Amewu revealed: "Pursuant to the review exercise, Government stands to make significant savings from the deferment and /or termination of the reviewed PPAs. The estimated cost of the termination is US$402.39 million, compared to an average annual capacity cost of US$586million each year or a commutative cost of $7.217 billion from 2018 to 2030. This yields an estimated savings of $6.8billion over the 13 year period."

In fact, Mr Amewu was absolutely right for asserting that the Mahama administration was reckless in signing Power Purchasing Agreements without taking into consideration the financial implications on Ghanaians.

Amazingly, Mr John-Peter Amewu disclosed that if the 26 Power Purchasing Agreements with a combined capacity of 8116 MW were to be deployed in addition to the existing generation capacity from hydro, the VRA plants at Aboadze and Tema, and the TICO, it would have resulted in a total installed capacity of about 11,000 MW.

Mr Amewu thus asserted: "This will by far be more than the current peak demand of 2400MW. Even an annual growth in demand of 10%, our country will not be able to utilize this capacity in two decades (source: Michael Creg Afful/, 2018).”

The all-important question that will keep lingering on is: where was the necessity to enter into over 43 PPAs which would have increased Ghana’s power capacity exponentially to well over 11,000 Mega Watts of power?

K. Badu, UK.