It has emerged that former Energy Minister Boakye Agyarko warned that the cancellation of the Emergency Power Agreement (EPA) between the Government of Ghana and the Ghana Power Generation Company (GPGC) could cost the government.
A letter dated 12th April 2018 Mr Boakye Agyarko wrote to the then Attorney General Madam Gloria Akuffo said “As you are aware the Ministry of Energy by a letter dated 13th February , 2018 terminated the Emergency Power Agreement (EPA) between the Government of Ghana and the and the GPGC Limited (GPGC) dated June 3, 2015. This follows Cabinet’s approval of the recommendation of the Power Purchasing Agreement Review Committee , as reviewed by the Attorney General’s Office.
“In its response dated 26th February 2018, GPGC rejected the basis for our termination and and insisted that the GoG continue to fulfil its obligations under the EPA. It appears from their letter that GPGC has continued with the development of the project.
“After careful consideration, the Ministry is contemplating the deferment of the project , rather than its termination because it appears the termination of the EPA may prove costlier to the government of Ghana than was originally anticipated.
“It is expected that the GPGC will be called back to the negotiation table to discus the terms of the deferment , and in the process, attempts will be made to obtain terms than what those currently contained in the EPC.”
In a response to this letter was another letter dated 11th June 2018 and signed by Madam Gloria Akuffo.
It said “ Reference is made to your letter numbered ZA53/243/10 dated 12th April 2018n requesting the advice of the Attorney General on the Ministry’s decision to negotiate for the deferment and for better terms of the above mentioned Emergency Power Agreement.
“We are of the opinion that the agreement having been abrogated cannot be negotiated for improved terms as it is no longer in existence.
“The parties may however negotiate another agreement which must be submitted to cabinet for approval. You may revert to us if you require any further clarification.”
A London-based United Nations Commission on International Trade Law tribunal has ordered the government of Ghana to pay a contractually defined “early termination payment” of more than US$134.3 million plus interest and costs.
This follows the termination of the contract between the government of Ghana and an independent power producer, Ghana Power Generation Company (GPGC) in 2018.
This has resulted in accusation and counter accusations among officials of the present administration and the previous Mahama administration.
For instance, Former Power Minister Dr Kwabena Donkor told the Attorney General Godfred Yeboah Dame that the $170million judgement debt to the Ghana Power Generation Company (GPGC), was as a result of wrongful termination and not wrongful signing of the agreement.
The Pru East lawmaker told Dzifa Bampoh on the First Take on 3FM Wednesday June 23 that the agreement went through due process before it was signed.
Mr Dame had said the decision by the signatories to sign such an agreement was uninformed.
“The fundamental question that we asked is why the agreement was entered into in the first place? Why did John Jinapor and his former boss execute the signatory of this agreement and afterwards set up a committee to review those agreements?
“It is because you yourself had realised that this was going to result in excess capacity,” he said.
“Indeed, the cost was very, very monumental. As per the report of the PPA Committee, if all the agreements signed by John Jinapor and his former boss had been allowed to run, each year, the nation was going to be exposed to payment to the sum of $586 million.
“Cumulatively, between 2013 and 2018 the nation was going to pay as much as $1.76 billion,” he told Joy News.
Reacting to his comments, Dr Kwabena Donkor told Dzifa that “The awards was given for wrongful termination, not for wrongful signing. I am therefore surprised that the Attorney General does not deem it fit to confirm that whoever terminated will also be referred to the CID.
“The Ghana Power Generation Company (GPGC) was sent to cabinet, it had cabinet approval. Indeed, the Secretary to Cabinet wrote to Parliament on the 3rd of July 2015, and parliament approved the agreement.
“It went through the constitutional process set out for these agreements.
“This agreement had the lowest tariffs of all the emergency power purchasing agreements. It had the shortest duration, four years and that agreement did not require any financial security from the state of Ghana and therefore it was one of the agreements negotiated.”