It does appear Ghana has not been able to escape from the ritual of judgment debt that has mostly saddled successive governments under the Fourth Republic.

In each of the debates after the slap of the judgement debt, one cardinal trait that normally dominates the discussion is the opposition party faultfinding the ruling government for not acting in the interest of the public and the state.

The recent judgment debt that the country has been slapped with is the Trafigura judgment debt.

Trafigura which is the majority owner of the Ghana Power Generating Company (GPGC) secured an award of the judgement debt in January 2021 after an arbitral tribunal in London found that Ghana had unlawfully terminated a contract for the installation and operation of two power plants.

Records indicated that the government terminated the contracts in 2017 based on the advice of the Attorney General who cited the grounds of high tariffs, and associated $115,480,000 cost to the state if it was to be implemented.

The government also cited illegality for want of capacity of GPGC to enter into a Private Partnership Agreement (PPA), failure to obtain siting and construction permits, installation of used plant contrary to policy, and failure on the part of GPGC to fulfil some conditions among others.

Former Power Minister Accuses Government Of Negligence

However, a former Power Minister under the erstwhile John Mahama administration, Dr Kwabena Donkor, has accused the ruling New Patriotic Party and President Akufo-Addo of failing to act with the prudence that it was required under the termination of the GPGC contract

According to the former Power Minister, the reasons given for the termination are untenable as he believes strongly that the GPGC deal was the cheapest and shortest among all PPAs signed at the time.

“It was very avoidable as I have always said. Let me quickly say this. This was the cheapest of all the emergency power plants in terms of cost. It was also the shortest because it was for four years. There was no requirement for the government of Ghana to put down a guarantee, and then again the total capacity charge made of capital recovery, fixed ONM, and non-fuel variable ONM came to 4 cents per kilowatt hour. It was the cheapest at the time of all the emergency power plants we brought in, and so it couldn’t have been based on cost.”
Honorable Dr. Kwabena Donkor

Dr Kwabena Donkor also explained that the government’s claim that GPGC failed to obtain siting and construction permits, was not consequential since that responsibility was partly on the State as stated in the contract.

While admitting that the government reserved the right to terminate any agreement it wanted, the former Power Minister asserted that the government failed to follow due process in terminating the contract.

“If we had negotiated the termination, we could have even taken ownership of the equipment. Unfortunately, even after the court had ruled, we went to sleep. Trafigura is still doing business in Ghana, and therefore we had some leverage at least in negotiating a payment plan, but from 2021 we went to sleep”.
Honorable Dr. Kwabena Donkor

The Pru East MP also rubbished the government’s argument that the plants were used or obsolete, insisting that information was not hidden. He also argued that the GPGC plant was not the only plant the country had secured.

He called on parliament to probe the former Energy Minister, Boakye Agyarko and other officials of the New Patriotic Party (NPP) administration, who decided to terminate the power purchase agreement with the Ghana Power Generating Company (GPGC), leading to a judgement debt of $140 million.

“I believe the Ghanaian state should ask the people who decided to terminate [contract] to tell us why they terminated[contract]. I believe that is the route to use if we have to improve our governance. Those who were responsible would have to tell us why they took that decision because commercially, and legally it doesn’t make sense.”
Honorable Dr. Kwabena Donkor