Court case blocking Meralco project in Ghana junked
The high court of Ghana has dismissed a case filed by a Chinese firm case against a state agency that favored Manila Electric Co. as possible concessionaire for electricity distribution in that country’s capital region.
The case arose when BXC Co. (Ghana) Ltd. hailed in April Ghana’s Millennium Development Authority (MiDA) to court after the agency declared Meralco the preferred bidder for the concession.
As a result, the court ordered a stop to the concession process.
In a statement, the management of MiDA said the high court in Accra [Ghana’s capital] dismissed on June 9 the application for interlocutory injunction filed by BXC.
“The substantive matter is to take its normal course,” MiDA said, adding that it “continued to rely on the goodwill of all Ghanaians in implementing every aspect of the $535-million power compact.”
MiDA was referring to the Ghana Power Compact II Program, which seeks “to address the root causes of unavailable and unreliable power supply which plagues the country’s power sector and slows economic growth.”
Part of the program—backed by the American independent foreign aid agency Millennium Challenge Corp.—is the bidding of concession to manage, operate and invest in the electricity distribution business of state-owned Electricity Company of Ghana Ltd. or ECG.
Last week, Meralco president Oscar S. Reyes said in an interview that the utility giant was working on a timetable that puts the awarding of the contract and the turnover of the Ghanaian business to Meralco’s hands in several months.
Reyes said the transition was expected to start by the fourth quarter this year, and the actual awarding of the contract was scheduled for next year.
Meralco is already present in Africa as technical adviser for a project in Nigeria, but the Ghana contract offers the company an opportunity to get involved at a deeper level as a concessionaire.
In Ghana, Meralco has partnered with a local entity and is allowed to have a maximum equity share of 30 percent in the partnership, if the concession moves forward.
