Interim injunction sought by BXC against ECG concession dismissed

The Commercial Division of an Accra High Court has dismissed an interlocutory injunction that sought to stop Millennium Development Authority (MiDA), a body mandated to spearhead the concessional agreement of the operations of Electricity Company of Ghana (ECG).

The court in its ruling noted that Ghana had a timeline to access funds for the programme and in an event where the programme is halted the country and ECG would suffer.

According to the court if the concession should go through the state and ECG could pay BXC Company Limited some compensation.

BXC had gone to court because it had been disqualified from the bidding process by MiDA, describing the disqualification as “arbitrary and without basis.’’

That was after the MiDA had selected Meralco Consortium to manage the ECG under the compact two power agreements.

Meralco Consortium is led by the Manila Electricity Company from the Philippines.

BXC and Meralco Consortium were the two final bidders after other bidders pulled out of the bidding process.

According to its statement of claim, MiDA disqualified BXC on the basis that there were “potential conflicts of interests” because of the existence of prior contracts between ECG and BXC.

But BXC averred that it disclosed to MiDA that it had contracts with the ECG and had also heavily invested in Ghana’s power sector before it submitted its bid.

BXC is therefore seeking damages of $4 million, which it contends was “money it expended on preparing and submitting its bid”, as well as an indefinite injunction on the MiDA from going ahead with the concession process.

MiDA through its lawyer, had argued that BXC had no legal right to seek for an injunction of ECG’s privatization process.

According to MiDA, BXC was not chosen as the concessionaire and, therefore, could not seek to stop the privatisation.

On August 5, 2014, the government entered into an agreement with the USA, acting through the Millenium Challenge Corporation (MCC) to make momentous changes in the power sector in Ghana.

Known as the Ghana Power Compact or simply Compact II, the MCC is expected to invest up to $498.2 million to transform Ghana’s power sector and stimulate private investments.

Source: GNA

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