Contrary to claims by the Millennium Development Authority’s (MIDA) that the two companies which bid for the ECG concession were both evaluated on their merits, it has emerged that one of the finalists – BXC Ghana – was disqualified and thus was not evaluated.

The disqualification of BXC Ghana paved the way for Meralco, the only other company in the race, to be declared winner.

A letter written by MiDA and addressed to BXC Company on April 12, 2018, said the company has been disqualified for failing to make its existing contractual relationship with ECG known in its initial proposals.

The letter, sighted by B&FT, accused BXC Ghana of conflict of interest on the basis of its relationship with ECG – as a result, the company’s financial proposal was not opened for evaluation and was returned to the company.

Although MiDA, in its release that announced the Filipino-registered Meralco as winner of the ECG concession, said it is committed to transparency and assured the integrity of the process, it did not respond to questions about BXC’s disqualification prior to the announcement of the winner and even in the aftermath.

Director, Communication and Outreach at MiDA, Pamela Djamson-Tettey who spoke to B&FT days before the winner was announced, denied that BXC had been disqualified – insisting that the “process was ongoing”.

After a winner was announced she insisted the two companies were both evaluated when in reality only one company went through the final evaluation.

Some officials of Meralco told the B&FT that, indeed, the bid-boxes were supposed to have been opened in the presence of the two bidders – but the disqualification of BXC after the evaluation of its Technical Proposal left the Financial Proposal of BXC unopened and it was returned to BXC.

Breach of trust

BXC’s disqualification was premised on a number of contracts it signed with ECG to help the power distribution company reduce its losses in a number of operational areas.

While this relationship has been in the public and a number of documents submitted to MiDA by BXC confirmed this relationship, MiDA in its April 12 letter said: “Ghana is in possession of information concerning prior or existing contracts with ECG, including without limitation the Distribution Losses and Associated Network Improvement contract between ECG and BXC dated September 2011, as amended on 24 March 2017 and 11 August 2017; and has determined on the basis of this information that:

1. one or more conflicts of interest or potential conflicts of interest exist
2. that the foregoing statement by the BXC Consortium is false and/or misleading; and
3. that such false and/or misleading statement is material in nature

BXC’s ‘sin’

In spite of the company admitting that its existing relationship with ECG puts it in better stead to manage the ECG on a full-scale, the company in its Technical Proposal stated: “We are not aware of any actual or potential conflict of interest arising from a prior or existing contract or relationship with Ghana, ECG, their affiliates, representatives, advisors or consultants”.

MiDA proceeded to evaluate BXC’s technical proposal despite the fact that the decision to disqualify the Chinese-based company was premised on the undertaking made in the Technical Proposal.

But for the disqualification, the process to find a private sector partner in the management of ECG’s operations would have been competitive to the very end and would have made the country the ultimate winner – but the disqualification of one of the only two parties to reach this far made it easier for Meralco to be adjudged winner.

Background

Ghana signed the Power Compact with the United States of America, acting through the Millennium Challenge Corporation (MCC) – an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.

The Ghana Power Compact will provide Ghana with a grant sum US$498,200,000 to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs and reduce poverty.

About US$350million of the grant is to be invested in ECG to make the country’s power distributor operationally and financially more efficient.

A first bidders’ conference was held in September last year, when a shortlist was announced and further trimmed to two – BXC Ghana and Meralco.