He was speaking at the first Bidders’ Conference on the concession for the Private Sector Participation (PSP) in the electricity distribution business of the Electricity Company of Ghana (ECG).

[contextly_sidebar id=”0L5cLASKd6KZEAHOIhOaQ3lt6WgVFXW3″]The Bidders’ Conference is to facilitate interaction between the shortlisted applicants for the ECG Concession and potential local and international investors.

He reminded the power sector remained central to the development agenda of the government and “key to unlocking the development potential of Ghana.”

But the Energy Minister lamented that “years of inadequate investment, inefficiencies within the utility, and a large stock of outstanding receivables, particularly in the distribution sector, have all conspired to weaken the organisations in the sector to what they are today. As a nation, we should set our sights firmly on turning around the fortunes of this strategic sector which so many of us have poured our sweat into building.”

Highlighting the negative impacts of the power crisis, Mr. Agyarko noted that the power crisis, per the 2013 World Bank Energising Economic Growth in Ghana report, the 2006-07 power crisis cost Ghana nearly 1 percent in lost GDP.

Also, the Institute of Statistical, Social and Economic Research (ISSER), in its 2014 study on the economy indicated that Ghana lost production worth $2.1 million per day during the crisis.

Mr. Agyarko further noted the impact of the power crisis on unemployment figures.

“For the government, even more critical is the resulting loss of jobs that was precipitated by the unreliable power to business. Recognising this fact, President Nana Akufo-Addo, during the 2017 State of the Nation Address, warned that if left unaddressed, the challenges in the energy sector would collapse the Ghanaian economy.”

About the ECG PSP Transaction

The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government foreign aid agency, on August 5, 2014.

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

The Government of Ghana is committing at least US$37.4 million of its own money.

The main project under the Ghana Power Compact is the ECG Financial and Operational Turnaround Project, which is designed to transform ECG into an efficient and financially strong institution through private sector participation (PSP). About US$351 million of the MCC grant is being invested in ECG.

The project seeks to bring about private sector participation in investments into, as well as the management and operation of, the ECG through a concession arrangement.

Under the concession, a private partner will invest in ECG and improve its operations to reduce commercial and technical losses, reduce the frequency and duration of outages, introduce new equipment and technology, and reduce the vulnerability of the distribution system to theft and meter manipulation.

The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA). 

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post We need power to turn economy around – Agyarko appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Union said the decision was a “step in the right direction” although it does not necessarily address all the issues they raised in the past about the agreement.

[contextly_sidebar id=”8uhlUGqqlhCYp8P6Jfaq1ekzusgK1cKa”]President Akufo-Addo, while delivering his 2017 May Day address, said the government has resolved to keep more than the 20 percent control agreed by the former government, to protect the workers.

Under the agreement, the government is expected to allow about 80 percent private sector control in ECG for the country to benefit from a cash injection of about one billion US dollars over a period of 5 years.

But Nana Akufo-Addo said, “Government has amended the terms of the concession agreement to require that one; Ghanaians own at least 51 percent of the concession. Two, there should be no involuntary layoffs as a result of the concession,” he stressed, adding that, “the term of the concession will be reduced from 25 years to 20 years”

“We believe that these amendments meet the aspiration of Ghanaians in protecting the jobs of workers and ensuring the control and viability of ECG. We are as concerned as the workers that, the reform should not lead to involuntary job losses and we should find a long term solution to the nation’s electricity problem,” he added.

The Public Utility Workers’ Union which has criticized the deal say the review proposed by the government does not address some of their challenges.

The General Secretary of PUWU, Michael Adumatta Nyantakyi in an interview on the Citi Breakfast Show on Tuesday, said, “I wouldn’t say that is what we were expecting as workers of the company, but we think it is a step in the right direction. We have always been pushing that the whole concession arrangement should be reviewed and the President taking that initiative to seek this review, I think we need to acknowledge and applaud him on that aspect.”

How however expressed regret that the President did not consult the various stakeholders before renegotiating the deal.

“This has come to us as strange news because the President during the State of the Nation Address said he was going to organize a dialogue between labour, ECG and MiDA to discuss the details surrounding this concession before any firm position is taken, unfortunately that did not happen…. If that kind of consultation had taken place prior to this announcement and some details provided, I strongly believe that the workers would have been happier,” he said.

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By: Jonas Nyabor/citifmonline.com/Ghana

The post PUWU commends gov’t’s review of ECG concession deal appeared first on Citi 97.3 FM - Relevant Radio. Always.

He believes the country should completely reject the MCC Compact II, which will see the concession of the Electricity Company of Ghana (ECG), to the Millennium Development Authority (MiDA).

[contextly_sidebar id=”Djb9HckeO3y3wZxy74jCV6IIA5ZNYsGx”]In Dr. Manteaw’s view, “the credibility of the whole concession arrangement has been shattered completely”  insisting that “we should be rejecting it outright.”

He further expressed discomfort at “attempts to try to repair that damage by making recommendations as to why or how it can be improved.”

Under the power compact, six projects will be implemented to address the root causes of the unavailability and unreliability of power in Ghana, in a bid to make the ECG more efficient.

But Dr. Manteaw punched holes in such a mandate noting that, one of ECG’s main problem was that it has not been able to invest in its operations largely because of government’s huge indebtedness to it.

The ECG is also deemed to be inefficient because of factors like obsolete equipment, he added, and thus drew a link between these two points noting that “if government does not pay what it owes ECG, how on earth can ECG invest in its operations?”

In Dr. Manteaw’s view, Ghana is perfectly capable of managing its own affairs, and noted that, similar concessionary endeavors in the past, had not turned out well.

“This is no different from the Aqua Vitens Rand contract which was a management contract, but bore the hallmarks of a concession, and we warned that it would not succeed and it did not. Luckily for us, it was limited to only five years so we had the opportunity to cut our losses and get out of that bad deal… Today, Ghana Water is in the hands of Ghanaians and at the ‘Kufuor gallons’ which became the order of the day have vanished.”

The Compact II agreement

Ghana and the Millennium Challenge Corporation of the US government signed the second Compact in October 2016.

The agreement brought to total $1.4 billion received by the government to be injected into the country’s energy sector geared towards making the ECG more efficient.

The project under the compact includes the ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.

The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.

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By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post Ghana should be fighting against ECG concession – Steve Manteaw appeared first on Citi 97.3 FM - Relevant Radio. Always.

He said it is within the ability of the country to manage the company and make it work without giving it out on concession to a private company.

He said the American Compact agreement is a support, and should not be allowed to push the country to go into some arrangements which would ultimately not inure to the benefit of the generality of Ghanaians.

Mr. Nyantakyi said “so far looking at the items under the concession arrangement, it is only the private foreign investor who would smile to the market at the detriment of the average Ghanaian who would suffer serious high tariffs and challenges that may come with the privatization of the company”

Mr. Nyantakyi said this on the sidelines of a National Divisional Executives meeting in Tema.

The National Executive meeting brought together junior and senior staff throughout the country, to discuss issues regarding the company, as well as the ECG concession which has been top on the agenda of the workers.

He said “though the compact could be beneficial, government must take a second look at the proposal for the private sector participation and tweak it in a manner that ECG would be able to operate efficiently and profitably for the benefit of Ghana and Ghanaians.”

Mr. Nyantakyi said ECG is a vital national asset whose problems could be easily resolved if government stops interfering, and allows it to work efficiently as an independent business entity.

“We believe ECG is a vital national asset, and the problems facing the company are such that it can be easily resolved if the necessary political support and interference is cut out, and the company is allowed to operate efficiently as any independent corporate entity,” he said.

He said it is within the ability of Ghana and Ghanaians to turn ECG around, and make it more viable, adding that it is unfortunate that after 60 years of independence, government cannot take up  an entity such as the Electricity Company of Ghana, and manage it fully.

“Government cannot say that after 60 years of independence, it cannot manage a company such as the Electricity Company of Ghana and make it operate efficiently.”

Mr. Nyantakyi said although the union is not entirely against the American concession, government must critically look through the compact, and must not be coerced in taking a decision which will not inure to the good of Ghanaians.

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By: Elvis Washington/citifmonline.com/Ghana

The post Ghanaians to pay high tariffs under ECG concession – PUWU warns appeared first on Citi 97.3 FM - Relevant Radio. Always.

Today, I carefully sift through the rubble to break them down to you.

As we move along, ask yourself, “what at all is wrong with the Ghanaian? Is it our educational orientation? Are we paying for the sins of our forefathers? Or we are simply here to glorify the skins other than black? Follow this objectively!”

The good
The government of Ghana agrees with all Ghanaians that there is a more efficient way the Electricity Company of Ghana can operate. This is a positive reflection of the company. It is also positive that the government is seeking hands or ideas to resolve the distribution challenge in the energy sector.

But wait! What did the government or the Millennium Challenge Compact say is the problem with the ECG? Non collection or under collection of bills, operational cost is too high and frequent power outages. Good! Who owes the company the more?

The bad
1. Government is the chief debtor to the ECG. The ECG is what it is because of government’s huge indebtedness to it. Often, the Finance ministry issue out monies to settle some of the debt. But consider this! Government uses the power and pays for it later.

In fact, 40% of ECGs power is consumed by government and its agencies. So government uses the power today and pays for it in 2017. That’s what it is! Where on earth is this business model working? Where should ECG get the monies to buy power from VRA and GRIDCo for it to be consumed by government? Forget about the other economical excuses!

You and I are quickly disconnected when we fail to pay for our bills for even a month. How many months does government owe? Plenty! Yet the same government is sitting on the fence accusing ECG of none or under collection of bills.

2. There is no evidence, neither has Ghanaians been told that VRA and GRIDCo has power in stock but the ECG has not been able to distribute it. So why will anybody blame ECG for the frequent power outages? What VRA produces is what ECG sells. That’s what it is! If it’s about losses after supply from the GRIDCo, that’s a different case.

Aside that, we all know, including the president, HE John Mahama that there is low production capacity of which he [the president] is seeking to resolve by opting for the deadly killer coal fired plant at Ekumfi Aboano. So why this hypocrisy?

3. If my memory serves me right, the president in his 2015 state of the nation address, admitted that “the current power situation is as a result of generation capacity”, he did not say it is because of the ECG, so why let it seem that it is the dumsor that has triggered this move to give ECG out on concession?

4. Why will the government of Ghana commit to paying its debt it owed the ECG in a five year period when the ECG is giving out on concession, but is not ready to pay its debt to the ECG in a similar arrangement?

The ugly
This is where it gets scarier, dangerous and mind boggling.
While you prepare to know the sad implications of the Millennium Challenge Compact II agreement from the United States, try and reflect on activities before and during 6th March 1957. Reflect on why our forefathers did what they did to secure us political independence. Reflect on what the true and patriotic Ghanaian is made of.
Now look at this.

1. Article 7.1 of the compact agreement states that; and I quote “…the government [of Ghana] will proceed in a timely manner to complete all of its domestic requirements for this Compact to enter into force. The Parties understand that this Compact and the PIA, upon entry into force, will prevail over the domestic laws of Ghana.

Really? An International law prevailing over our domestic laws including the constitution? Like seriously? I see. Well you may be late to get this through because the 1992 constitution of Ghana says at Article 1 clause 2 and I quote “The constitution shall be the Supreme law of Ghana and any other law found to be inconsistent with any provision of this Constitution shall, to the extent of the inconsistency, be void.

Question: Why will a contract, an international one, so to speak, say to a sovereign state like Ghana that, that contract is supreme than any domestic law including the constitution of Ghana? Did the government’s technical team on compact II read this part of the contract and agreed to forfeit the constitutional provisions? What then is the meaning of our independence? What did our forefathers fight for? Where then is the identity and integrity of the sovereignty of Ghana? Come on!

2. Energy is everything in the 21st century. This is beautifully articulated by president Obama who said that and I quote “any nation that is unable to control its energy supply is unable to control its destiny”. So then, why will the US government turn around to sign a compact agreement [Compact II] with Ghana compelling us to give control of our energy distribution to a foreign private monopolistic entity from Italy or France or elsewhere? Is that not we selling our destiny?

3. How come a company which will only be managing the distribution business of ECG be selling power to other countries, when in fact, the generation of power locally is challenged? Why is the company only interested in distribution and not generation of power? Where will the company get the power to supply to other countries? Is it the little we have that will be given to other countries?

4. Let’s move on. Which survey has been carried out by independent bodies to suggest that Ghanaians can pay for electricity when the tariffs are increased by 40%?

[The possibility of increase in tariffs is inferences from the additional parameters to the tariff setting guidelines such as lease payments and guaranteed return on equity to the private investor. [Basically this shows that more determinants to setting utility tariffs are added].

Fact again is that, the private investor is highly likely to demand for realistic tariffs. Consider this: You remember what the PURC brought as tariffs in December 2015? The over 100% increase [for water and electricity] earlier suggested by the PURC was slashed down to the 59 and 63 or there around respectively after political and social pressure mounted on the government]. Well, this social and political pressure WILL NOT wash when the ECG is given to a private hand. And if government fails to comply with tariffs like it did in December 2015, the private investor can go to court or international arbitration to compel compliance with the Tariff Methodology]. Surely tariffs will increase. Externally, Google or read about Uganda’s similar concession and you will notice that for over 10 years into the concession, tariffs are neatly high.

5. Moving on with that, do we assume that power will be so expensive so much such that, locals cannot afford it and that it will be sold to neighboring foreign countries which will buy? Food for thought!

6. Let’s go on. Another thing is mind boggling! Is it really true that the $492.8 million Millennium Compact Challenge money will be invested in Accra/Tema and Kasoa arrears only? Why? What is it in there at Kasoa, Accra et al? Is it because this is where it is going to be more profitable? Is it really where we need money injection? Really? Only a small fraction of the Central and Greater Accra Regions? Two regions out of the 10? Why are we doing this to ourselves, MiDA? How will you respond to people who say that this compact is coming to milk us dry? Do we assume that any part of the country that does not have electricity will not have electricity for the next 25 years when this agreement is in force? [This is also based on analysis from pure business principles; which business entity will spend resources on activities (rural electrification) that the returns will not cover the cost of those activities?]

7. More questions, probably final point for now. This borders on transparency. If the Millennium Development Authority MiDA and the MCC are clean in their minds, are transparent and have nothing hiding, why are they not publishing the Financial and Value for Money models used by the World Banks’ IFC and MiDA to conclude that ECG needs to be given to a private hand? Again, since this undisclosed models were used to do the analysis somewhere in 2012, can we still say the ECG then is still the ECG now in 2016? MiDA and IFC, I know you are reading, why are you not publishing the models so that journalists and CSOs can all read? More surprisingly, MiDA, is it true that you did not give a copy to the Finance Ministry when it requested for it? Is it true? If it is, why? MiDA and IFC why?

Before I rest my case, Ghana Institute of Chartered Accountants, are you there? Please can you do the public some good to offer us thoughts into understanding the financial meaning of a 25 year Finance Lease and its implications for the private investor and the ECG? Your effort I believe will help shape the conversation.
For MiDA, I am keenly waiting to read your statement to clarify these mind boggling questions. Until then, join the campaign to say NO to the ECG concession!

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By: Obrempong Yaw Ampofo/citifmonline.com/Ghana

The post Obrempong writes: The ECG concession – The good, the bad and the ugly appeared first on Citi 97.3 FM - Relevant Radio. Always.