This follows concerns raised in court by lawyers for PUWU, over the ongoing bidding processes despite an interlocutory injunction application before the court, praying the court to halt the process.

[contextly_sidebar id=”HlwSxIxTKDEGFS82mNJVQABuP0t3KCGs”]The plaintiffs, who are members of the Public Utilities Workers Union (PUWU), filed the suit demanding, among other things, an injunction to halt the Compact between Ghana and the Millennium Challenge Corporation (MCC).

The Judge, Justice Lorrenda Owusu, after hearing the concerns of the applicants, advised the government to take note of the effects of their actions with the interlocutory injunction application still pending.

PUWU sued the government over moves to hand over the operations of the company to a concessionaire without any redundancy package for them.

In their suit, they are seeking a perpetual injunction to restrain the defendants, their assigns and privies from continuing with the Compact Agreement between the government of Ghana and the MCC.

The compact was signed in August 2014, geared towards the reform of the electricity distribution sector of Ghana, by among other issues, appointing a concessionaire to take over the distribution of electricity from the ECG and related agreements.

The Ghana Power Compact will provide Ghana with a grant of US$498,200,000 to improve the performance of the power sector.

Severance concerns

The ECG workers prayed the court, to among others, declare the decision by the Minister of Energy to conduct redundancy negotiations with individual employees of the ECG illegal, and a gross violation of Section 65 of the Labour Act, 2005 (Act 651).

They contended that, discussions that went into negotiations for the sale of ECG, did not factor the declaration of redundancy, despite the content of Section 65 of the Labour Act.

This section indicates that, where “an arrangement or amalgamation causes severance of the legal relationship of a worker and employer as it existed immediately before the close down, arrangement or amalgamation; and as a result of and in addition to the severance that worker becomes unemployed or suffers any diminution in the terms and conditions of employment, the worker is entitled to be paid by the undertaking at which that worker was immediately employed prior to the close down, arrangement or amalgamation, compensation, in this section referred to as redundancy pay.”

The court adjourned the case to October 19, to allow defendants file their affidavits in opposition, and for the interlocutory injunction application to be moved on the said date.

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By: Fred Djabanor/citifmonline.com/Ghana

The post PUWU suit: Judge cautions MiDA over ECG privatization appeared first on Citi 97.3 FM - Relevant Radio. Always.

The sector minister on several platforms consistently criticized the management of ECG for the inefficiencies within the company.

ECG is under consideration for a concessionary agreement.

According to Mr. Manteaw, Mr. Agyarko might have a hidden agenda against the company.

“If the minister [of Energy] does not have any hidden agenda, then I think what he is doing is not helpful. But if he has hidden agenda to give ECG a bad name in order to hang her to take her to the path that he wants to take her then I’m not sure some of us will take it lightly because there will be some kind of resistance,” Mr. Manteaw, an ardent observer of the energy sector said on Eyewitness News on Tuesday.

[contextly_sidebar id=”gOADt9OIqqjYLJNK471vm0SzskPgVwu2″]Mr. Manteaw also accused the Energy Minister of bad faith for taking such tangent because the biggest debtor of ECG was government.

According to him ECG is struggling because of huge debts owed it by government and some institutions in the country.

“…Because there is an ongoing dialogue it doesn’t make for good faith for the Minister of Energy to take any least opportunity he gets to chastise ECG and to speak to the so called inefficiencies at ECG especially where he deliberately overlook government’s own complicity in actually bringing ECG where it is today. We are all aware that government’s indebtedness to ECG is the biggest challenge facing the cash flow situation that ECG finds itself today. And so if the Minister goes on a trajectory of lambasting ECG without speaking to the fact that government itself has been negligent in honouring its obligations to ECG then it’s a demonstration of bad faith,” he argued.

ECG privatization deal

The Ghana government is seeking to cede ECG under a concessionary agreement to allow private participation in the affairs of ECG for a period of 25 years.

The deal is part of the Ghana Power Compact with the Millennium Challenge Corporation (MCC) for 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 agreement has suffered some setbacks in the past because some workers of ECG complained that the deal is not in the interest of the country hence was unable to kick start in the previous administration.

Bidders’ conference

Meanwhile, the incumbent New Patriotic Party (NPP) is hoping to court some consensus on the deal in order to implement it.

Speaking at the first Bidders’ Conference on in Accra on Tuesday, Mr. Agyarko said there was the need to adopt measures to prevent ECG from collapsing.

He 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 organizations 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,” he added.

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By: Godwin Akweiteh Allotey/citifmonline.com/Ghana
Follow @AlloteyGodwin

The post ECG privatization: Energy Minister might have hidden agenda – Manteaw appeared first on Citi 97.3 FM - Relevant Radio. Always.

Why is government giving out ECG on concession?

According to the Government of Ghana, the Electricity Company of Ghana is inefficient. In its view, ECG is so because its (1) Operational loses are too high (2) There are frequent power outages and (3) due to non-collection or under collection of bills.

How did government arrive at these conclusions?

The Millennium Development Authority’s Compact II [Compact II explained herein] hired the services of the International Financial Corporation IFC, of the World Bank, to carry out an assessment of the Electricity Company of Ghana. After the assessment, the challenges quoted above by government were what the IFC of the World Bank found.

What is ECGs reason for these inefficiencies?

The power supplier has stated the following as reasons for its ineffectiveness.

(1) The largest debtor of the ECG is the Government of Ghana, and its institutions and agencies. Government of Ghana is not paying its bills. Even if it does make any payment, they are for power it has used for over a year. [How do you use power today and pay for it in 2017?]

(2) Adequate power is generated by the Volta River Authority and other independent power producers for effective delivery by ECG affecting volume of sales and turnover

(3) There is political Interference in the managerial and governance activities of ECG

(4) Lack of cost reflective tariffs caused by inherent subsidies that are not paid by the Government Of Ghana

(5) Transmission capacity

(6) There are problems with metering, impacting negatively on revenue mobilization and commercial losses and (7) Managerial challenges impacting negatively on staff morale and discipline.

What is government’s solution to ECG’s inefficiencies?

After the IFC working on the orders of the Millennium Development Challenge’s Compact II found the inefficiencies of the ECG, it recommended that the ECG’s distribution business be given out on a single or private concession.

In fact, as part of the terms and conditions under the Compact II, before Ghana could access the US$498.2 million to be provided by the US Government, ECG “MUST” be given to a private sector company to operate and manage its distribution business. [1]

Government of Ghana followed the recommendation and opted for a single concession for a period of 25 years. [Private monopoly]

What is MiDA’s Compact II?

Before talking about the MIDA Compact II, let us understand the Compact I. The Millennium Development Compact I was first signed between Ghana and the United States in February 2007, by the erstwhile Kuffour administration and ended in 2012.  Benefits from it were the upgrade of sections of the NI road called the George Walker Bush Highway, Improvement in Ferry for Volta Lake, Establishment of Perishable Cargo Center at Kotoka International Airport and the Improvement of some trunk roads and feeder roads.

The Compact II [The brain behind giving ECG on concession]

The Compact II was signed by the John Mahama led administration in August 2, 2014. Compact II is targeting the energy sector. In it, the compact aims at directly supporting the energy sector strategic objectives to achieve power supply sufficiency including export to neighboring countries. It is going to achieve this by implementing these programs

(1)        ECG Financial and Operational Turnaround Project

(2)        NEDCo Financial and Operational Turnaround Project

(3)        Regulatory strengthening and capacity building project

(4)        Access project

(5)        Power generation sector improvement project[2]

(6)        Energy efficiency and demand side management project

(7)        Monitoring and evaluation and economics

(8)        Environmental and social performance

(9)        Social and gender integration

The concession and point 1&2

Per the compact II, in order to turn around the financial and operational functions, the ECG MUST be given on concession. Is the NEDCo also going to be given on concession? Answer is Yes! [The rest of the points will be featured in part 2 of this article]

Which companies have tendered in their bid to run the distribution business of ECG?

Following the request for qualification for concession for the management of, operation of, and investments in the Electricity distribution business of the Electricity Company of Ghana for which submissions closed on 9^th May, 2016, a total of 11 applications were received by MiDA. But after pre-qualification application was completed, the following 6 entities were shortlisted

(1)        Engie Energie Services SA from France

(2)        Enel S.P.A from Italy

(3)        Manila Electric Company from Philippines

(4)        Consortium of CH Group, EDF SA, LMI Holdings and Veolia SA Ghana/France collaboration

(5)        Consortium of BMX Ghana Limited and Xiaocheng Technology Stock Company Limited and Shaanxi Regional Electric Power Group Company Limited from China and Ghana

(6)        Consortium of The Tata Power company limited and the CDC Group PLC from India

What will be the work of the ultimate winner among the six?

1. The ultimate winner will manage the distribution business of ECG for a period of 25 years; a private monopoly
2. The concessionaire will then operate, maintain and invest in the distribution assets of ECG, under a Lease and Assignment (LAA).

Does the ECG agree to the Compact II listings above?

Yes.

Does the ECG agree to the proposed concession?

No

What is ECG’s solution to the challenges?

According to the ECG, the company’s troubles can be turned around to achieve the Compact II’s without Private Sector Participation [PSP] through

(a)        a disciplined managerial and governance transformation devoid of political interference;

(b)        Appointing a dynamic and competent leader through a competitive process on a fixed term  contract (5 years) renewable;

(c)         Binding contract based on key performance indicators (which can be independently verified;

(d)        Free hand to manage and operate the distribution business on sound business and public service ideals and GOG meeting its obligations and ensuring MMDAs and government institutions pay for power consumed on regular short term intervals.

(e)        Availability  of reliable and quality power to enhance the growth of the economy

(f)          More IPPs to come into the sector to increase generation and eliminate “dumsor” once and for all.

This ends part one of the ECG concession debate. In part two of the article, you will see the good, the bad and the ugly with the concession deal.

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By: Obrempong Yaw Ampofo

The post Obrempong writes: The ECG concession, all you need to know [Part 1] appeared first on Citi 97.3 FM - Relevant Radio. Always.