This is the concern of Policy Analyst with ISODEC, Dr. Steve Manteaw.

His argument follows the submission of proposals by two companies bidding for the management of the power distribution company.

But how will this affect the outcome of the program?

Citi Business News has been engaging industry players who share divergent views on the matter.

Click to listen to full audio report.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Red flags over local content in ECG as bidders submit proposals (Audio) appeared first on Citi 97.3 FM - Relevant Radio. Always.

The latest follows the close of submission of request for proposals today, March 26, 2018.

A statement from the Millennium Development Authority (MiDA) and copied to Citi Business News said that at the close of the submission, two companies namely; BXC Ghana and Manila Electric Company (MERALCo) had submitted their bids.

It is interesting to note that French electricity conglomerate EDF and French transnational company Veolia, together with their local partners CH Group, did not put in bids for the private participation.

The businesses had raised concern over the 51 percent local stake in the new entity.

It is unclear what led to their latest decision.

Meanwhile MiDA says the evaluation of the bids is expected to be completed in April 2018.

Read full statement below;

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post Bidders for ECG concession drops to two appeared first on Citi 97.3 FM - Relevant Radio. Always.

The companies, French electricity conglomerate, EDF, and transnational Veolia, together with their local partner, CH Group, say the limitations will affect their finances and restrict any enforcement of the rights of lenders.

[contextly_sidebar id=”pocK5VTDf33wPnEhpjBDYJCwQYztSZgP”]However MiDA, in a release said it will work in the interest of the country.

“MiDA confirms that it has received such a letter on the bidders’ concern about the government of Ghana’s policy to have 51% Ghanaian ownership in the structure of the concession. MiDA wishes to assure all Ghanaians that it is managing the transaction on behalf of the government of Ghana and would ensure that the transaction is managed for the benefit of the people of Ghana,” the release indicated.

Ghanaians must hold majority shares

Meanwhile, the Public Utilities Workers Union (PUWU), insists government must ensure that Ghanaians hold majority shares in the concession.

The General Secretary of PUWU, Michael Adumatta Nyantakyi in an interview with Citi News indicated that though the concession is not the best option, it will be more prudent for majority to be in hands of Ghanaians than foreigners.

“We have said that the concession is not the best option, but if that is still the option- that is if majority is still in the hands of Ghanaians, it is better than majority in the hands of foreigners.”

The Compact II

President Nana Addo in 2017 announced that Ghana had renegotiated the deal to control 51 percent of the Power Compact II with the Millennium Challenge Corporation(MCC).

Under the Power Compact, six projects will be implemented to address the the root causes of the unavailability and unreliability of power in Ghana

The project include 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,.

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

Ghana to get over 498m dollars

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 would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars (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$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.

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

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By: Marian Ansah/citifmonline.com/Ghana

The post ‘We’ll ensure ECG concession is in Ghana’s interest’ – MiDA appeared first on Citi 97.3 FM - Relevant Radio. Always.

This should allow the injection of some five hundred million dollars ($500m) into the operations of the power distributor.

The CEO of MiDA, Mr. Martin Esson Benjamin his outfit will evaluate the proposals to be submitted by the four shortlisted applicants by March 2018 to inform the next line of action.

“At the moment we have put the bids out, the Requests for Proposals are also out; we have two more months for the four bidders who are interested to bring their proposals. Then we evaluate and then we hope that we can beat the September 6 deadline…So far I think that my joy is the fact that there are still people who are willing and able to be led to move the process forward so my energies are now concentrated on looking at the loose ends and putting things together,” he told Citi Business News.

The four shortlisted concessionaires are expected to submit the Request for Proposal and financial plan of revamping the electricity company of Ghana.

This follows the completion of an assessment of the installations of the ECG, last year (2017).

Mr. Esson Benjamin also tells Citi Business News the power sector should see a turnaround soon with the completion of the necessary processes.

“When we have gotten the change, then we will see how best we can use the change to untie the areas that have problems. But so far I think we have lost time and there is no argument about that; there’s a lot of water that has gone under the bridge,” he stressed.

Under the Power Compact Two agreement, the selected concessionaire will partner the US government in improving the operations of the ECG.

The US government through its Millennium Challenge Corporation has already committed some 500 million dollars into the project.

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By: Pius Amihere Eduku/citibusinessnews.com/Ghana

The post MiDA to select ECG concessionaire by September 2018 appeared first on Citi 97.3 FM - Relevant Radio. Always.

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.

Speaking to a group of journalists and officials of Millennium Development Authority (MiDA) after the inauguration of a 7-member ECG PSP Stakeholders’ Committee in Accra, the minister said he was shocked that ECG has GH¢130 million a week in receivable, but only collects GH¢50 million. “What happens to the balance? You look at their inventory and they have 20 years’ supply of spares. You have locked up that money in spares that would be obsolete,” he wondered.

Monthly Debt Piling

Mr Agyarko noted, “ECG’s debt accumulation on a monthly basis is GH¢66 million. Every month, they add GH¢66 million to their cost. And if this happens in the next five years, what prevents the EOCO from laying you off?”

Failure To Account For Power

“How is it that the power transmitted to EC, they cannot account for it over 20 years? People try to blame this small power theft, illegal power connection. That’s not where it is. There’s something called district boundary metering. We don’t do it. So a district like Somanya does not know how much power has been given to it. The grid power system also does not know how much power it has given to Somanya and how much has been paid. It is like say, I supplied petrol to a petrol station, but I don’t know how much petrol I put in the underground tank. So the station manager can come and say ‘Oh here’s GH¢100. That’s all you brought,’ without you the supplier knowing how much you put in their tank. So unless we address this district boundary metering, that power loss will not go down. And each percentage of power lost is 60 million cedis. So you are losing 21 percent from start. And then the balance of 70 that you get, you only collect half of the money,” the minister lamented.

US Embassy Demands Bills

“I had a discussion with the managing director. American Embassy has 160 facilities in Ghana. They have not been billed for two years. So they went to ECG and said ‘look, we owe you money. Bring us a bill. Bring us pre-paid meters. We will use it for one year, and whenever we use, we will multiply it by 3 and give it to you.’ Up to now, the ECG hasn’t been able to do that,” he noted.

MTN Too Calls For Bill

According to Mr Boakye Agyarko, “MTN called me and said ‘we owe ECG GH¢35 million. We are trying to pay. We are waiting for wire instructions. And we’ve been waiting for one month. So I went to ECG and I asked them. What’s going on? And they said ‘Oh the person who is supposed to issue the instructions is gone on leave’….And they have as many as 6500 staff and still growing.”

Negative Networking Capital

Indicating that ECG’s networking capital was minus 2 billion cedis, he said, “We have by act of omission or commission, run ECG down. It has to be picked up from the floor.

“I live in Krobo Odumase, there are places there where ECG billed an electrician with just a bulb in his kiosk for GH¢4,000 a month. And the impudence on the part of ECG is they want to go and disconnect that person. ECG has to change.”

Experts believe that the resistance being put up by some organizations to government’s privatization moves of the ECG is just a ploy to cover up the company’s deep sores and its current helpless state.

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Source: Daily Guide

The post Energy Minister shocked by ECG rot appeared first on Citi 97.3 FM - Relevant Radio. Always.

According to the MP, who was also a Deputy Power Minister in the Mahama government, Nana Addo’s announcement of amendment to the Private Sector Participation (PSP) compact of the Electricity Company of Ghana (ECG) with the Millennium Challenge Corporation (MCC), has left room for speculation about the deal.

[contextly_sidebar id=”RyQIY0pgd9tzcF6A4dvNyUmgO1zHdsiW”]“The first question is, has this agreement been effected or is it just a proposal? I have heard some government spokespersons indicate that it is a proposal. Others have indicated that it is changed in the agreement,” he noted on Eyewitness News.

Mr. Jinapor thus said he has written to the MCC and Millennium Development Authority (MiDA), “to seek confirmation of a change in this agreement.”

Minority stake for concessionaire would not work

The MP noted that, under the Mahama administration, during the negotiations with MCC and MiDA, they considered offering a minority stake, but indications were that” the market was not going to be responsive if we insisted that the concessionaire should own a minority stake because the concessionaire was supposed to inject a minimum of $250 million and also run ECG effectively and efficiently.”

“What they indicated based on the findings and the research we conducted was that, if you say that the concessionaire should own a minority stake, it [the deal] would not work,” he added.

In view of this, Mr. Jinapor said, “first of all, we need clarification from MiDA and we need confirmation from the MCC whether indeed there has been an agreement to change the initial agreement, such that the concessionaire will own only 49 percent, which will be a minority stake, and if that is so, what has informed that change in position?”

“I think that within the shortest possible time and with a sense of urgency, the MCC and MiDA must come clean on this subject matter because it is a national issue. If they have reviewed the agreement, if they have changed it, they should let us know.”

What Nana Addo said about the agreement

Under the agreement, which is known as the Power Compact II, the government is expected to allow about 80 percent private sector control in the ECG for the country to benefit from a cash injection of about $1 billion over a period of 5 years.

But speaking to Ghanaian workers at the May Day parade in Accra, President Akufo-Addo maintained that, government was targeting more than the 20 percent control agreed by the Mahama government.

“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”

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

The post Clarify changes to ECG privatization compact – John Jinapor appeared first on Citi 97.3 FM - Relevant Radio. Always.

MiDA, is one of the defendants in a lawsuit filed by a member of the opposition New Patriotic Party’s (NPP) communications team, Saaka Salia, that is challenging its [MiDA’s] competence to serve as an advisor in the concession arrangement for the ECG.

[contextly_sidebar id=”Lo51FqZNouZ29ErAkavMJWn0tiyfO9o6″]A letter written by Mr Saaka Salia and sighted by citifmonline.com cautioned MiDA to cancel the planned event to avoid being in contempt of court.

The letter said “This is in blatant contempt of court as an injunction is pending in court against defendants from proceeding with or in any way whatsoever dealing with or participating in any processes touching and concerning further activities or dealings with the ongoing PSP in ECG processes in proposed Concession for the Management of, Operation of, and Investments in the Electricity Distribution Business of the Electricity Company of Ghana Limited, until the case has been determined.”

“Please be guided that recently the Electoral Commission suspended receiving nomination fees for the 2016 elections when it was served with similar processes. It only called for those fees after the court had heard the application and dismissed it,” he letter added.

Read the full letter below:

MILLENNIUM DEVELOPMENT AUTHORITY

Dear Sir,

RE: CAUTION

It has come to my notice, rather shockingly, that you, a defendant in the case I filed impugning the ECG PSP, have slated a bidder’s conference for Monday 31st October here in Accra.

This is in blatant contempt of court as an injunction is pending in court against defendants from proceeding with or in any way whatsoever dealing with or participating in any processes touching and concerning further activities or dealings with the ongoing PSP in ECG processes in proposed Concession for the Management of, Operation of, and Investments in the Electricity Distribution Business of the Electricity Company of Ghana Limited, until the case has been determined.

All four Defendants have been served with the injunction application filed earlier this month and a first court attendance slated for Wednesday 2nd November 2016.

Please be guided that recently the Electoral Commission suspended receiving nomination fees for the 2016 elections when it was served with similar processes. It only called for those fees after the court had heard the application and dismissed it.

You are cautioned against this act in trying to overreach the courts of Ghana and treat them with disregard as you did and the Energy Commission accused you of forging its logo, and the PURC also accused you of usurping its mandate in the PSP process.

Be reminded that the courts attention shall be duly drawn to this contemptuous act and all those participating cited for contempt.

Saaka Salia

Plaintiff

CC:

THE ATTORNEY-GENERAL – 1ST DEFENDANT

PUBLIC UTILITIES REGULATORY COMMISSION -3RD DEFENDANT

ENERGY COMMISSION – 4TH DEFENDANT

THE REGISTRAR – HIGH COURT OF JUSTICE, GJ, ACCRA

Background

Mr Saaka Salia in September 2016 sued the Millennium Development Authority (MiDA) over the planned concession of the Electricity Company of Ghana (ECG), arguing that MiDA is not fit to participate in concession arrangement for the ECG as an adviser.

Accordin to him, MIDA is not fit to participate in concession because its conduct breached Ghana’s laws after it authored and circulated a draft tariff methodology.

In an interview with Citi News, Mr Salia said “the reason for the breach is that, MiDA as well as the IFC [International Finance Corporation] collaborated and forged a document purported to be coming from the PURC, and the Energy Commission and to that extent, they allowed that fraudulent document to fill the part of the transaction process.”
Suit against ECG concession ‘baseless’ -MiDA

Meanwhile, the Millennium Development Authority (MiDA) has described a suit filed against the Power Compact II which seeks to privatize part of the Electricity Company of Ghana as lacking merit.

In an interview with Citi News, the Chief Executive Officer of MiDA, Ing. Owura Sarfo said MiDA sees the suit as incompetent.

“We have been served a copy of the suit. I will not go into the merits of the case because the case is in court. But all I will say is that that suit is incompetent, that suit is of no merit and that suit is totally false,” he said.

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By: Jonas Nyabor/citifmonline.com/Ghana

The post MiDA faces contempt over planned ECG bidder’s conference appeared first on Citi 97.3 FM - Relevant Radio. Always.

A group known as the Coalition against the concession of ECG, contends that the proposed plan by government is not in the best interest of the nation and must not be allowed to go through.

[contextly_sidebar id=”pbB9S093iDjlAAwhBoJPc2sufXlEOFJE”]Workers of ECG have been protesting against the deal, which is under Millennium Challenge Corporation (MCC) Power Compact II, claiming it would lead to massive lay-offs and also not in the interest of Ghana.

But the Millennium Development Authority (MiDA) had assured that the deal will not affect jobs.

Other suit involving compact

A member of the opposition New Patriotic Party’s (NPP) communications team, Saaka Salia sued MiDA, arguing that it is not fit to participate as an adviser in the concession arrangement for the ECG because its conduct breached Ghana’s laws after it authored and circulated a draft tariff methodology.

Joined to the suit was the PURC, the Attorney General’s office, and Energy Commission. Mr. Salia argued that MiDA breached Ghana’s laws after it authored and circulated a draft tariff methodology.

Mr. Salia’s writ asserted that, the PURC, not MiDA is the body with exclusive mandate by law to provide guidelines for determining tariffs and levels of tariffs, and in doing so in the manner prescribed by Act 538.

Ghanaian petitions US gov’t

A Ghanaian citizen, Richard Asante Yeboah earlier petitioned the US government over some aspects of the ECG privatisation deal.

Mr. Asante Yeboah told Citi News the deal is not in the interest of Ghana and must be reviewed. He explained that the petition sough “to indicate to them and also make it clear to these individuals that there ought to be a full scale investigation into the whole process leading into this ECG concession arrangement.”

About the Compact

Ghana and the United States have signed an agreement for the release of the $498,200,000 grant meant to improve power distribution in the country under the second compact of the Millennium Challenge Account.

Under this compact, which will last for five years, Ghana  has agreed to give up the management of the Electricity Company of Ghana (ECG), for a private company in the hope of bringing efficiency in ECG’s operations.

This compact is the largest U.S. Government transaction to date, under Power Africa, and is expected to serve as an anchor for increased American engagement in Ghana.

The Ghana Power Compact programme consists of 6 major projects each, with a set of activities aimed at contributing to support the transformation of Ghana’s power sector.

These six projects are ECG Financial and Operational Turnaround (EFOT) Project, Northern Electricity Distribution Company (NEDCo) Financial Turnaround Project, Access Project, Regulatory Strengthening and Capacity Building project, Energy Efficiency and Demand Side Management Project, and the Power Generation and Improvement Project.

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

The post ECG privatisation: Court to hear injunction suit today appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Millennium Development Authority (MiDA) signed an agreement with government to cede part of ECG to private partners under the Power Compact II.

But ECG workers had accused MiDA of acting in bad faith in the entire cession process

Mr. Asante Yeboah told Citi News the deal is not in the interest of Ghana and must be reviewed.

He explained that the petition seeks “to indicate to them and also make it clear to these individuals that there ought to be a full scale investigation into the whole process leading into this ECG concession arrangement.”

Compact II in full force

Meanwhile, the Power Compact II earlier this month came into full force despite a law suit against MiDA over the concession of the ECG.

But the Public Utility Workers Union (PUWU) had insisted that MiDA acted in bad faith in announcing the deal because they had objections over aspects of the agreement.

According to the General Secretary of PUWU,  Micheal Adumatah Nyantakyi, the ECG can be made profitable without necessarily handing over the company to a private partnership arrangement under the compact two.

ECG workers protest

ECG workers embarked on a number of exercises including a sit down strike and demonstration in a bid to protest the concessionary arrangement.

Ghana to get over 498m dollars 

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 would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars (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$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.

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

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

The post Ghanaian petitions US gov’t over ECG privatization appeared first on Citi 97.3 FM - Relevant Radio. Always.