ECG on concession won’t end power crises
The issue of giving the Electricity Company of Ghana (ECG) to a concessionaire came as a surprise to most Ghanaians, especially stakeholders in the power and energy sector.
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But the situation has became more revealing after the government signed a second compact with the Millennium Challenge Corporation (MCC) of the United States, known as the “Ghana Power Compact”. The compact seeks to double access to power, improve the energy sector with special attention for scaling up private sector participation (PSP) in the ECG in an effort to address power generation and supply challenges.
Compact two of the MCA between the government and the MCC is a power compact aimed at transforming the ECG in terms of technology and efficiency in power distribution to become a stronger company able to meet the current and future needs of Ghanaians.
Under the move, the government will enter into a contract with the private sector partner which will have exclusive rights to operate, maintain and invest in the ECG for a stated number of years, beginning January 2017. The time stated is a minimum of 25 years.
In spite of the beautiful picture often painted about the move, there are equally gloomy and doomsday stories surrounding that decision.
The Public Utility Workers Union (PUWU) has registered its disagreement with the proposed release of the ECG by the government to a concessionaire.
It insisted that the approach to improve the energy sector with the help of a concessionaire was not the solution to the problems facing the ECG.
The Deputy General Secretary of the PUWU, Mr Michael Adumatta Nyantakyi, indicated that if corporate governance at the ECG was a challenge and it was the government that appointed the board, then it should find a way to deal with it, but not necessarily think that it was only the private sector that could fix it.
The appointment of a managing director (MD) who is the head of the management team is also the responsibility of the President of the Republic through a board. So both governance and management inefficiencies were issues the government could not run away from, according to the board.
The Graphic Business wants to associate itself with the stance of the PUWU that the privatization of the ECG is obviously not a good alternative to ending the challenges in the energy sector.
The government must understand that certain state entities such as the Ghana Water Company Limited and the Electricity Company of Ghana are by themselves monopolies and should it fall in the hands of the private sector can spell doom for the country. They may eventually seek to increase prices with no controls at the detriment of the consumer.
If it lies within the government to control good governance and ensuring liquidity at ECG they should do so and not run away from it.
The union at the ECG has often touted how the company is owed hundreds of millions by the government, the payment of which could unlock its financial viability once again. This will enable the ECG to make the right investments in equipment in order to reduce the power outages arising out of obsolete equipment and therefore providing quality services.
Releasing the ECG to a concessionaire will only be another facilitation of capital flight. This is because the principals will always have to transmit their proceeds and returns, as well as dividends, abroad. This will further put a strain on the local currency, as it will create forex challenges for the economy.
Ghana, after almost 60 years of independence, should by now learn how to do majority of things on its own, instead of putting all our hopes on foreign investors. It is time to encourage our own people to do it and do it right. Let not the ECG go anywhere — it should stay Ghanaian, run by Ghanaians for Ghanaians.