Workers union still against release of ECG to concessionaire
The Public Utility Workers Union (PUWU) has reiterated its stance against the proposed release of the Electricity Company of Ghana (ECG) by the government to a concessionaire.
Advertisement
It insisted that the approach adopted by the government to improve the energy sector with the help of a concessionaire was not the solution to the problems facing the ECG, and therefore, called for what it described as ‘other viable alternatives for the company.’
The PUWU, an affiliate of the Ghana Trades Union Congress (TUC), deduced that the thrust of MIDA’s programme to transform ECG, among other interventions is a two-pronged approach; strengthening governance and improving management.
The Deputy General Secretary of the PUWU, Mr Michael Adumatta Nyantakyi, in an interview with the GRAPHIC BUSINESS in Accra, quizzed that “if governance was a challenge and it is the government that appoints the board, then it should find a way to deal with it, but not necessarily think that it is only the private sector that can fix it.”
“The appointment of a managing director (MD) who is the head of the management team is the responsibility of the President through a board. So both governance and management inefficiencies are all issues the government cannot run away from,” he said.
Again, Mr Nyantakyi said efficient management was a challenge at the ECG because over the years it had not been allowed to operate without any governmental interference.
“Basically within the past six years there have been frequent changes of MDs, about five MDs. Which company can make progress with such changes at the top?” he asked.
The government signed the second Millennium Challenge Corporation (MCC) Compact known as the “Ghana Power Compact” which 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.
Touted as the largest United States government-funded transaction under President Obama’s Power Africa initiative, it is expected to invest US$498.2 million to support the transformation of Ghana’s electricity sector and stimulate private investment.
Losses
The union said a major contributor to the losses of the ECG was the issue of meters procured by ECG, both credit and pre-paid meters.
It alleged that all the procurements were mostly politically influenced and that many of the meters in the ECG system were ineffective and created problems for the company.
Again, PUWU raised issues with the Self Help Electrification Project (SHEP), saying, “In some regions meters fixed by ECG were clandestinely removed and replaced with SHEP meters. It takes a long time for ECG to identify such meters and the customers use the power without paying for it,” Mr nyantakyi said.
Also, he alleged some of the contracts for installation were awarded to political activists, most of whom hired contractors to do the installation without supervision, hence the delays.
Tariff structure
The rising tariff structure, the union alleged, was part of the preparatory works to enable the private sector to take off smoothly.
“Without tariff structures that are deemed to be economically viable, there is no way anybody can operate a distribution company and make profit. So all the recent increases and the urge to ensure that there is automatic tariff adjustment on quarterly basis are all part of the preparatory works for the private concessionaire,” he said.
He added that wherever concessions have been implemented all over the world, tariffs end up rising.
Recommendation
The union recommended to the government to consider alternatives that included providing a stable management.
“It can be given a period of say five years with specific performance indicators to prepare the company and bring it to a point where it can easily be listed on the Ghana Stock Exchange (GSE) and what ever capital needed for investment can be raised locally and once that is done any accrued profit is likely to be retained if not wholly, substantially to help the development of Ghana as a whole”, he said.
“The foreign investor will repatriate all the profits made to its shareholders outside the country,” Mr Nyantakyi concluded.