ECG is not being privatised — MiDA
The Millennium Development Authority (MiDA) has stated that the decision by the government to give the Electricity Company of Ghana (ECG) to a private entity on concession did not amount to privatisation of the company.
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“Management of MiDA would wish to state categorically that the ECG is not being privatised. A concession arrangement is not privatisation,” it explained, in an advertiser’s announcement published in the Thursday, August 6, 2015 publication of the Daily Graphic.
The MiDA also rejected the claim that the ECG lacked efficiency due to the government’s indebtedness to the company, saying “even if the government were to pay all that it owed the ECG today, it will still not retire all its debts”
The authority’s reaction is in response to a position paper by workers of the ECG, kicking against any form of privatisation of the company, published in the July 21, 2015 edition of the Daily Graphic.
The MiDA said the position paper of the workers contained inaccuracies and explained that under the concession, the government would enter into a contract with a Private Sector Partner (PSP) that would have exclusive rights to operate, maintain and invest in the ECG for a stated number of years.
It explained that the term “foreign private partner” as used by the workers in their position paper was misleading, adding that the PSP might be a consortium composed of Ghanaian, regional and international investors.
“The key criteria for selecting a private partner will be technical and financial capacity and not nationality”, the MiDA explained.
ECG will be for Ghana
“Ownership of ECG will remain with the government of Ghana over the concession period, after which the government will assume total control of its operations and maintenance, MiDA further explained.
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It said under the concession arrangement, the ECG workforce would be transferred to the new company which will have mostly Ghanaian managers and some Ghanaian board members, as is the case with CIE in Cote d‘Ivoire and Umeme in Uganda where utilities are highly efficient.
The MiDA said a third of the power that ECG bought went to waste through network problems, theft and operational challenges, for which reason no private entity would be motivated to produce power for the ECG to sell.
“Over the last 30 years, the government has created conditions for investors to generate power in Ghana and many such private sector entities have indicated their interest but continue to flag the difficulties with the current distribution system as the reasons why they are not investing,” MiDA claimed.
No retrenchment
The MiDA stated that there was currently no retrenchment plan in place for ECG’s 6,300 workforce, adding that “as the company grows and prospers, it is likely that additional job openings would be created both within and without the ECG in the distribution sector”.
It further stated that a technically and financially sound ECG was key to the country’s macroeconomic development, contending that the Millennium Challenge Corporation’s grant of US$498.2 million would give Ghana the opportunity to turnaround ECG and position it as a growing concern.
Writer’s email: victor.kwawukume@
graphic.com.gh