Parliament approves $80m for purchase of prepayment meters
Parliament yesterday approved an $80-million credit facility agreement between the government and CAL Bank for the procurement of smart prepayment meters and accessories for the Electricity Company of Ghana (ECG).
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The prepayment meters are expected to improve the financial sustainability of the company through improved revenue collection and a reduction in system losses.
The intervention is also expected to improve network system reliability through rehabilitation, expansion and upgrade, as well as network reinforcement to make the ECG more responsive to quality customer service delivery.
Rationale for the facility
A report released by the Finance Committee of Parliament on the facility said Ghana had entered into a 25-year concession agreement with the Millennium Challenge Corporation (MCC) of the US to privatise part of the operations of the ECG.
It said the agreement required the private investor to undertake capital investments to improve the technical and operational efficiency of the company.
It said although metropolitan, municipal and district assemblies were required to allocate funds in their budgets to pay their own utility bills, some state institutions failed to comply.
Their bills, it said, therefore, became contingent liability on the government.
Therefore, it added, the provision of the prepayment meters would ensure upfront payment of energy consumption by all state institutions and thereby reduce the indebtedness of the state to the ECG.
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Debate
A former Minister of Power, Dr Kwabena Donkor, contributing to the debate to approve the agreement, said the use of prepayment meters was the best way to generate revenue for the ECG.
He said emphasis had always been put on the fact that the government owed the ECG huge sums of money, but the public failed to take into consideration the fact that the government injected huge sums of money into the company.
He called on the public to assist the ECG to reduce commercial losses.
The member for Tema East, Mr Daniel Nii Kwartei Titus-Glover, sought to know if measures had been put in place to ensure that the meters did not have the software problems that those currently in the system had.
"I want that assurance given. How are you going to calibrate these machines so that when we slot in our cards, we will not be ripped off?" he asked.