VRA senior staff petition Speaker over proposed merger
The Senior Staff Association of the Volta River Authority (VRA) haspetitioned the Speaker of Parliament, Alban S.K. Bagbin, over the proposed merger of hydro power generation systems to separate them from thermal power production in the country.
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The workers contend that the move, which is intended to invite private investment into hydro production, will ultimately weaken the viability of hydro power production and increase the cost of power to consumers.
The petition, dated September 16, 2024, insisted that dismembering the VRA in its current form would negate the investments and diversification the authority had made over the years.
Their arguments were premised on documents that contain proposed Bills to Parliament intending to realign the energy production and distribution sector.
The documents, sighted also by the Daily Graphic, are the Ghana Hydro Authority Bill, 2024; Ghana Power Distribution Authority Bill, 2024; Ghana Thermal Authority Bill, 2024; and Ghana Nuclear Power Corporation Bill, 2024.
The new arrangement will remove VRA from the fray altogether and merge hydro power generation from Volta and Bui.
It will further strip the Volta generation system of thermal production responsibilities and merge the distribution channel involving the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo).
The stated objectives include to improve operational efficiency, attract private sector financing into the operations of state-owned power plants, minimise financial support from the government, and minimise the cost of power generation and, ultimately, the cost of power supply to consumers.
But the VRA Senior Staff Association argued that the proposed arrangement would deprive hydro generation of the necessary financial injection and spark a profiteering venture by private investors, which would ultimately burden the consumer.
Capacity
The petition, indeed, stressed that the VRA had built and maintained the capacity to manage and maintain thermal power alongside hydro generation systems, and that decoupling the two production systems could not be for the sake of efficiency or the lack of it.
"The Volta River Authority, with its level of professionalism and the competence of its crop of staff, has shown beyond reasonable doubt that it is capable of efficiently managing the diversified portfolio and the affairs of the authority.
The recent engineering and construction of the Anwomaso Thermal Power Station, located near Kumasi (i.e. the Ameri Plant), attests to the ability of the VRA staff to turn around the business of the authority and make it profitable, given that all policies are fairly implemented," the petition said.
"The decision by VRA to diversify into thermal power generation was based on a professional analysis of cyclical drought experienced by the country, coupled with the realisation that the country’s growing energy needs could not be met from hydro sources only.
"This was further buttressed by prudent business analysis of the synergy of a diversified generation portfolio," it further stressed.
The petition is the latest effort by the VRA Senior Staff Association in a long battle to keep the authority afloat in the midst of difficult circumstances.
In April, this year, the group voiced concerns via a statement over the authority's financial frailties at a time the members claimed a cash waterfall mechanism arrangement was starving the authority of financial resources.
Last Friday, members of the association embarked on simultaneous protests in all VRA facilities across the country as part of a coordinated measure to press the state to reverse the realignment process.
"We see these proposed mergers as a deliberate ploy to completely obliterate the name 'Volta River Authority' and the significance of the visionary leader, Osagyefo Dr Kwame Nkrumah, who pioneered the establishment of VRA, from the history of Ghana," the petition alleged.
It states that the whole realignment exercise is being done for ulterior reasons given the reality of uncertainty that has confronted hydro power generation in the country over the years.
"The concept that the proposed Ghana Hydro Authority operates an all-hydro generation plant within the power operation context is difficult to justify. This is mainly due to the year-to-year variations in the rainfall pattern and the vulnerability it imposes on a power company dependent on the weather (a natural event) for its operations and consequently revenue," it said.
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It referenced specific cases in 1983, 1987, 1998 and 2010-2016 when the country experienced power outages because the Akosombo Lake level went below the minimum operating level of 240 feet.
"In the unfortunate incident of a prolonged drought, how will the Hydro Authority survive or be sustained? The issue of climate change is a matter of global concern today, and this cyclical drought is likely to be compounded in the future.
The threat of desertification and its impact on the inflow of water into the Volta Reservoir poses a major threat to the sustainability of some of the arguments for the merger," the petition further argued.
"According to the World Economic Forum (WEF) Global Risk Report (2024), extreme weather events are anticipated to become even more severe, as the top-ranked risk over the next decade," it added.
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The petition said the Bui Power Authority was"performing well since 2019” per the 2023 assessment by the State Interests Governance Authority.
"The case of the VRA is different because of foreign exchange losses. That notwithstanding, the VRA has been able to meet its payment obligations to key suppliers, and has stopped soliciting support from the government since 2020.
“For example, in 2023, VRA incurred a net exchange loss of GH¢591.43 million. However, the authority made a modest operational profit of GH¢287.97 million," it said.
It further questioned how the merger and subsequent creation of the Ghana Hydro Authority would prevent the perennial non-payment of bills by the metropolitan, municipal and district assemblies, address the huge foreign exchange losses incurred by VRA, address the impact of high inflation on energy sector players, and inequity and inadequacy in the payments under the Cash Waterfall Mechanism.
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