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ACEP cautions govt against 25-year ECG takeover

May 16, 2016, 8:30 a.m.

Energy and policy think-tank, the Africa Centre for Energy Policy (ACEP) has made a strong case for government

to go for a shorter term renewable contract in its plans to cede the Electricity Company of Ghana (ECG) to a private firm under a concession arrangement.

So far, 62 concessionaires have expressed interest in the concession, with only 18 of them being Ghanaian companies.

Speaking at the first citizens’ engagement on the ECG concession forum held in the Ashanti Regional capital Kumasi, Head of policy unit at ACEP, Dr Ishmael Ackah indicated that though ACEP supports the idea, the country will be placing itself at a disadvantaged position if it goes in for a long-term concession to take over management of the ailing power distributor.

He suggests that government rather goes for a contract renewable over shorter contract spans.

“Though we support the concession, we suggest it should be punctuated and with indicators to be reviewed for renewal every five years. 

“Let’s hold them accountable to reduce distribution losses to a percentage; make profit of a certain amount, reduce commercial losses at this rate; fix all prepaid meters; and at the end of the five years, we evaluate to see if Ghana is benefitting. The country will have that freedom to renew the contracts if it is in our interest. If it is not, we can decide to cancel it,” he explained.

Dr Ackah also called for the Public Utilities Regulatory Commission (PURC) to be strengthened to protect the interest of the consumer from the profit-driven agenda of a private concessionaire.

He emphasised that, “PURC per law has that mandate and authority to approve tariffs. But if they are not firm, the consumer may suffer if the company wants to increase tariffs every now and then.”

Dr Ackah also called for more private companies to form consortiums to win the contract for the concession.

He bemoaned the current trend of Ghanaians losing contracts to foreign companies, making allusion to a contract Ghana lost to the Ivory Coast in the supply of bread and water to the oil rigs in the Jubilee fields.

He recommended that Ghanaian companies form a consortium and put together their finances and experiences to win the concession for Ghana.

He believes such mergers are the only strategy local companies can adopt to break the streak of foreign companies winning contracts ahead of their local competitors.

The Head of the Policy Unit at ACEP also urged government to take seriously the issue of renewable energy to help reduce the cost associated with the generation, transmission and distribution of electricity for industrial and domestic consumption. 

The Head of Programmes at the African Centre for Energy Policy, Sergie Sargie, also stressed that ACEP as a policy think-tank would continue to examine, criticise and suggest for consideration its position on policies and programmes, particularly concerning the energy and mining sectors that affect the ordinary Ghanaian.