ECG concession about money

ECG concession about money

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…Kite boss expects deal to bring in cash government doesn’t have

…PUWU asks for more details

 

By Ernest KISSIEDU

The Executive Director of energy sector think tank, Kumasi Institute of Technology and Environment (KITE), Ishmael Edjekumhene has noted that in order to help solve the energy problems facing the country, there is the need to recapitalize the Electricity Company of Ghana (ECG) and make it more efficient.

“Let us not forget where we are coming from and what has brought us where we are; bottom line is ECG needs money. We need to recapitalize the ECG and government; the owner of ECG doesn’t have that money.

“Previously, government used to borrow money for ECG. And those facilities are no longer working out. Government itself is borrowing at commercial terms so there has to be a way in which the money that ECG makes could be found,” Edjekumhene told Business Day Ghana in an interview.

He was reacting to government’s decision on the issue of the sale or partial privatization of ECG. President Akufo-Addo had indicated during the May Day celebrations last week that his government was taking a second look at the ECG Compact.

According to the President, “We are driven by two considerations: we are as concerned, as the workers, that the reforms should not lead to involuntary job losses and we should find a long term resolution to the nation’s electricity problems.”

“In this regard, government has amended the terms of the concession agreement to require that: (1) Ghanaians own at least 51% of the concession; (2) there should be no involuntary lay-offs as a result of the concession; (3) the term of the concession would be reduced from 25 to 20 years. We believe that these amendments meet the aspirations of Ghanaians in protecting the jobs of workers and in assuring the control and viability of ECG.”

The money factor

KITE’s Edjekumhene believes that bringing a concessionaire means that they come to commit not only their managerial expertise, but also some money to help address the problem. “For me, that is all that is happening with ECG.”

He explained that because in the past, the country had bad experiences with some of these arrangements, everybody is scared but if, “we soberly reflect, we probably would come to the realization that something has to be done to the ECG.”

Mr. Edjekumhene added that people are just too emotional with the ECG issue. “Workers are now saying ECG must be given to them to run it themselves. I mean you have been running it for how many years now and what has been the result? So all these ideas, what happened?” he asked.

Furthermore, the executive director stressed that the concession of ECG under the Compact II new agreements, does not entail change in ownership. “Government of Ghana still retains ownership of ECG that is how come they have been talking about a period of 20 or 25 years.”

Nonetheless, he observed that as a public utility, the ECG has not been driven mainly by efficiency. “Are we saying that everybody in ECG is needed? If we were to forget about the fact that we are also using it as a vehicle for employment, we can realistically say that they could do the job with fewer people.”

According to him, so long as the concession is in place, people are going to lose their jobs involuntarily and such people must be given packages as compensations.

“So if that has been secured indefinitely, that is also a plus on the part of government. As far as I’m concerned, I don’t even think there is room for negotiations on the concessions so once parliament ratifies the whole agreement, it would have been positive for government.”

He however advised that no matter what happens, government should make sure that the interests of the workers are being taken good care of.

Meanwhile, Mr. Michael Adumatta Nyantakyi, General Secretary of Public Utility Workers Union (PUWU), has deferred comment on the issue and said “until we see the details surrounding these new proposals, we cannot comment. How can we comment on something we barely have details of? We are waiting to get the details surrounding this new decision by government.

“However, we have not changed our original position on the issue that concession is not the best option.”

 

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