ACEP Demands More Explanation On Emergency Power Contract

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Mohammed Amin Adam
Mohammed Amin Adam

By Seibik Bugri

The African Center for Energy Policy (ACEP) has cast doubt on the readiness of the country towards receiving the two power barges being brought in to help solve some of the power crisis facing the country. As a result, ACEP is uncertain if by the end of this year the power crisis is likely to be over.

Mohammed Amin Adam
Mohammed Amin Adam

At a Press Conference at their offices at Madina in Accra yesterday, Dr. Mohammed Amin Adam, Executive Director enumerated a number of structural issues that should now been positioned or on-going to indicate the country?s readying herself for the two barges he disclosed.
Explaining further, Dr Adam noted that issues relating to the state of the machines, preparing the place where the barges will be successfully anchored offshore has not started. Also, the site at Tema is yet to be fixed for mooring and operation. Ghana has to work on transmission interconnectivity all of which are not factored in. Indeed, experts see the last quarter of 2015 as the earliest raising serious issues of ending the crisis.
It will be recalled that in his state of the nation address the President, John Dramani announced some emergency power measures to address the short-term challenges in the power sector. These measures focus on the deployment of emergency generation plants and include a 450 MW Power Barges from Karpower, 250 MW Generating Units from Dubai, and a 300 MW emergency plant by General Electric (EG).
Barges
Speaking at the Press Conference, Dr Adam also raised a series of issues relating to transparency and accountability regarding the above contracts that leaves a lot of questions than answers and concern for value for money. While we know that GNPC will guarantee the $100 million for the fuel as demanded by the contractors, Ghanaians still do not know how Ghana is funding the lease guarantee he enquired?
ACEP checks has inndicated that for the next five years that Ghana will be leasing the barge, it will cost the tax payers US $ 700 million. This excludes fuel cost. Interestingly ACEP gathered that a total outright sale would have cost Ghana for same GE power plant between US$ 180-220 million. Doubts of shady deals seem to emerge in the case of the Ameri Energy of Dubai, the Units manufactured by GE and supplied by APR Energy of the US. The question is why can?t Ghana go straight to GE, the manufacturers and purchase the generating units? Some explanations need to be done here by government. ACEP argues that if Ghana has up to US $138 million to pay for one year lease, this could buy about 6-7 of the units outright.
Shady Deals?
ACEP cries that there are more worrying reasons why Ghanaians should look at the deal once more as it does not make any economic sense to rent the plants for $ 700 million for 5 years before taking ownership when we could have bought them outright for US $ 22million. In addition, GRIDCO will have to bear the cost transmission interconnection which has not been budgeted for.
Another worrying aspect of the deal is that the plant requires about 85MM scf/day of fuel which will have to be sourced from Atuabo plant. ACEP analyzed that the gas meant for T1 and T2 plants will be displaced and run on a new 250 MWAPR plant which is estimated to cost US$20-25 million. The implication is that the gas arrangement is that crude oil will have to be procured to run the TI and T2 at a monthly cost of US$25-30 million ?making it very difficult to run given the history of VRA?s financial challenges? he added.
Proposals
From the above, ACEP calls on government to come clean on all the terms associated with the power barges and justification for value for money in all of these. Dr Amin contends that if Ghana can secure funding for all of these then ?Government can equally get funding to complete kpone Themal (220MW), TICO Expansion (110MW) and further secure fuel for them as well as TT1PP (120MW) and CENIT (100MW) cumulatively should give Ghana about 150 MW of emergency power and not the un-transparent 700 MW power being contracted by the Government at a questionable huge cost to the tax payer.

Source: Seibik Bugri

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