Home News Be comprehensive, transparent- ACEP Cautions Govt in the sale of ECG

Be comprehensive, transparent- ACEP Cautions Govt in the sale of ECG

Dr. Mohammed Amin, Executive Director, Africa Center for Energy Policy (ACEP)
Dr. Mohammed Amin, Executive Director, Africa Center for Energy Policy (ACEP)
Dr. Mohammed Amin, Executive Director, Africa Center for Energy Policy (ACEP)
Dr. Mohammed Amin, Executive Director, Africa Center for Energy Policy (ACEP)

The Africa Centre for Energy Policy (ACEP) has cautioned Government to be comprehensive, transparent and indicate clear performance benchmarks that will constitute the terms of the contract in order to build public confidence in the reforms as it seeks private sector involvement. While commending government reforms ?as appropriate and timely?, ACEP say ?Government should take the option of a management contract rather than trading the shares of ECG to private companies?.

Government has embarked on proposals for a private sector participation in the Electricity Company of Ghana (ECG) and the Northern Electricity Company (NEDco) following Ghana?s qualification to receive the Second Compact of the United States Millennium Challenge Corporation. These, the Madina based think-thank say ?will enhance the Government?s efforts at injecting efficiency in the operations of the power utilities?.? A statement issued yesterday has stated.

Their position tells government that ?noting our experience with previous private sector management of the Ghana Water Company by Aqua Vitens Rand ltd for example, gives public apprehension about private sector participation in the downstream Power Sector is as a result of recent dubious Public Private Partnership (PPP) arrangements, which have eroded confidence.

?The main challenge facing ECG is financial viability and we expect that apart from the grant from the US, the new management must put ECG in the position to attract long-term financing within 3 years from signing the contract. ECG?s debts are not only due to low tariff and collection rates but are also largely attributed to the large procurements by ECG with short-term financing?. ACEP asserts.

Notwithstanding this bold policy, ACEP is worried that political interference, cronyism, and unnecessary politicization of the debate on the policy are likely to undermine the objective of private sector participation ?and therefore wish to call on Ghanaians to debate the policy dispassionately and without emotions and partisan politics. The national interest of seeing a financially strong and operationally efficient ECG must be the objective. Adding that ? it expect the new management to put the right mechanisms in place to reduce the distribution losses, improve on connection rate, improve on metering; and the general customer service.?

The statement indicated a greatest desire ACEP to see improved quality of service by ECG and NEDco. ?And so as required by regulation, ECG and NEDco must develop and publish new Customer Charters based on which consumers can hold them to account. Consumers demand for quality of service is a legitimate one and must be sustained. Private participation in the utilities therefore puts greater responsibility on PURC which still has responsibility for tariff setting and quality regulation to rise to the challenge. Continuous tariff adjustments without improvement in quality of service will undermine consumer confidence in our utility institutions.

Signed by Director of Programs, Mr. Boakye on behalf of Dr Adam, noting that while tariffs are not to be increased beyond what is permissible under the automatic tariff adjustments regime, ACEP nevertheless believe that PURC will put quality of service above all considerations by holding the new management of the utilities effectively accountable.

ACEP reminds government that private sector participation cannot entirely provide the solution to ECG?s operational challenges due to lack of sustained investments in generation capacity, the need to Privatize ECG must therefore be complemented with tariff reforms set within transparent benchmarks as these will attract Independent Power Producers to increase generation capacity.

ACEP also calls on the Government to undertake an immediate operational and financial audit of ECG and NEDco to guide the benchmarks for the contract.

Source: Seibik Bugri


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