A former CEO of the Volta River Authority (VRA), Dr. Charles Wereko Brobbey has advocated for the listing of the Electricity Company of Ghana (ECG) on the stock market to save it from collapse.
His suggestion follows recent debates over the privatization of ECG to improve efficiency.
Ghana’s power sector has for the past three years being saddled with challenges which has currently plunged the country into a power rationing regime affecting both industries and domestic users of electricity.
Some have argued that consumers pay more to enable ECG operate efficiently yet others believe that the ECG be privatized to enhance efficiency.
The Millennium Development Authority (MiDA) has issued invitations for expressions of interest from local and international companies to identify a qualified private sector partner to invest in and operate the distribution business of ECG through a public-private partnership.
Speaking on the Citi Breakfast Show on a number of issues he identified as facing the country’s power sector, Dr. Wereko Brobbey however added that the management of ECG should be given to a competent team to ensure efficient management.
“The people of Ghana own ECG…Ghanaians can own ECG if they want but if they want efficient services and at the cheapest cost, they should employ competent people to do so, if we want to own it, let’s put our monies into it and buy it as Ghanaians,” he said.
Dr. Wereko Brobbey has also come to the defense of the ECG as it is blamed for the ineffectiveness of the country’s power sector.
He has rather accused successive governments of contributing to the woes of the ECG which he says has resulted in impeding the provision of reliable services to customers.
“If power generators don’t produce power, ECG cannot distribute it, so everybody in Ghana blames ECG but they cannot be blamed because it has to distribute what is produced elsewhere, if ECG is owed 500 million dollars how do you expect it to function properly?” he queried.
Independent Power Producer (IPPs)
Dr. Wereko Brobbey further discounted claims that the problems confronting the ECG are self-inflicted. According to him, the issues have rather being as a result of coercion by successive governments into signing about 30 Power Purchase Agreements (PPAs).
“The ECG has been forced by governments to sign these PPA’s…the decision to get ECG to sign these PPAs is government induced. Most IPPs have always preferred to do business with VRA and not ECG because all over the world, the VRA has always being considered a model company while ECG has been the ‘bad boy’,” he stated.
Commenting on the government’s agreement with the Millennium Challenge Account (MCA) compact, Dr. Brobbey said, “The compact talks about improving ECG’s distribution with no mention of generation…the MDA will not be content with the number of PPAs that it will have to deal with. That is why they have called for the feasibility and desirability of each of the PPAs, the government will have to pay off ECG’s debt before any company can come in to take over, this I think will mean that the ECG also makes prompt payment to suppliers such as VRA.”
Power barge deadline
Government had promised that power barge from Karpower was expected in April it missed the deadline and another promised for September. The latest is that the power barges will be arriving in October. The situation, Dr. Brobbey believes is as a result of the government of Ghana to make payments into an escrow account,
“As soon as the power barge starts to deliver power, ECG is supposed to start paying for the electricity that it has produced; here it is saddled with the 500 million debts that have not been paid by government. In a way this is why we are waiting virtually every day for a new arrival date. Karpower knows what is happening in Ghana and it says I want you to make special arrangements where there is money put in an escrow account that if ECG does not pay I can still get my money. That special arrangement is what we have not been able to do… the day we hear credible reports the power barge has left Turkey, we can stop talking about its arrival date.”
Power barge to end dumsor?
Dr. Wereko Brobbey also cast doubt at the ability of the power barge to stabilize the power situation in the light of present developments. This is contrary to government’s assurance that the arrival of the power barges will stabilize the power sector. Dr. Brobbey’s basis is that the 225 MW generation capacity of the barges falls short of the deficit gap of about 500 MW. In addition is the low water levels at the Akosombo dam and the cut in gas supply from Nigeria gas due to debts.
The former VRA boss further predicted that the power crisis may well extend into January 2016. He however hinted of a temporal improvement in the situation during the Christmas holidays where demands by industries and other large consumers of electricity will decline.
Meanwhile Dr. Brobbey has advised government to focus on fueling the various generation plants since investments in generation capacities only increases the capacity charges to be borne by the state.
“The discussion should be focused on producing gigawatt hours and not Megawatts. If your capacity does not have fuel to run it then that capacity will not produce the energy that we require despite we paying for capacity charges, all that extra capacity will be paid for through capacity charge and all that money could assist in purchasing fuel to produce the energy that we need. Power is energy power is not MW capacity,” he said.
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