The Africa Centre for Energy Policy (ACEP), an energy policy think tank, believes the time is right for government to consider a public-private partnership arrangement for the management of the Tema Oil Refinery (TOR).
“We encourage government to reconsider the proposal for private sector participation in TOR, but this should be subject to public debate,” ACEP recommended in a memorandum to the Appointment Committee of Parliament recently.
“In the meantime, Government must commit to publishing the status of TOR’s operations and the level of its indebtedness to inform the debate that will be generated from this proposal. In addition to this, TOR’s operational inefficiency is very high and must be addressed as soon as possible,” ACEP further suggested.
ACEP’s memo, which was dated January 29 2012, was signed by Mohammed Amin Adam, the think tank’s Executive Director, and copied Mr Emmanuel Armah-Kofi Buah, Minister for Energy and Petroleum.
Four other officials of ACEP, namely John Peter Amewu – Director of Policy and Research, Benjamin Boakye – Director of Projects, Abanga Abdulai – Director of Finance, and Rex Fafa Dodgoe – Director of Investments/Renewable, also signed the document.
According to the officials, ACEP had raised the memo to Parliament as its “contribution to enriching the work of Parliament, which justifiably deserves the technical support of policy and advocacy think tanks such as ours.”
They said that “The paper is also to guide members of the Appointment Committee on important policy questions bordering on the energy sector and to find out which of the policy options the Energy Minister considers appropriate for addressing the problems of the country’s energy sector.”
ACEP identified that there were five major challenges facing the energy sector which the new minister would need to give serious consideration to. It named the challenges as: Restoring reliable power supply through generation, system expansion and efficiency; Restoring the financial viability of energy sector Utility Companies; Managing Downstream Petroleum Issues; Restructuring of the oil and gas industry; and Deepening petroleum governance.
Managing Downstream Petroleum Issues
On “Managing Downstream Petroleum Issues,” ACEP raised concerns about the state of affairs at TOR. It observed that TOR had come under serious discussions over the years.
“The discussions have however not been well informed as a result of lack of transparency in its financial management.”
It added: “Whilst we encourage the Government to consider alternative financing options for recapitalizing TOR, we think that the current option of borrowing to pay TOR’s debt is not sustainable.”
It was also the thinking of ACEP that efforts at addressing the problems of TOR must include the expansion of facilities to help address the frequent shortage of Liquefied Petroleum Gas (LPG). “Another important issue in the downstream sector is the frequent shortage of LPG,” ACEP pointed out, taking cognisance of Government’s policy objective of achieving 50 per cent access to LPG by 2015.
But it said: “This is unrealistic under the current challenges” because “The LPG promotion programme has increased demand without adjustment in supply.”
Nevertheless, “continuous progress can be achieved if the planned expansion programme of LPG facilities at TOR is implemented without delay.”
Source: Economic Tribune/Ghana
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