The Executive Secretary of the Africa Center for Energy Policy has given a damning verdict of government review agreement of the controversial AMERI deal.
Ben Boakye, whose think tank was vehement in criticizing the original AMERI deal signed in 2015 by the Mahama led administration, told Joy News’ Emefa Apawu the new deal entered into by the Akufo-Addo led government is even worse.
He rubbished claims the new deal will save Ghana a whopping $400 million and advised Parliament to reject it.
His former boss at ACEP, Mohammed Amin Adam who led the AMERI criticism against the NDC is now a Deputy Energy Minister who may have played a role in negotiating this new deal.
Background
The $510 million Ameri deal was signed between the Mahama led government in 2015 at a time when the country was reeling under a heavy power paralysis.
The deal was to shore up Ghana’s power supply and to help solve what became known as the return of “dumsor”- power outages.
However, the deal triggered a well of controversy with civil society groups including IMANI, ACEP raising issues about the cost of the power plant.
According to IMANI, the deal had been inflated by over $150 million and demanded that government abrogate the deal.
Vice President of IMANI Kofi Bentil said the then government officials paid a whopping $150 million to a middleman for little or no job done.
But officials of the Mahama led government were adamant in the face of criticism.
Deputy Power Minister at the time John Jinapor justified the agreement saying, the $510 million was for a period of five years which is not the same as paying for a product on a shelf.
The then opposition New Patriotic Party was not left out of the controversy, accusing the Mahama led the administration of price inflation.
It promised to review the agreement if it won power and shortly after it did, the Akufo-Addo led government quickly set up a 17-member committee led by Philip Addison, a lawyer, to investigate the details of the agreement.
The committee among other issues, advised the government to review the agreement with Ameri company.
The review has been done and a new agreement has been brought to Parliament for approval.
In the new agreement, the government claims the new deal will save the country a whopping amount of $400 million over a 15-year period.
Under this agreement, a new company- Mytilineous International Trading Company will take over the management of the Ameri power plants for 15 years.
The new company has offered to pay Ameri an amount of $52,160,560.00, with the government paying the remaining $39 million to the Dubai based company so they can wash their hands off the deal entirely.
In the agreement, the price at which government will now buy power will be reduced from 14.5919 cents to 11.7125 cents per kWh which will lead to a savings of $405.067 million.
“The drop in tariff of US cents 2.8793 per kWh has resulted in a yearly cost savings of about $27.004 million. The total cost of savings over the 15 year period is $405.067m,” the new agreement said in part.
Opposition
Joseph Opoku Gakpo reported the Minority as saying the new agreement is terrible.
They said the deal will make Ghana pay double the amount for the original contract to AMERI.
Minority Spokesperson on Energy Adams Mutawakilu disputed the claim by government that the new deal will save Ghana $400 million.
He said the new deal will rather make Ghana lose money and the old deal should have been allowed to stay.
“There are a lot of questions for the minister to answer. This agreement will be worse. They say ours is worse. Theirs will be terrible,” he said.
He said the cost will be about twice what AMERI was claiming.
“The old deal was perfect and that is why the Attorney General vindicated us,” he said.
ACEP
However, Ben Boakye agrees with the now Minority in Parliament that the new agreement is worse.
He said a renegotiation of a contract like this should have translated into savings for Ghana but that is not the same with the Mytilineous deal.
“Looking at the contract as it is and what we have seen from Parliament we can conclude that this deal is even worse than the original contract.
“We signed a five-year arrangement with AMERI and we are supposed to pay $510m. That is a five-year cash flow of 102 million every year. Already we have paid $171 million. Under this new agreement, we are committing to pay an extra $39 million which will bring the total settlement to 210. What is being transferred to this new company is the 300 million that we would have paid to AMERI.”
He said this new agreement with Mytilineous is worth in excess of $1 billion adding “it doesn’t really make sense.”
He said the government cannot claim to reduce prices per kwh only to 11 cents to extend the number of years of the agreement.
“AMERI’s contract would have terminated within the next two years after which the country owns it and the tariffs would have been 10.4 cents so if you are giving us 11.7 for 15 years that makes it more expensive,” he said.
“This cannot be savings to the public,” he said.
Source: myjoyonline.com
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In contributing to an article on Ghanaweb about Ghana needing nuclear energy as a solution to it's power crisis, my two cents.With increasing discoveries of hydrocarbon resources on the continent, gas becomes a good alternative as a baseload of generation if we could link up these resources through pipelines amongst the individual countries through trade. Russia has pipelines linking Europe the Nordstream lines 1&2 to supply cheap gas for energy generation. It also has pipelines linking China with plans to link up North Korea with gas for energy generation. So it is not like it cannot be done. Tanzania alone has discovered over 2 trillion cubic feet of gas. Nigeria has got gas. Many countries on the continent have hydrocarbon resources from which we could pipe to other countries to generate energy through trade, so the over 600 million people on the continent without electricity could benefit. Secondly, there's solar. The cost of generation has fallen so much with solar, it's just not possible not to consider solar as a serious component of energy generation. Besides we have sunlight 24/7 and companies that are producing the panels. We just need to incentivize it's utilization by residential, public and corporate sources in meeting our climate change obligations. Should we do plan it well, we could have back channels linking the national grid during overcapacity from these sources, which would all go to reduce tariff costs for industry as well. Nuclear generation is a great baseload for generation. And with newer technology it is getting increasingly safe for use. Indeed, by 2030, most of the advanced countries, the usual suspects Russia, Germany, China, UK, US, etc, etc are looking at tapping and operationalizing the holy grail of nuclear energy-fusion. It is predicted that would be the game changer. We cannot discount any generation source as we need tremendous amount of energy to achieve the goals and objectives of Ghana and by extension the whole of Africa. It's time for the dark continent to light up.
i guess the only persons to be surprised with this will be the people who have neck-sunk themselves into believing that the npp is any different from the ndc.