ECG, Sunon Asogli Haggle Over Unpaid Bill

The heat generated by the power outages being experienced nation-wide promises to get hotter as two bodies in the power sector, the Electricity Company of Ghana (ECG) and Sunon Asogli, a private power producer, battle over a disputed $9 million debt that Sunon Asogli claims ECG owes it. While Sunon Asogli, which provides 14 per cent of the entire power supply of ECG, claims it is owed $9 million, the ECG insists it is indebted to Sunon Asogli to the tune of $5.5 million. In an interview with Graphic Online, the Director of Sunon Asogli, Togbe Afede XIV, said “payment delays are creating serious cash-flow problems and jeopardising expansion plans to add 360 megawatts and a further 1,000 megawatts of power”. Although the Managing Director of the ECG, Mr William Hutton-Mensah, admitted the ECG owed Sunon Asogli, he disputed the $9 million figure, explaining that “after the reconciliation of figures, we now owe Sunon Asogli $5.5 million”. Reacting to the ECG’s $5.5 million figure, Togbe Afede, who is also the President of the Volta Regional House of Chiefs, simply stated, “We have also reconciled our figures and they owe us $9 million. I will consult with my partners on the next line of action to be taken.” Sunon Asogli’s plant produces 200 megawatts of power but is currently not operating because of a break in the supply of gas to its plant by the damage to the West African Gas Company’s (WAGPCO) pipeline in August 2012. What is disturbing in the emerging controversy between the two companies is that consumers of electricity will suffer if the misunderstanding is not resolved immediately. Sunon Asogli’s inability to operate, the destruction of the ECG’s Achimota sub-station and other factors have resulted in the current load-shedding exercise. Highlighting the difficulties faced by Sunon Asogli as a result of the debt owed it by the ECG, Togbe Afede said, “The worst part is, aside from maintaining the plant and taking care of labour, our situation is worsened by the fact that since we stopped production last year, the ECG has not finished paying for what we produced.” Explaining Asogli’s relationship with the ECG, he said in January 2011, it began producing electricity for sale to the ECG under a power purchase agreement (PPA) the company had earlier signed with the ECG in 2008. He stated that in August 2012, the pipeline that transported gas from Nigeria to Ghana was damaged, thereby “greatly affecting the operations of Sunon Asogli. The situation is tough”. According to him, Sunon Asogli was expected to pay for gas ahead of time and it was, therefore, unfortunate that the ECG was not taking expeditious steps to pay its debt. “Sunon Asogli is the most efficient and reliable power supplier in the country with a plant capacity of 200 MW. It, therefore, deserves to be supported if the government desires private investors to help meet its target of 5,000 MW by 2015, instead of the current frustration we are enduring,” Togbe Afede said. The issue, he pointed out, was “if gas were to be supplied today, Sunon Asogli will not be able to pay”, adding, “If we were in production, we would not be experiencing the power problems we are currently facing today.” Another unfortunate situation, he explained, was that his relationship with the investors had been strained because “they think I am not doing much to claim their money for them”. Responding to Togbe Afede’s sentiments, the ECG boss explained that the ECG would continue to honour its debt obligation by paying GH˘500,000 weekly. “The last time we made payment was last week. We will pay GH˘500,000 this week and pay another instalment next week,” Mr Hutton-Mensah said. According to him, the load-shedding exercise had reduced the ECG’s revenue generation and that had accounted for its inability to meet its debt obligation on time. Throwing more light on the issue, the acting Public Relations Officer of the ECG, Mr William Boateng, said the load-shedding exercise was greatly affecting the ECG’s revenue mobilisation and “so affecting our financial obligation to our creditors”. He said “the commitment is there” and expressed the hope that WAGPCO would resume the supply of gas by the end of March 2013 for the situation to be normalised. Mr Boateng pleaded with consumers to bear with the ECG in these trying moments.