Electrical Dealers Challenge power sector

Modernize to cut down costs

…Electrical Dealers Challenge power sector

…Ask for Reform to Procurement Law

Institutions within the power sector have been challenged to be abreast with modern technology, in order to improve efficiency within their systems of operations to minimize cost to the consumer.

Stating this in an interview with The Business Analyst on Monday, the president of the Ghana Electrical Dealers Association (GEDA) , Mr. Joseph Kwaku Obeng said the rate of technological advancement is such that there was the need for engineers and other experts within the electricity generation and supply chain to upgrade their skills to take advantage of such developments.

“It costs more to run old technology than switching to modern ones and our engineers must upgrade their skills to operate such modern systems, which are also more efficient, in order to reduce cost of operations,” Mr. Obeng argued.

According to him, it is wrong and fraudulent for service providers to demand tariff increases as a condition for improving on efficiency.

He said from the business perspective, it does not make sense because improving on the quality of service in itself helps reduce costs drastically and would go a long way in lessening the burden on consumers.

While acknowledging that some members of their association could be contributing to inputs of inferior quality that add to the costs of operations, Mr. Obeng said key inputs in the power sector, such as cables and transformers and their corresponding parts are sourced from international sources.

He said the prices at which they hear some of these items are purchased are way beyond what they could supply, even from the same sources, but were unfortunately constrained by some provisions of the procurement law.

He therefore added his voice to a recent call by the leadership of the Ghana Union of Traders Associations (GUTA) for a second look to be taken at the Procurement Act, to enable local companies participate meaningfully and benefit from procurement processes in the country.

He said the situation where the power generation companies resorted to sole sourcing or sidelining their members for not meeting requirements of the procurement law, has not been profitable to the institutions concerned and challenged that given the opportunity they could deliver the same quality products at more competitive prices, which would go a long way in reducing the costs of these companies.

The GEDA president called for a halt to the situation where equipment that needed retrofitting or refurbishment were written off by state institutions, as another way of cutting down cost in their operations.

Mr. Obeng further called for vigilance in curbing the incidence of theft of power supply inputs such as cables, transformers etc, because aside of the few arrests that make the news he suspected many more go undetected, and that also adds to the costs that get passed on to the consumer.

He said the threat of high utility tariffs to the survival of industries is real, citing the example of a manufacturer, who is reeling under the weight of double the amount of tariffs he was paying before the last increment granted the utility service providers.

Mr. Obeng said for government to sustain the successes in the economy, such as the low inflation rate, among others, there was the need to take a critical look at the high utility tariffs before they spell the doom of industries as through high cost of production, which renders them uncompetitive.