Immediate objectives of SRP have not been met - Report

Accra, July 17, GNA - The Management of the Volta River Authority (VRA) admits that while the technical merits for acquisition of the Strategic Reserve Plant (SRP) are sound and essential for the success of continuous power supply, the implementation of the project has been beset by a number of serious technical, operational and contractual problems.

"The result, we may conclude, is that the immediate objectives of the SRP have not been successfully met," the Auditor-General said in its final report on investigations into allegation of irregularities against the Chief Executive of the VRA, Dr Charles Wereko-Brobby.


The Auditor-General, in the report obtained by GNA on Thursday, said it found that the VRA's decision to undertake the SRP Project was consistent with the policy to maintain the country's power supply, rather than revert to the traditional practice of systematic and sustained load shedding.


"The main objective was to fill the gap between the demand by its consumers and the availability generating capacity by leasing an Emergency Power Plant."


The Auditor-General said in order to address the problem of low inflows into the Volta Lake in 2001, "VRA entered into direct negotiations to procure emergency power".


The period of rental is two years in the first instance with an option to extend to three years.

The report said total financial commitments as at June 30, 2003 wer 20,976,651 dollars, 22,926.18 Euros and 4,581 million cedis. The project has not commenced operation and the factor holding up the commercial operation is the non-availability of fuel that meets the specification of the suppliers.


"The fuel that was to be used seems to have been contaminated in the pipeline of the plant. Samples of treated fuel were taken from different locations on May 23, 2003 and sent to laboratories in Holland for analyses."


The report said the electricity billing system in the Northern part of the country was inefficient and needed modernisation and a contract was awarded on sole sourced basis.


The billing system, which has now been completely replaced by a PC-based billing software developed by a local Ghanaian consultancy, is found to be satisfactory.


The Auditor-General said it found that the VRA's total operating expenses have increased astronomically due to high prices of crude oil, which have increased the cost of thermal generation.

The Auditor-General said: "There was lack of adequate financial control in the use of the Authority's resources including abuse of overtime claims and misuse of official vehicles and mismanagement of fuel."


The report noted that VRA has been making losses since 1997 with the cumulative losses for 1997-2002 being 1,760 billion cedis. The expected loss for 2002 is 1,115 billion cedis while the projection for 2003 would be another loss of 1,952 billion cedis.


"Cumulative losses by December 2003 would, therefore, be as high as 4,828 billion cedis."


The report said during the administration of Dr Wereko-Brobby (2001-2002), revenue increased while losses also increased, but at a slower pace.