ACEP: Barge deal poor

The Executive Director of energy think tank Africa Center for Energy Policy (ACEP), Dr Mohammed Amin Adam the government of Ghana should have analysed the risk of non-performance before signing a contract with a Turkish company for a Karpower barge.

According to him, "the remedies in the contract are not sufficient by my standards".

The energy expert said Ghana is at a disadvantage, per the terms of the contract, in the eventuality that the Karpower barge fails to meet expectations.

"If Karpower delays in supplying power, the penalty they have to pay is $135,000 a day. If there is a drop in power supply by 1%, they pay $36,000 per day. Compared with Lebanon, where it failed to work, the penalty they paid for delay in supply was $270,000 per day and for a drop in supply by 1%, they paid $50,000," Dr Amin Adam revealed.

To him, "if Ghana understood that the risk of default is high because of the track-record of Karadeniz, we should have asked for more liquidated damages in the event that they don’t perform. When you look at the contract, it anticipates that the barge may work or not. If it doesn’t work, what will be the cost to Ghana? The cost to Ghana is so high," he told Kojo Yankson on Joy FM’s Super Morning Show on Monday, November 30, 2015.

The emergency Karpower barge is expected to deliver 225MW of power to ease the load shedding regime that has crippled some businesses for the past three years.

But Power Minister, Dr. Kwabena Donkor, stated at the inaugural ceremony of the barge's docking at the Tema Harbour that "the arrival of this barge will not solve all our problems".

At the ceremony, which was held on Sunday, November 29, the Minister entreated Ghanaians not to be over-expectant that the power barge will end the protracted load shedding overnight, as it is only one part of the many interventions toward ending the energy crisis that has persisted for three years.

"It will make a contribution. As we speak the 250MW power project at Aboadze is also proceeding, and, indeed, that is even bigger than the Karpower ship… the KTPP Plant 220 MW is also at completion stage and TICO 120MW steam expansion has been completed," he said.