Business News Wed, 3 May 2017

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Clarify changes to ECG privatization compact – John Jinapor

National Democratic Congress Member of Parliament for Yapei Kusawgu, John Jinapor, wants what he calls ambiguity surrounding the Electricity Company of Ghana’s (ECG) privatization compact clarified, following the President’s announcement of amendments to the deal.

According to the MP, who was also a Deputy Power Minister in the Mahama government, Nana Addo’s announcement of amendment to the Private Sector Participation (PSP) compact of the Electricity Company of Ghana (ECG) with the Millennium Challenge Corporation (MCC), has left room for speculation about the deal.

“The first question is, has this agreement been effected or is it just a proposal? I have heard some government spokespersons indicate that it is a proposal. Others have indicated that it is changed in the agreement,” he noted on Eyewitness News.

Mr. Jinapor thus said he has written to the MCC and Millennium Development Authority (MiDA), “to seek confirmation of a change in this agreement.”

Minority stake for concessionaire would not work

The MP noted that, under the Mahama administration, during the negotiations with MCC and MiDA, they considered offering a minority stake, but indications were that” the market was not going to be responsive if we insisted that the concessionaire should own a minority stake because the concessionaire was supposed to inject a minimum of $250 million and also run ECG effectively and efficiently.”

“What they indicated based on the findings and the research we conducted was that, if you say that the concessionaire should own a minority stake, it [the deal] would not work,” he added.

In view of this, Mr. Jinapor said, “first of all, we need clarification from MiDA and we need confirmation from the MCC whether indeed there has been an agreement to change the initial agreement, such that the concessionaire will own only 49 percent, which will be a minority stake, and if that is so, what has informed that change in position?”

“I think that within the shortest possible time and with a sense of urgency, the MCC and MiDA must come clean on this subject matter because it is a national issue. If they have reviewed the agreement, if they have changed it, they should let us know.”

What Nana Addo said about the agreement

Under the agreement, which is known as the Power Compact II, the government is expected to allow about 80 percent private sector control in the ECG for the country to benefit from a cash injection of about $1 billion over a period of 5 years.

But speaking to Ghanaian workers at the May Day parade in Accra, President Akufo-Addo maintained that, government was targeting more than the 20 percent control agreed by the Mahama government.

“Government has amended the terms of the concession agreement to require that one; Ghanaians own at least 51 percent of the concession. Two, there should be no involuntary layoffs as a result of the concession,” he stressed adding that, “the term of the concession will be reduced from 25 years to 20 years”

Source: citifmonline.com

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