Former Chief Executive Officer of the Volta River Authority (VRA), Charles Wereko-Brobbey has questioned government’s seeming rush to secure another concessionaire for the Electricity Company of Ghana (ECG), weeks after the termination of the concession agreement with the Power Distribution Service (PDS), ABC News can confirm.
The government of Ghana on Monday, October 21, canceled its concession agreement with the private investor, PDS, despite opposition by the United States government, on the basis that PDS failed to meet some key conditions under the contract.
This in effect, led to the withdrawal of the second tranche of $190million earmarked for several projects aimed at the improvement in Ghana’s energy sector under the Millennium Challenge Compact.
The Information Minister, Oppong Nkrumah, in a press briefing last week, indicated that the Finance Minister, Ken Ofori-Atta will soon announce the way forward for private sector participation in the distribution of power in the country.
However, in an interview with Starr FM, the energy expert said there is no need for government to rush in securing another power distribution deal.
“One of the problems we had with the PDS thing was that we hastened too quickly and having been able to take ourselves off this rather unfortunate thing, we must not hasten again. I do not see the need for this rush by the minister of finance to announce the government’s way forward so soon without as having proper time to reflect on what has happened and what are the problems and what are the options for us going forward” he stated.
In order not to make vain the cancellation of the concession agreement with PDS, the Former GRA boss in the interview monitored by ABC News, opined that Government needs to do a quick reflection on what went wrong in the previous deal in order to be better informed and ready for the next.
“The little I hear suggests that despite the fact that the government has terminated the compact and its proposed models for a solution, there’s an intention essentially to repeat the concession arrangement under GoG management. I think that is unfortunate and we need to sit down and reflect on what we have done wrong and how we should proceed and do so reasonably quickly but without assuming that there’s only one solution that can cure ECG’s ills and we should just press on irrespective. If you do it that way then I think the reasons for cancellation of the compact become a little hollow” he said.
He advised that government places the Electricity Company of Ghana on the Ghana Stock Exchange to take the power distribution company out of their direct control and subsequently ensure transparency and efficiency in the country’s power management.
“Placement on the Ghana stock exchange will address the issues of removing the grabby hands of government from ECG. More importantly, it will dilute government control and so it cannot make all the decisions. It becomes like a silent investor. The other option is to leave ECG as it is and revert to a consortium,” he added.
Meanwhile, the Africa Center for Energy Policy (ACEP) is recommending that government initiates a new concession process outside the MiDA framework.
In a position paper released Wednesday, October 30, ACEP stated, “With or without MCC, government of Ghana must commit to fixing the distribution segment of the power sector. The Key problem that brought ECG to its current state is excessive political influence and poor management. It is the same political influence that initiated the failure of the PSP, therefore, a way to fix it is to ensure that a transparent process is instituted to attract investments immediately”
ACEP recommends that Government initiates a “new concession process outside the MiDA framework and assemble two-tear pension fund managers and life-insurance funds to take a majority stake in the concession”