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Minority Spokesperson on Finance in Parliament, Dr. Anthony Akoto Osei, has suggested that government may no longer have a say in the privatisation of the Electricity Company of Ghana (ECG).
According to him, government’s seeming rush to privatise ECG under a 25-year concessionary agreement is to fulfill the conditions under the Ghana Power Compact II of the Millennium Challenge Account (MCA).
Per the Compact II of the MCA signed by the government in August 2014, the ECG is set to be released to a private company for about 25 years.
Among other things, the move seeks to ensure reliable power supply for domestic and industrial use, improved transparency and independence in the setting of regulated tariffs by the Public Utilities Regulatory Commission (PURC).
However, many people, including workers of the ECG, have viewed the move as an attempt to privatize the country’s main power distributor and have subsequently kicked against it.
‘I think that our hands are tied’
Dr. Akoto noted that this this type of privatization may not be in Ghana’s best interest, but conceded that government did not have an option because it has already signed onto the compact. Speaking to Citi News, the MP for Old Tafo in the Ashanti Region explained that “It is a condition precedent so even if government didn’t like it, to be able to receive the MCA money, they have to do that.”
Dr. Akoto remained skeptical about the new concession because in his view, past concessions the ECG had been under, had been nothing to write home about.
“There has been a history of ECG being under concession and that history has not gone well so I don’t know what new evidence has come up to suggest that this new concession will be better than what existed before.”
Concession will not solve ECG’s problems
The MP also intimated that, he needed to be convinced by this new concession for ECG, and argued further that “privatizing the management of ECG under a concession is not the solution to the problems of the country’s major power distributor.”
He said that “there are a lot of problems starting with government owning ECG… we should not think that mere 25 year concession will immediately solve the problem. If there is an issue of proper capital infrastructure, let’s look at it. Let’s look at the totality of the ECG problem.” The most important problem facing the ECG remains their indebtedness in Dr. Akoto’s view. “I am afraid that the current indebtedness of ECG is perhaps more important than anything else and let’s try and do that before we go to concession,” he stated.
President John Mahama had previously insisted that government had no plans of privatizing the state owned company, but he appeared to make U-turn when he defended government’s attempt to privatize the company at the opening ceremony of the 2016 edition of the African ICT and Mobile expo, MOBEX.
The President explained that the move is necessary to make the company more efficient and defending his claim with examples, he explained that government had to similarly deregulate the state owned Ghana Telecom [now Vodafone Ghana] years ago because it was not working.
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