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Financial challenges, Akufo-Addo’s interference in energy sector cause of dumsor – Jinapor

Tue, 13 Apr 2021 Source: Class FM

The Ranking Member on the Mines and Energy Committee of Parliament John Abdulai Jinapor has said the current intermittent power outages in the country is due to financial challenges and not because of technical challenges as being claimed by GRIDCo and some government officials.

“This is because the transmission lines and transformers are congested due to underinvestment and lack of regular maintenance resulting from the poor financial health of the energy sector State-Owned Enterprises (SOEs),” Mr Jinapor said in a statement.

According to him, most of the energy sector SOEs have continued to witness worsening financial positions since the assumption of office by President Akufo-Addo despite his administration receiving over GHS12 billion in Energy Sector Levy Act (ESLA) revenues and almost GH¢20 billion in petroleum revenues over the past four years.

The Yapei-Kusawgu MP also stated that the Electricity Company of Ghana which recorded a profit of over GHS500 million under former President John Mahama in 2016 has posted cumulative losses of over GHS4 billion since the 2017 financial year.

He further claims that GRIDCo which also posted profits in 2016 “has equally taken a turn for the worst with total comprehensive loss of over 600 million cedis as captured in their 2018 financial Statement.”

“Due to the worsening financial position of GRIDCo, Agence Française de Développement has had to withhold funding for a major upgrade of the National transmission line culminating in congestion of the GRID,” he added.

Mr Jinapor also alleged that the Energy Commission which is the technical regulator of the sector has seen its budget slashed by more than half on account of the Capping and Realignment Act rendering the commission ineffective.

In his view, the current load shedding (Dumsor) being experienced in the country, therefore, is as a result of “mismanagement and unnecessary political interference by the Akufo-Addo government in the management of the energy sector.”

Mr Jinapor is calling on the government to be honest with Ghanaians instead of denying and misinforming the populace.

“Government must, therefore, come clean on the current power crisis as a matter of urgency and desist from engaging in blame game,” the statement said.

“Shifting blame and providing conflicting information only goes to exacerbate the crisis which is threatening lives and businesses across the country,” it added.

Read Mr Jinapor’s full post below:

GOVERNMENT MUST COME CLEAN ON THE CURRENT “DUMSOR” SITUATION.

The recent power outages popularly known as “Dumsor” appears to be worsening despite several assurances from Government and managers of the power sector.

Since the beginning of 2021, many parts of the country have consistently been plunged into a state of darkness often without prior notice to consumers, unfortunately, the situation keeps worsening by the day.

While most Ghanaians have been witnessing intermittent power outages, others have been experiencing low currents and occasional high voltage leading to damage of their electrical gadgets and assets in some cases.

It should be noted that since the beginning of the year, GRIDCo alone has given six different reasons for the major national outages aside the intermittent localised blackouts.

What is even more disturbing is despite confirmation from GRIDCo that the country will continue to experience these power outages into the foreseeable future for which reason they promised to publish a load management schedule, the schedule has been put on hold due to political pressure from the executive.

It is a well-known fact especially amongst energy sector players that the current outages in the country is due to financial challenges and not because of technical challenges as being claimed by GRIDCo and Government officials.

This is because the transmission lines and transformers are congested due to underinvestment and lack of regular maintenance resulting from the poor financial health of the energy sector SOEs.

Indeed, it will be recalled that in March 2018, the current CEO of GRIDCo cautioned that the Country was likely to experience major power supply challenges (http://www.faapa. info/blog/gridco-losing-revenue-due-to-tariff-reduction-in- electricity), this was after President Akufo-Addo took a populist decision to usurp the authority of the PURC by slashing the revenue flows of GRIDCo and other utility agencies.

Unfortunately, this caution fell on deaf ears. It is therefore not surprising that electricity consumers (Ghanaians) find ourselves in this difficult but avoidable situation.

Most of the Energy sector SOEs have continued to witness worsening financial positions since the assumption of office by President Akufo-Addo despite his administration receiving over 12 billion cedis in ESLA revenues and almost 20 billion in petroleum revenues over the past 4 years.

The ECG which recorded a profit of over 500 million cedis under President Mahama in 2016 has posted cumulative losses of over 4 billion cedis since the 2017 financial year.

The GRIDCo which also posted profits in 2016 has equally taken a turn for the worst with total comprehensive loss of over 600 million cedis as captured in their 2018 financial Statement. Due to the worsening financial position of GRIDCo, Agence Française de Développement has had to withhold funding for a major upgrade of the National transmission line culminating in congestion of the GRID.

As if that is not enough, the Energy Commission which is the technical regulator of the sector has seen its budget slashed by more than half on account of the Capping and Realignment Act rendering the commission ineffective.

According to the 2019 PIAC report, of the US$334,636,806.22 of raw Gas supplied by the Ghana National Petroleum Corporation (GNPC) to Ghana Gas (GNGC), no payment was received, largely on account of VRA’s inability to pay GNGC for the lean gas supplied bringing the total indebtedness of GNGC to GNPC in respect of lean gas supplies to US$668,118,346.04.

From the forgoing it is obvious the current load shedding (Dumsor) being inflicted on Ghanaians is as a result of mismanagement and unnecessary political interference by the Akufo-Addo Government in the management of the Energy sector.

It will be recalled that when the nation was faced with a similar challenge under the NDC, the Mahama Government was candid with Ghanaians and proceeded to implement pragmatic policies to comprehensively address the challenge and subsequently handed over a resilient and robust energy sector to President Akufo-Addo. Note that President Mahama is on record to have also bequeathed over 230 million cedis in the ESLA account to President Akufo-Addo in 2017.

Instead of conceding on their shortcomings and being honest with Ghanaians, this Government has adopted political chicanery, denial and misinformation as a cardinal tool whilst the ordinary Ghanaian is made to bear the brunt of these avoidable power outages.

Government must therefore come clean on the current power crisis as a matter of urgency and desist from engaging in blame game.

Shifting blame and providing conflicting information only goes to exacerbate the crisis which is threatening lives and businesses across the country.

Thank you.

John Abdulai Jinapor(MP)

Ranking Member -Mines and Energy Committee.

Source: Class FM
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