Karpower: Renegotiated deal led to drop in tariff – Boakye Agyarko

The Energy ministry has said its decision to renegotiate the Karpower deal led to the recent drop in electricity tariff announced by the Public Utilities Regulatory Commission (PURC).

According to the communications consultant to the ministry, Nana Damoah, the initial arrangement the Mahama government did with Karpower was financially inimical to the state.

“I mentioned that we had renegotiated some deals to ensure they are very good and Karpower is not an exception. It’s either we accepted the high tariffs and moved on or we would have to deal with it. We would be able to save $54M annually for the people of this country. I think people should think about this in their own perspective and not in the eyes of the NDC. Think about how this affects the tariff we pay. We believe that this arrangement directly affects the tariff you pay and that is why the tariff has gone down,” he told Francis Abban on the Morning Starr Thursday.

The deal with the independent power producer which was contracted by the erstwhile administration to address the country’s power challenges at the time was originally for 10 years but has been extended by a further 10 years by the government after scathingly criticizing it, arguing that the arrangement was highly priced, and was not value for money.

Starr News sources at Karpower confirm negotiations are ongoing with government in that regard. A final agreement is, however, yet to be signed.

The African Center for Energy Policy (ACEP), recently called on government to renegotiate the deal.

Speaking to Starr News’ Naa Dedei Tetteh, former deputy Power Minister and a member of the Energy committee of Parliament John Jinapor said the sector minister will be made to answer for his decision.

“I’m surprised that this government can make such a U-turn after criticizing the Karpower deal, after lambasting it they have not admitted that we need the Karpower deal but gone ahead to extend it by those number of years,” he said.

He continued, “It is most unfortunate [and] it tells you that they were not sincere, they were not honest and were not engaged in nothing but partisan politics.”

According to him, what the government will be doing with the extension of the Karpower deal would be “mortgaging” the future of the country thus the Minority’s resolve to haul the Energy Minister to parliament to answer questions regarding the deal.