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Business News Mon, 14 Jan 2019

There will be no 60% rise in electricity tariffs - Gyamfi replies Adam Mutawakilu

The Chairman of Mines and Energy Committee in Parliament, Emmanuel Gyamfi has described as “pedestrian” claims by Minority spokesperson on Energy Adams Mutawakilu that electricity tariffs will be increased by 60% when Meralco Consortium takes over Electricity Company of Ghana(ECG) from February 1, 2019.

Speaking on Accra based Oman FM, Emmanuel Gyamfi stated that the law maker's assertion lacks basis.

He wondered why his colleague decided to peddle falsehood by throwing dust into the eyes of Ghanaians when nothing of that sort was going to happen when the new managers takes over ECG.

"When I heard what Mutawakilu said I was shocked because there is no truth in it. So what I want Ghanaians do is to treat his claim with the contempt it deserves," he said.

Adams Mutawakilu, who was speaking on an Accra based FM station claimed that consumers, would be paying about 60% increment in tariffs when the Power Distribution Services (PDS) takes over because ECG’s debt is ballooning towards GH¢ 2 billion and that the new manager would be forced to raise tariffs to survive.

According to him, the energy sector is in crisis because of the ECG’s huge debts which he blames on government’s decision to reduce electricity tariff last year.

”The reduction was political reduction and anytime you have political reduction then liabilities accrue and the liabilities will force you to increase it more than expected,” he said

But Emmanuel Gyamfi disagreed with Adams Mutawakilu's claims.

He noted that although ECG has huge debt sitting in the company's account books, he explained that would not lead to increment in tariffs.

Giving reasons why government decided to sign an agreement with the Millennium Challenge Corporation (MCC) for the Power Compact II, Emmanuel Gyamfi, said ECG for some years has been making Technical and Commercial loses of about 23% and this, he said, affect the finances of the company, hence government decision to engage a private entity to help to address the challenges ECG is encountering.

"As I speak with you the technical and commercial loses is about 23%. So in the agreement we have stated clearly that the new entity must work to reduce the loss from 23% to 16% in 5 years. And let me say that for every 1% reduction we will be making a savings of GHS 50million thereby bringing the total to about GHS 350million savings.This is even going trigger reduction in tariffs.

"So I expected Mutawakilu to commend government and Members of Parliament who have done a good job for Ghanaians than spewing lies," he said.

Under the Power Compact II, six projects would be implemented to address the root causes of unavailability of power in some parts of the country.

The project comprised ECG Financial and Operational Turnaround Project, Northern Electricity Distribution Company (NEDCo) Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project and Access Project.

The rest are Power Generation Sector Improvement Project and Energy Efficiency and Demand Side Management Project, Social and Gender Integration, Environmental and Social Performance and Monitoring and Evaluation and Economics (M&EE).

The Government of Ghana signed the Power Compact II with the Millennium Challenge Account (MCC), an independent United States government agency on August 5, 2014.

Ghana would receive $498 million grant under the Compact to improve the performance of the country’s power sector, unlock the country’s economic potential, create jobs and reduce poverty.

The Compact is being implemented by the Government of Ghana through the Millennium Development Authority.
Source: Michael Creg Afful
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