VRA debts cause of energy sector levy

The Volta River Authority (VRA) has not cancelled outstanding debts owed it by some companies since the Authority itself requires resources to pay its accumulated debts.

This is the comment of President John Mahama on recent reports that the VRA had crossed out a $20 million debt owed it by mining company, Golden Star Resources.

The company is reported to have requested that the VRA cancels its remaining debts after paying some of the about $40 million.

The request followed what Golden Star Resources referred to as a huge impact of the falling world market prices of gold on its operations.

But speaking to TV3, the President maintained that the VRA’s high legacy debts rather influenced the introduction of the energy sector levies and therefore could not have been prudent to cancel an outstanding debt owed by a consumer.

“That was a mining company and they started to experience problems when the price of gold dropped and so it meant that they were not earning as much as they could and so their bills with VRA piled up …the VRA hasn’t forgiven anybody its debts,” President Mahama said.

He further explained, “Naturally, VRA itself has a lot of legacy debts the debts of VRA and the power utilities have accumulated over the years and that’s why one of the solutions to the energy crisis was not only putting in enough power generations, “But also to do something about the VRA’s debt hence introducing the energy sector levies to help them pay off those legacy debts, clean their balance sheets so that they are better able to sustain the power that they are generating.”