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Experts not happy with the ECG concession deal

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Adnan Adams Mohammed
Some energy sector experts are of the view that, Ghana negotiated a bad deal under the Ghana Power Compact that led to the selection of a concessionaire for the management of the Electricity Company of Ghana (ECG).

Meralco Consortium, a Philippines based power company, has been selected by the Millennium Development Authority (MiDA) to manage ECG.

Though government is yet to approve the deal, one of the bidders, BXC Consortium, is in court to halt the final bidding process, contesting a conflict of interest issue raised against it by MIDA.

But the former Minister for Power, Dr. Kwabena Donkor, has said Ghana has been bullied by the Millennium Development Authority (MiDA).

“We have negotiated poorly. We have allowed the Millennium Development Corporation to bully the Government of Ghana and there have been times where even as a Minister, the Millennium Development Corporation will not listen to you, supported by its Ghanaian appendage of MIDA because they claimed they report to the office of the President.”

President Nana Akuffo Addo in 2017 announced that Ghana had renegotiated the deal to control 51 percent of the Power Compact II with the Millennium Challenge Corporation (MCC).

Again, Dr. Donkor disclosed that disbursement of the $500million ECG privatization package under the Power Compact II agreement has already begun.

This is before the Millennium Development Authority (MiDA) finalizes the paper work related to the implementation of the Compact II agreement with Meralco Consortium.

MiDA last month selected Meralco Consortium which is led by the Manila Electricity Company (Meralco) to manage ECG after determining it to “have the highest combined technical and financial score.”

The announcement followed the disqualification of BXC Consortium.

Per the compact, the Millennium Challenge Corporation is expected to inject about US$418 million into ECG, while Meralco will invest about US$500 million.

“A little bit of the compact money has been disbursed already in financially engineering the processes,” revealed the former Power Minister Dr. Kwabena Donkor  in a recent media interview.

He went on to state that he is not in support of the compact “so structured” even as a Minister.

“I have never believed in a single concession,” he posited, adding “under the power sector restructuring programme that we initiated as far back as 1995 ECG was to be broken up into  special business units/operating companies so that they can do some internal competition [where] best practices can be learnt, [but] unfortunately we have a single concession.”

Under the Power Compact, six projects will be implemented to address the root causes of the unavailability and unreliability of power in Ghana.

The project include ECG Financial and Operational Turnaround Project, 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.

Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.

The Ghana Power Compact would provide Ghana with a grant sum of four hundred and ninety-eight million, two hundred thousand United States Dollars (US$498,200,000) to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.

About US$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.

The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA).

In a related development, President Nana Addo Dankwa Akufo-Addo has stated that no worker of the Electricity Company of Ghana will be sacked due to the ECG concession agreement.

Addressing workers at the Baba Yara Sports Stadium in Kumasi in the Ashanti region last week, the president who was commenting on the ECG concession agreement for the first time since a bidder was selected assured workers of ECG that none of them will be negatively affected.

“No worker of the ECG will be negatively affected or laid off due to the ECG concession,” the president said.

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