The Millennium Development Authority (MiDA), has insisted that the concession of the Electricity Company of Ghana (ECG) under the Power Compact II, would not lead to a retrenchment exercise, but an overwhelming focus on training the workers to enhance efficiency, quality service delivery, cut waste and energy loses.
According to MiDA, the agreement has a clause that bars the concessionaire from undertaking a retrenchment exercise in the next five years.
The Public Utility Workers Union (PUWU), has kicked against the concession, stating that ECG workers, will be laid off once the process is completed.
But speaking to journalists in Accra on Wednesday, the Chief Executive of MiDA, Engineer Owura Safo, assured that the concession agreement, would rather create more jobs and not result in a retrenchment.
He mentioned in particular private individuals becoming vendors of ECG’s prepaid credits.
“Unlike Ghana Telecom it was determined right from the very beginning that ECG was not over staffed. They didn’t have more people than they needed and the bases of that decision was made that there shall be no retrenchment,” he said.
Mr. Safo, explained that workers of ECG would be protected for five years as long as they observe the work ethics and reforms that will be introduced to make the company efficient.
Reacting to a question on how the concessionaire can succeed with the same human resource that have run down the company, Mr. Safo, maintained that the new managers would inject efficiency and turn around the operations of ECG to make it profitable.
“The concessionaire is coming to reduce inefficiency. In fact if the concessionaire is able to reduce the inefficiencies by half , ECG will be a profitable organization. It will save ECG 150 million dollars. The workers will be the beneficiaries. So there will not be any retrenchment,” he said.
He debunked assertions by PUWU, that tariffs would go up after the concession is completed, stating that the injection of efficiency will rather lead to stable tariff regime.
“There will be improved performance and reduction in the current losses of ECG leading to a progressive lowering of tariffs,” he said, adding that “government will also continue to purse rural electrification under the concession”
He stated that extensive consultation has been undertaken to allay the fears of the workers but some of them have reacted negatively due to misinformation.
The Ghana Power Compact, also referred to as Compact II, entered into force despite a law suit against the Millennium Development Authority (MiDA) over the concession of the ECG.
A press statement released recently by MiDA and copied to Citi Business News explained that by the action, the treaty which was signed on August 5, 2014 between the Republic of Ghana and the United States of America, represented by the Millennium Challenge Corporation (MCC) has become effective and Ghana now has access to the Program’s funds.
Under the Power Compact, six projects will be implemented to address the the root causes of the unavailability and unreliability of power in Ghana
The project includes 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,.
The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
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).
MiDA also described a suit filed a member of the opposition New Patriotic Party’s (NPP) communications team, SaakaSalia sued MiDA, against the Power
Compact II as lacking merit arguing that it is not fit to participate as an adviser, in the concession arrangement for the ECG.
Joined to the suit was the PURC, the Attorney General’s office, and Energy Commission.
Mr. Salia further argued that MiDA breached Ghana’s laws after it authored and circulated a draft tariff methodology. But reacting to how the suit will affect the implementation of the project, the Chief Executive Officer of MiDA, Ing. Owura Sarfo admitted that the authority has been served with the suit, but sees it as incompetent.
“We have been served a copy of the suit. I will not go into the merits of the case because the case is in court. But all I will say is that that suit is incompetent, that suit is of no merit and that suit is totally false,” he said.
According to him, the allegations set in the suit are false, since MiDA has undergone all the necessary requirements and legal procedures needed to bring the Ghana Power Compact II into force.
Mr. Sarfo further stated that lawyers of MiDA have studied the suit and will react appropriately very soon. “At the appropriate time as we go through it we will demonstrate that what I have explained to you is so. MiDA is a reputable company, MiDA is a transparent company, MiDA is guided by rules and regulations and therefore what has been laid out is completely false ,” he stressed.
He was also optimistic the suit will have no effect on the implementation of the project.
The Power Compact II Under the Power Compact, six projects will be implemented to address the root causes of the unavailability and unreliability of power in Ghana The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
The Compact would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars.
Meanwhile, the US Ambassador to Ghana, Robert P. Jackson, has said the 25-year private sector participation in the ECG “can be reviewed,” as he allayed fears by workers of the company that they would lose their jobs.
“The period of the Compact is 25 years but it can be reviewed during that time. It is 25 years because it will take a long time for a company to recoup US$500m it has invested. But there is a review clause in place whereby, if the government is not happy with the concessionaire’s operation, it can be revisited,” he said.
In an interview with the Business & Financial Times newspaper at the launch of the Integrated Resource and Resilience Planning (IRRP) project, which is to develop a master plan for Ghana’s power sector, Mr. Jackson said the Compact contains a review clause which allows government to pull out before the end of the 25 years if it is not satisfied.
Enough education and consultations, he said, have taken place to sensitize all stakeholders to appreciate the advantages the Compact will bring to the economy in the long term, hence, ECG workers have no cause to complain.
“There has been a lot of education about the Compact. Union has been very involved in the development of the Compact and so I am not sure why there is the resistance. I think it is best to explain that. Are the people of Ghana happy with ECG? I think the answer to that question is no. Should 5,000 or 6,000 workers hold the whole country to hostage and hold back its development? That is the question Ghanaians need to be asking,” he said.
“I think the workers are fearful of change. No one likes change and managing change is a real challenge. But I think it is a good deal for Ghana and I think it will put ECG on a firm foundation for future growth.
I am saying that I don’t think that their concerns are well-founded. They have made lots of allegations such as: they will see higher tariffs. But it is not up to the new concessionaire to set tariffs. It is up to the PURC. The utility will still be owned by the government,” he said.
He further dismissed the insistence by other commentators that the concessionaire will be an American private company, saying: “There is no American company among the concessionaires.”