Energy Ministry slams NEDCo for failure to ‘access and utliise’ $54m

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The Northern Electricity Distribution Company (NEDCo) has come under attack after what is believed to be the company’s inability to “access and utilise” over $54,000,000 for a project they have been assigned.

“The Ministry therefore wishes…to provide the public, media and key stakeholders in the Energy Sector with the facts of the situation,” a statement reads from Nana Kofi Oppong-Damoah, the head of communications and public affairs at the Ministry.

Oppong-Damoah explained that several meetings between the Energy Ministry and NEDCo management to secure funds for infrastructure projects were unsuccessful.

According to a section under the Government of Ghana’s website, NEDCo used to be responsible for the NEDCo Financial and Operational Turnaround (NFOT) Project, an initiative that was intended to directly support the energy sector to attain steady power supply throughout the country.

But according to the Ministry, nothing has been done.

“It got to the point that government had to intervene to ensure that the funds were secured,” the statement reads.

The Ministry said that when the government intervened, it ensured NEDCo that there would be no job losses nor would there be a replacement of management as a result of the NFOT project. Additionally, the following terms were set:

  1. Management’s contract would be reduced to two years rather than five.
  2. NEDCo would be given the opportunity to participate in the renegotiations of the management’s contract to ensure all parties were satisfied with the outcome.
  3. Any issues NEDCo raised regarding the NFOT project would be taken to a transaction advisor who would work to come to a resolution for all interested parties.

“Despite all the efforts made by Government to secure the Compact Funds for NEDCo, the staff rejected the Management Contract mainly on the grounds that it involved the vesting of corporate-wide operational control in the Management Contract and the other related issues contained in the staff groups’ position on the NFOT Project,” says the Energy Ministry.

The Ministry added that during some meetings between the government officials and NEDCo, some staff wore red arm and headbands and waved placards in what seemed to be in protest of the government’s intervening.

Because of NEDCo’s failure to comply with new regulations, the funds meant for NFOT have now been reallocated to the construction of a Bulk Supply Point (BSP) at Kasoa.

“NEDCo would have to seek new funds either by borrowing or other financial arrangements in order to be able to implement projects intended to have been undertaken with the Compact Funds,” the statement concludes “Also, the failure to utilize the Compact Funds will negatively affect people in NEDCo’s catchment area.”

 

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