The Minority in Parliament has warned consumers to be prepared to pay more for power following the approval of private sector participation in the management of Electricity Company of Ghana (ECG) under a concessionaire agreement.
The Minority is questioning the capacity of the Meralco and its local partners to effectively manage ECG. Former Deputy Power Minister, John Jinapor, said Ghanaians will pay the ultimate price.
He said the bid document announced by the Millennium Development Authority (MiDA) showed that six companies qualified to be considered with “Meralco, the eventual winner being a Tier II company.”
According to him, there were three Tier I companies, two Tier II companies and one Tier III company bidding for the agreement but some changes in the agreement made all the Tier III companies withdraw.
Former Deputy Power Minister, John Jinapor
“Eventually, BXC was disqualified so we were left with only Meralco. So there was no company to compare Meralco with so the idea of competitive issues does not come in at all,” he said on the floor of parliament Tuesday.
He said the country should have considered that and opened the concession bidding again to get the best company to manage the country’s power.
Under the second Millennium Challenge Compact for which Ghana is getting a $482 million grant from the US, Melania Electricity Company (Melarco) is to get a 49 percent stake in the ECG whilst a group of local companies are handed 51 percent.
The Yapei/Kasuwgu legislator said a critical look at the list of local partners and shareholding structure shows TG Energy solutions with the highest shares of about 18% has no company address.
“My worry is that some of these companies have no track record in the Energy sector and cannot tell us what they have done in the sector to support Meralco to manage the concession.
“I am equally worried about the outstanding debt of ECG…the understanding is that the liabilities will be dealt with by ECG but this is problematic because, at the end of the concession, it may have to be transferred to the consumer to pay for it ” he said.
Energy Minister, Boakye Agyarko
But the Energy Minister, Boakye Agyarko in his response told Parliament about how workers at ECG are excited about the current arrangement.
He said through negotiation the parties have agreed to first five years employment as the first option for the workers.
“Finally, we came to the term which stated that there shall not be any involuntary layoffs during the entire period of the 20 years concession.
“On the average the ECG worker is 52-years-old and they are being given a 20-year lifeline to work,” he said.
Instead of the 25-year lease, the prospective owners of ECG, Meralco will now have 20 years within which to own and manage the power distributor, he said.
Mr Agyarko invited the opposition to join hands with the government to ensure that the “weakest link in the power sector value chain is strengthened.”