Government’s decision to engage a private sector to manage the Electricity Company of Ghana has been criticized as an attempt to run away from the company’s real problems.

Deputy General Secretary of the Public Utilities Workers Union Mr. Michael Nyantakyi explained that the real problem of the power distributor is political interference.

If the goal of government is to have an efficient, profitable company, it only has to stop interfering with ECG’s work.

This discipline alone is what is needed to cure the problem and not privatization, Mr. Nyantakyi said.

The PUWU has expressed increasing skepticism about government’s insistence that ECG is not being privatized. The Union’s Deputy General Secretary explained that privatisation is in two forms – giving up ownership or giving up control.

The PUWU says it understands government’s decision to give 25 years control of ECG to a private company as privatisation.

Explaining why this decision is a wrong option, the Deputy General Secretary explained on Joy FM's Super Morning Show Tuesday that  ECG is making losses, not because of bad management, but because government has been interfering with the running of the company.

It does this in two main ways – taking power for the Ministeries and public offices without paying and also resisting ECG's calls for tariff review.

According to him, these two main factors have left ECG on its knees with huge debts. The government owes the Electricity Company of Ghana $500million. The debt forms part of a financials crisis in the energy sector estimated at more than ₵1bn.

PUWU view of the ECG problem is backed by a similar analysis by the Africa Centre for Energy Policy (ACEP) which has also revealed that government's $500m debt to ECG constitutes between 60% to 70% of all ECG’s debts.

The energy think-tank's Executive Director Dr. Amin Adams has said if government pays its debts because ECG will be able to pay off VRA and trigger a pay-off cycle among the power-related companies. “This can make a big change…ECG can do better than it is doing now” he said

The PUWU Deputy General Secretary indicated that If government can pay its debts and agree to review the tariffs, ECG will experience a new lease of life. The company will make profit, he assured.

He said the government has waited for the United States through its Millenium Challenge Authority to compel government to take the bitter pill.

Photo: Ghana signed the second compact of the MCA with America in 2015

Under the MCA set of conditionalities, the government must pay its entire indebtedness to ECG and review the tariffs before a private company can take over. The MCA then plans to give government $500m.

But if government can do these two things without being told to do so by the US, then why would it need to relinquish control of the public company to a private player, the trade unionist wondered.

Explaining the other problem of tariff review, Mr. Nyantakyi said it is unfair for government to discriminate against ECG in favour of Independent Power Producers.

For example, Asogli, an Independent Power Producer sells its power to ECG in dollars according to the Power Purchase Agreement. ECG sells it to consumers in cedis. But because of the weak currency, the ECG makes a loss even before it sells to consumers who also pay back in cedis.

If Asogli is allowed to charge a tariff that protects it from making losses, why should ECG struggle to operate efficiently,? he asked.

Some 42 companies have reportedly submitted bids to manage ECG.

In addition to some 18 local companies, others from the Nigeria, United Kingdom, France, Lebanon,  Philippines, Turkey, United States of America, South Africa, Thailand, Ireland, Canada, United Arab Emirates (UAE), Israel and India are said to have tendered in bids.