Who manages your water and electricity makes a lot of difference. However the governance system that directs, supervises and awards costs and benefits matters more.  There is no doubt that the current performance of Ghana Water Company Limited (GWCL) and the Electricity Company of Ghana (ECG) are enough to ignite anger or in certain respects mob justice on the service providers.

However, instant justice actions are often regretted when the real facts are opened up and examined. This is why discussing GWCL and ECG has to first proceed with an examination of the situation as exists before judgments and decisions. The profoundness of group interests in politics which influence social and economic policies makes it essential to be skeptical about mainstream views and therefore a strong reason to sieve through ‘popular’ suggestions because politics everywhere in the world follows its own logic whether rational or not and has the means of mobilizing ‘broad’ support.

Withdrawing state subvention to GWCL and ECG is a measure that will produce short term ease but with a widespread long term difficulty that scarcely addresses the challenges of the organisations.

Current Situation

The GWCL and the ECG are governed by Boards of Directors who are appointed by the President. They in turn following directives of the President to recruit Managing Directors. The organizations find themselves under the weight of “general direction” by their respective sector ministries.  Management of the organizations have the responsibility of managing staff, maintaining infrastructure, producing water in the case of GWCL, distributing the end product to customers as well as billing and collecting tariffs. ECG unlike GWCL is not responsible for production. They distribute what is served them by GRiDCO. However being in the frontline of service provision puts them on the lips of customers and like GWCL face the risk of mob justice before examination of the facts.

Three main factors among others stand out in the operations of the two organizations; maintenance of facilities, staff management and procurement of inputs. Outcomes of these three contribute largely to the success or failure of the two organizations premised on how the three factors are influenced by the respective Boards of Directors of the organizations and how the Boards in turn are influenced by sectional political considerations. Staff management entails all of the processes from advertisement of vacancies through to appraisals for promotions including costs and benefits application for achieved or unachieved targets. Ordinarily these are supposed to be management decisions guided by regulations within the public service however such decisions tend to be fraught with seepage of sectional politics. The situation then affects whether the right men and women are recruited or not to plan, turn on the switch or collect and account for tariffs for effective delivery of services to homes and industries.

Procurement is the major casualty in this picture of seepage of politics. Procurement deals with the question of who receives or not portions of the revenue pie of the two organizations through contracts for goods and services for production. The picture gets murkier if you insert the connectors that link procurement with the question of who wins the competition for political power – winning and sustaining the resource allocative power of state. Much has been written and said elsewhere about the charade of competitive bidding and the cunningness of sole sourcing so that could be left out for now. The question is whether citizens or customers receive value for money from goods and services procured?

Logically, if an organization pays more than necessary for a particular good or service it leaves less funds available for other purposes. Similarly, inferior goods below quoted price will also not stand the test of time which means frequent breakdowns or no service at all. These two pose a challenge to maintenance of infrastructure.

The Problem

It is always important to keep an eye on the problem and provide appropriate remedies. Rational policy analysis does this however politics underpinned by group and sectional interests does not. The problem of the two organizations stated simply is; political interference in the governance and management of the two organizations affects procurement and staff management practices which impacts negatively on facility maintenance and service provision. The absence of increased tax-based support for improvement of infrastructure makes the situation dire.

How do you address such a problem? Disconnect and take out the channels that leak politics into the two organizations. Fix the Boards.

Proposed Remedy by Government

Government’s response as announced in the media to the challenges is to withdraw state subventions to the organisations for them to raise their own funds to foot their wage bill and elements of capital cost. Beautifully, the Finance Ministry framed this as “weaning them off” creating imagery of an overly dependent adult who has to find his own way. The truth is that there is no one to be weaned off in this situation. There is rather a population in need of water, electricity and also protection from market monopolies – monopolies presiding over services under conditions of absence of competition and alternatives for domestic and industrial consumers.

The motivation that likely explains this proposed response could be to subject the two organizations to market conditions and get them to generate market revenues and prepare the organistions for take-over by the private sector. At least it is no longer a secret that this is currently the intention of Government for ECG. Withdrawing subsidies and incentivising the two organisations to charge market prices to pay for staff cost and elements of capital cost will auger well for a few but not all citizens. Some can afford but many will not be able to afford the resulting market prices. It will not auger well for government; as was seen in the recent cholera outbreak the state had to pay full medical cost for the cholera patients. The outbreak was connected to alternative water sources that some individuals including food vendors resorted to, mostly unhygienic, because as it was in some cases their main source of water had been disconnected and could not afford prices of water vendors. Could the PURC intervene to mediate for reasonable prices if this policy were to stay? Yes a strong Public Utility Regulatory Commission (PURC) could intervene – strong in terms of availability of needed financial resources, technical expertise and independence. The current PURC by these three yardsticks hardly measures up. So answer to the question is no.

Way forward

Decisions on issues such as the above with long term implications should not be made based on current desperate pressures and economic challenges.

The problems of the two organizations are many but few will disagree that a major cause is the sectional political influence of governments on the organizations; which is also to an extent the source of the problem. The difficulty is the dominance of political appointees on the Boards of the organisations. Increasing technocratic representation and reducing political representation if not eliminating it entirely will be a starting point in dealing with the problems. Representation from workers’ unions, sector professional organizations, NGOs, businesses and the state on the Boards will help block the political channels and put the contagious sectional political leaks in check. In this case Board appointments will be predictable. Also, the Boards should be fully responsible for recruiting Managing Directors

Government should halt implementation of withdrawal of subventions to the two organisations and allow for a lot more discussions on the issue with the active participation of civil society and businesses.

By: Leonard Shang-Quartey

The writer is a Policy Analyst with the Integrated Social Development Center (ISODEC). He can be contacted through email at leonardshangquartey@yahoo.com