The Africa Centre for Energy Policy (ACEP) has given a green light for the proposed privatization of Electricity Company of Ghana (ECG) and the Northern Electricity Company (NEDco).
According to ACEP, privatization in the two public utility service entities is a bold decision and commended government for it.
Notwithstanding this bold policy, ACEP said it is worried that political interference, cronyism, and unnecessary politicization of the debate on the policy are likely to undermine the objective of the proposed private sector participation in ECG and NEDco.
ACEP said thereformswillenhancetheGovernment’seffortsatinjectingefficiencyintheoperationsofthepowerutilities.
According to the Centre, private sector participation cannot entirely provide the solution to ECG’s operational challenges due to lack of sustained investments in generation capacity.
ACEP, however recommend that Government should take the option of a management contract rather than trading the shares of ECG to private companies.
Therefore, calling for the need to Privatize ECG witha complemented tariff reforms set within transparent benchmarks, this they believe was an important requirement to attract Independent Power Producers to increase generation capacity.
This, according to them, will ensure that Government and Ghanaians appreciate the enormity of the challenge in our power sector utilities and the need for us to prevent the postponement of the proposed reforms.
The statement signed by Benjamin Boakye, the Programs Director of ACEP revealed that the main challenge facing ECG is financial viability and we expect that apart from the grant from the US, the new management must put ECG in the position to attract long term financing within 3years from signing the contract.
ECG’s debts are not only due to low tariff and collection rates but are also largely attributed to the large procurements by ECG with short term financing.
ACEP also expect the new management to put the right mechanisms in place to reduce the distribution losses, improve on connection rate, improve on metering; and the general customer service.
However, our greatest desire is to see improved quality of service by ECG and NEDco, therefore as required by regulation, ECG and NEDco must develop and publish new Customer Charters based on which consumers can hold them to account.
‘Consumers demand for quality of service is a legitimate one and must be sustained Continuous tariff adjustments without improvement in quality of service will undermine consumer confidence in our utility institutions,’ the statement posited.
The statement stated that, ‘we therefore wish to call on Ghanaians to debate the policy dispassionately and without emotions and partisan politics. The national interest of seeing a financially strong andoperationally efficient ECG must be our objective.’
The statement, ACEP added that noting their experience with previous private sector management of the Ghana Water Company by Aqua Vitens Rand ltd, they caution Government to be comprehensive and transparent about the performance benchmarks that will constitute the terms of the contract in order to build public confidence in the policy.
It said the public apprehension about private sector participation in the downstream Power Sector is as a result of recent dubious Public Private Partnership (PPP) arrangements, which have eroded confidence in government partnering the private sector.
Therefore, ACEP calls on Government to undertake an immediate operational and financial audit of ECG and NEDco to guide the benchmarks for the contract.
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