‘Pay Inter Utility Debts’

Mohammed Amin Adam

Mohammed Amin Adam, Executive Director of the Africa Centre for Energy Policy (ACEP), has called on government to settle all its inter-utility debts through the clearing house system to revive the country’s ailing energy sector.

Speaking recently at a business summit organized by Business Television Africa (BTA) in Accra on how the energy situation in the country was impacting businesses, he said “government must ensure that Asogli pays VRA all its debts. ECG must pay Asogli its debt while government must also settle its debts to ECG. When we are able to clear the inter-utility debts, then we can say we have moved one step forward.

“As for the generation capacity, there are projects in the pipeline. There are others that have been commenced and there are others which are almost at completion and therefore in the medium term, I expect that installed capacity will increase.”

“Gov’t needs about $4 billion to solve the country’s energy problem over a six-year period, a World Bank report has said.

Capitalise VRA

“Some of its plants have broken down and need maintenance but VRA does not have money.

For instance, the T3 Plant is now the bone of contention between VRA workers and government.

“Government should support VRA to bring it back into operation. It would generate another source of revenue, especially because hydro is failing us, and so the VRA is not generating revenue from hydro. They are unable to run either because there is no fuel or they don’t have money.”

Energy bonds

“Some people have advocated that government floats energy bonds, and I support that proposal so we can generate the money they need to meet their capital cost requirement. This industry is a capital intensive and if they cannot even maintain their existing plant, how can they increase their generation?” he disclosed.

Suspicion

Dr Adam stated that there was a conspiracy theory out there that government was deliberately running down VRA in order to bring in private companies that were politically connected to take over the industry.

“I don’t think that is what government is doing. We want to be able to attract private sector to complement what our national utility is doing but to the extent that our national utility is not competitive because of the debt and high levels of inefficiency and because some of the plants have no availability level, eventually the private sector will take over. “

Uncompetitiveness

Nana Osei-Bonsu, CEO of the Private Enterprise Federation (PEF), touching on how high power tariffs affected pricing of goods, mentioned: “In Ghana, the per capita income of the population and businesses is such that businesses cannot pass on every inefficient cost to their consumers. Businesses will simply be priced out of competition because competition is coming from overseas and we just signed onto the EPAs.

“Our markets are going to be flooded with tax free, tariff free products. So if Ghana-made products are going on the level where pricing are based on the increase of inefficiencies, we cannot compete. Those are the issues that we are raising. The pricing should be meaningful on the basis of cost recovery.”

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By Samuel Boadi

 

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