Revealed: ECG made gh¢1m profit but lost gh¢480m in 2010
It has been revealed at the Public Accounts Committee sitting Wednesday that the Electricity Company of Ghana (ECG) made a profit of GHC1m but recorded a whopping loss of 480m in 2010.
PAC, which is a committee of Parliament, has been querying managers of the country’s public institutions to explain financial impropriety recorded in the Auditor-General report for 2010.
According to the report, the ECG made GH¢480m loss because of unaccounted power, power theft, inaccurate meter readings, unpaid debt and commercial losses.
The Managing Director of the power company Mr. William Hutton-Mensah said although the company had made losses, it was taking ‘remarkable’ steps to reduce its losses from 26% in 2010 to 21% – a target set by the Public Utilities and Regulatory Commission (PURC)
The government has also paid 80% of its debt and ECG is also trying to retrieve all debts owed it, the MD explained.
He said the company has reduced its losses from 26% at the time of the 2010 audit to 22% currently. He said the four per cent reduction in about one-and a half year was remarkable.
It was normal, he said, for a utility company to make losses because the process of transferring power from its origin to destination makes allowance for losses. He also explained that a 1% loss is equivalent to 17.4m GH¢ in revenue.
Offering reasons for the losses, he cited an instance in which 100,000 customers who had meters installed in their premises were not billed to capture the units of energy they consumed.
Mr. John-Peter Amewu of the Africa Center for Energy Policy speaking on Joy News said the losses made by the company was because of a lack of competition in the power sector.
He said “currently they are alone, you go to them for meter, you go to them for supply and they are responsible for distribution.”
In his view, there was the need for a management restructuring, if the company is to improve.
The ECG has, in recent times, been demanding a tariff increment of 214%. The ECG has said it wants the Public Utility and Regulatory Commission (PURC) to increase its price per unit from 9.76 pesewas in 2011 to 30.67 pesewas to enhance its efficiency
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