Business News of Saturday, 7 October 2017
Senior Staff Association of the Volta River Authority says the Energy Minister Boakye Agyarko’s response to their stance on the sales of the thermal assets of the Authority is mind boggling.
The Senior Staff Association of the VRA at a rare press conference expressed worry about at an advert placed in the dailies calling for bids from persons interested in acquiring the thermal plants of the state owned power generator.
The sale of the thermal assets of the VRA according to government is part of a proposed restructuring of the company to make it much more profitable and focused.
The move government believes will deal with the high debt situation the VRA finds itself in.
Staff of the state owned power generator is however surprised at the move because of the failure of government to come out with a restructuring plan.
They are particularly shocked that government’s whole restructuring plan starts and ends with the sale of the thermal plants.
Despite persistent arguments justifying the need for VRA to be restructured, the Boakye Agyarko-led Energy Ministry is yet to come out with a plan that will achieve that aim.
The Finance Ministry nevertheless seems to be jumping ahead of that plan by advertising the sale of the thermal plants.
The Akuse Branch Chairman of the Senior Staff Association of the VRA, Francis Deku, said the development is worrying because it is the perpetuation of the government interference that has resulted in the mammoth VRA debt.
“Successive interference of various governments in the activities and operations of VRA that has brought VRA to its knees,” he said.
He said the huge chunk of the debts is the result of obligations imposed on the VRA through contracts signed with Independent Power Producers (IPP).
“About 70 percent of our debt happens to be fuel that we procure for IPPs and we procure this fuel and one expected that they are supposed to pay us but the money does not come,” the Akuse Branch Chairman said.
Francis Deku said the failure of the IPP to pay for the fuel procured with dollars has left the authority with a growing debt.
“Once you don’t get the money what it means is that you will go looking for loan, you use the loan to procure this same fuel, you give it to them, they run and still the money doesn’t come; depreciation is also affecting the authority, you look at the fuel component it also affecting us,” he lamented.
Another major cost of the debt situation is the tariff imposed on power generated from the VRA thermal plants which is a far cry from the ones generated by IPPs.
Currently power generated from VRA’s hydro plants has a weighted tariff of 8.8 pesewas or 2 cents per kilowatt hour as against the approved tariff of 39.26 pesewas or 9 cent per kilowatt hour for power generated from the Bui Dam.
The VRA thermal plants also have a weighted tariff of 41.28 pesewas or 9.4 cent per kilowatt hour as against a weighted of 54 cents per kilowatt hour for the Independent Power Producers (IPP).
The VRA thermal plants due to the low tariffs imposed on them by the PURC make a loss of 4.6 cents per kilowatt hour because they generate power for 14 cents per kilo watt hour.
From the foregoing, it is rather fairness that the VRA needs and not the purported restructuring being proposed by the Boakye Agyarko-led Energy Ministry.
Francis Deku told Gold News they were expecting government to consult them before putting together any restructuring plan.
“We expected that when it comes to formulation of such policies, people with deep understanding of the VRA should have been consulted to do this thing with a mutual understanding to ensure a win-win situation,” he said.
He said they had to write to the President to plead for engagement before two deputy ministers were sent to them.
Mr. Boakye Agyako has also maintained his outfit will not haggle with the VRA staff over the sales in any engagement.
Francis Deku however says the Minister’s stance is contrary to the agreement they had with his deputy for further stakeholder consultation on how the VRA situation should be managed.
“It’s as if the authority is sort of being micromanaged through the media and that is sort of a problem,” he said.