FIle photo of a power plant
The Public Utility Workers’ Union (PUWU) has called on the government to renegotiate contracts with Independent Power Producers (IPPs), arguing that the current pricing arrangements are a major source of financial inefficiencies and revenue leakages in the energy sector.
According to PUWU, the existing contracts are unfavorable and result in significant financial losses for the country.
On Thursday, May 15, Timothy Nyame, General Secretary of PUWU, expressed his concerns during an appearance on Citi Eyewitness News, and monitored by GhanaWeb.
He pointed out that there is a lack of attention to the cost implications of IPP contracts, which have become a significant source of revenue leakage.
“There are certain things that we are also raising about the pricing of IPPs… has the government taken the pain to renegotiate the IPP contract with them?” Timothy asked.
The union executive also stated that they believe that renegotiating these contracts could help optimise revenues and improve the sustainability of the energy sector.
Timothy noted that while public discussions often focus on utility tariffs and fuel supply, the inflated costs of electricity from IPPs are rarely considered, especially when compared to pricing structures in other African countries.
“These are some of the things that we are mentioning – that the pricing of the IPP is part of the leakages that they have to plug. Nobody is speaking about that. Nobody sees that IPPs should be renegotiated,” he added.
He also spoke about how fluctuations in exchange rates impact power pricing, and called for a shift to contracts denominated in Ghanaian cedis to better reflect local economic conditions.
“Looking at the pricing across, how much some of the IPPs are charging compared with Ghana, also, changing the pricing to Ghana cedi. We are not looking at that,” he added.
PUWU’s demand is on the back of ongoing concerns regarding the financial implications of IPP contracts on Ghana’s economy.
NAD/AE
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