Ghana: Gov’t Still Considering Private Sector Player  In ECG -Ofori-Atta

The Akufo-Addo administration is still committed to introducing private sector participation in the management of Ghana’s electricity distribution and retail company, Electricity Company of Ghana (ECG).

This, is according to the West African country’s Finance Minister, Mr. Ken Ofori-Atta.

Government last month terminated the concession agreement signed between ECG and Power Distribution Services (PDS) after several weeks of controversy, due to what government described as fundament and material breaches in PDS’s obligations in the provision of payment securities.

The decision compelled US government to withdraw an amount of $190 million which was meant to support the Ghana Power Compact II.

However, delivering the 2020 budget statement in Parliament on Wednesday, November 13, 2019, Mr. Ken Ofori-Atta said regardless of the developments in the sector, “Government is fully committed to [ensuring] private sector participation in ECG and is focused on moving forward with urgency to find a suitable replacement for the PDS arrangements.”

“Moreover, we are prepared to review the transaction structure and indeed, recognize the need to improve significantly the management of ECG, by bringing in world-class private sector expertise and attracting adequate private capital,” he added.

He further indicated that a competitive tendering process will be initiated very soon to find a replacement for PDS.

“Against this backdrop, Mr. Speaker, I am pleased to announce that Government intends to initiate an accelerated tender process to select a new private partner for ECG in the coming months. It is indeed Government’s intention to make relevant adjustments to enhance the existing bid documents and tailor the process to optimize the selection from companies having a track record of managing and operating a comparable utility, so as to achieve a fair, transparent and expeditious closure of the transaction”.

The Minister also added that concerning finding a new replacement for PDS, due diligence will be done to ensure that certain mistakes are not repeated.

“Mr. Speaker, we cannot overstate the importance of learning from past mistakes if we are to make sound decisions going forward. However, we have no doubt that a well-executed partnership between ECG and the “right” technical and financial partners, will certainly improve our distribution capabilities and enhance end-user experiences”.

“In this regard, heightened scrutiny will be brought to bear in the design and implementation of the financial and technical evaluation criteria to ensure that interested bidders not only have credibility and extensive experience in operating and managing a comparable electricity utility but also possess the financial wherewithal to make the requisite investments in ECG to achieve significant reductions in technical and commercial losses, as well as drive operational efficiency to deliver sustained service reliability for the benefit of all Ghanaians”

Ofori-Atta also maintained that despite the challenges encountered in the PDS concession agreement, Ghana remains committed to its relationship with the Millennium Challenge Corporation (MCC).

“Indeed, Government fully respects and is committed to the essential principles underlying the relationship between the MCC and the Government of Ghana, as well as the overall bilateral relationship between Ghana and the United States”

“Moreover, Government remains committed to the energy sector reforms, as envisioned under both the MCC Compact and the Energy Sector Recovery Program (ESRP), developed with the support of the World Bank”.

Source:www.energynewsafrica.com