Hubtel, a leading Ghanaian IT solution provider that developed a PowerApp for the Electricity Company for revenue collection, has denied a claim by the African Centre for Energy Policy (ACEP) that it reported being paid US$12 million (Gh¢151 million) out of the total cost of US$25 million (Gh¢315 million) for developing the PowerApp.
According to Hubtel, the $25 million was the amount the ECG Board of Directors set out as the cost limit at the start of the project and not money that would be paid to them.
In a statement, Hubtel explained that with their guidance and other third-party service providers, ECG spent only about $12 million (GHS171 million) out of the $25 million.
“Hubtel has NOT been paid $25 million,” the company said.
“Hubtel has NOT quoted anywhere that we have received $25 million from ECG.”
It noted that the $12 million was spent on replacing old and obsolete systems that were causing severe revenue losses and frequent downtimes, and not just on the power app.
“These included the upgrading of ECG’s core databases from Oracle 10G to Oracle 19C, a new balance management and accounting system, hybridization of metering infrastructure, an overhaul of staff systems for commercial operations, an overhaul of customer self-service systems, an overhaul of revenue protection systems and others.
”The new ECG PowerApp is only one of the cost lines within these expenditure,” the statement said.
Again there were allegations that Hubtel gets three per cent of every electricity unit purchased by customers of ECG.
However, the company categorically debunked that allegation, saying, “Hubtel does NOT get 3% of electricity bought by ECG customers.”
It explained that for all merchants and retailers using Hubtel’s platform, the company charges a fee of 1.95 per cent on all transactions processed through their payment platform, and further explained that “one per cent of this 1.95% (more than 50%) is typically retained by the mobile money and card scheme providers, and Hubtel receives 0.95% as our fees.
”This is no different in ECG’s case. Hubtel’s fee is 0.95% and not 3%.”
The company further explained that other fees which are not part of its fees include fees retained by upstream payment providers such as mobile money providers, Visa and MasterCard, provision for metering cloud infrastructure, bank transfer charges and next-day settlement fees to meet ECG’s demand to receive all collections within one day of processing regardless of the settlement period by the upstream payment scheme provider, all of which have nothing to do with Hubtel.
Hubtel also flatly debunked the allegation that its contract with ECG is for 30 years, saying the contract is only for five years.
The critics of the Hubtel contract also claimed that Hubtel’s involvement has not yielded any revenue improvements for ECG, but the company laid out figures to debunk that allegation.
According to Hubtel, as of the time of putting out this statement, a monthly average revenue growth of over 210 per cent (compared to the revenues of August 2022) has been achieved as a result of the work being done by Hubtel and the new commercial system providers.
This, it said, is the longest-sustained record of monthly revenue growth in ECG’s collection history.
”Even factored for the recent average increase in tariff of about 80%, there is still a significant net monthly revenue growth of about 72%; which is a record growth since the year 2001.
”This significant jump in monthly revenues has enabled the ECG to become self-sufficient to meeting its obligations to key suppliers in the short-term,” it said.
Hubtel also pointed out that “for the avoidance of doubt, the new commercial systems designed, developed, and implemented by Hubtel and other service providers have only been involved in ECG’s operations since March 2023. Therefore, attempts by some CSOs and media commentators to link our work to ECG’s past financial performance and legacy matters are completely misleading.”
On the claim that ECG could have purchased APIs from Hubtel to cut cost, the company said that suggestion is tantamount to saying that each company has to purchase mobile money APIs off telcos just to save cost, but things don’t work like that in the payment service industry both in Ghana and around the globe.
Hutbel again debunked allegations that it is owned by some politicians, saying, “At no point since the founding of Hubtel have any of the company’s shares been held or owned, directly or indirectly, by an official of any government institution or any person affiliated with any political party in Ghana.
”Also, at no point since the founding of the company has it had any contract with the Government of Ghana.”
Hubtel said they are very proud of the work they have done at ECG and for the people of Ghana, adding that it remains a company deeply rooted in the ideals of good governance, transparency and an unyielding determination to contribute to the development of the digital economy in Ghana.
“We wish to assure the general public that our service at ECG has been guided by these principles at all times,” it said.
Source: https://energynewsafrica.com
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