The African Centre for Energy Policy (ACEP), a civil society group in the Republic of Ghana, is demanding an immediate dismissal of the top management of the power distribution firm, Electricity Company of Ghana (ECG), over alleged mismanagement which, the group says is crippling the entire power sector.
Addressing a press conference a while ago on Thursday, Kotso Yaotse, Policy Lead Petroleum and Conventional Energy at ACEP, accused the ECG management of signing a dubious contract with Hubtel, a digital services provider for their revenue collection.
The ECG management members are Samuel Dubik Mansubir Mahama,(the Managing Director), David Boadi Asamoah, Samuel Tagoe, Eric Ansah Antwi, Yaw Frimpong, Ing. Jackline A. Ofori -Atta, Cynthia Amartey, Ing. George Hommey and Leonard N.L Lamptey Esq.
“The current management of ECG should be relieved of the jobs and immediately be replaced with effective and transparent management that would salvage the company and its attendant fiscal burden on the state,” he demanded.
According to him, the ECG is supposed to be collecting over Gh¢2 billion in revenues, however, it is collecting over Gh¢800 million.
He said despite this abysmal revenue performance, the power distribution company has been failing to properly account for the limited revenue it collects.
Kodzo Yaotse noted that after the ECG refused to comply with a directive by the PURC and President Akufo-Addo to create a single account for the collection of its revenue, it then outsourced the development and maintenance of its payment system to Hubtel.
According to him, the contract the ECG had with Hubtel lacks transparency.
“According to a contract received from the ECG, the total cost for the design and development of the platform is about GH¢171.8 million.
Between November 2022 and December 2023, the cumulative service charge was over GH¢100 million.
In addition, Hubtel will be paid 0.95% of all revenues collected as service charges. At the time of contract execution, GH¢75 million had been paid to Hubtel on the framework cost.
This information in the contract contradicts information Hubtel has communicated on its proceeds from the agreement. On March 28, 2024, eight days after the contract was executed, Hubtel published the cost of developing the payment system at US$25 million (GH¢315 million), of which US$12 million (GH¢151 million) had been paid.
“The contract gives Hubtel control over all revenues collected until such a time it is disbursed to the ECG. The contract also creates a fund designed to receive an undetermined portion of revenues collected before the balance is disbursed to the ECG.
This retention of unspecified amounts from all revenues collected undermines the requirements of the cash waterfall mechanism and efforts under the IMF programme to bring visibility to the ECG’s total revenues,” he said.
Kodzo Yaotse also noted that in many instances, the exchange rate reported by the ECG to the cash waterfall committee was significantly higher than the interbank exchange rate.
“This exchange rate manipulation created a net exchange loss of about GH¢6.5 billion in 2022 (from GH¢609 million in 2021) and about GH¢7 billion in 2023. ACEP, through the RTI process, requested historical exchange rates used by ECG for its transactions. The company has since May 2024 not been able to supply our request.”
He warned that the growing fiscal burden imposed on the economy by the ECG’s poor performance has become a ticking time bomb that can undermine the progress made after the domestic and international debt restructuring to keep Ghana solvent.
“With the level of debt accumulation and the intervention required of the state, it is just a matter of time before Ghana is plunged into another debt crisis,” he noted.
He urged the PURC to assume its regulatory functions over the ECG
Source: https://energynewsafrica.com
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