Mrs . Zita Kyei-Gyamfi is the Revenue Protection Manager at ECG, Tema Branch
The Electricity Company of Ghana (ECG) in Tema Region has initiated legal action against nineteen individuals and businesses for engaging in illegalities and enjoying electricity freely.
The Revenue Protection Manager at the Tema ECG, Mrs. Zita Kyei-Gyamfi disclosed this to the press in Tema on Wednesday, 31st January, 2019.
She said the company would not relent on its effort in pursuing bad nuts in the society who engages in illegal connection by dragging them to court.
It would be recalled that ECG last year discovered that about 40 businesses in Tema had connected power illegally and were enjoying electricity freely.
They include Subin Valley Hotel, Step One Drinking Spot, New York Spot all at Community Seven and T-Havana, an events centre and night club at Community Nine.
Mrs. Zita Kyei-Gyamfi explained that the companies had been surcharged adding that some of them had already started paying.
She, however, could not mention the companies and individuals who have been dragged to court by ECG.
Touching on the efforts of the Revenue Protection Units of the company, Mrs Zita Kyei-Gyamfi told the media that ECG was able to recover an amount of GHS GHS2, 242, 940.00 representing 2.247GWh of power which was stolen in 2018 by customers who engaged in wrongdoing.
She said out of the total amount ECG collected GHS 1,794,352.00 with the remaining GHS 448,588 yet to be collected.
Mr Joseph M. Forson, who is the Tema Branch Manager, outlined a number successes his outfit chalked in 2018, with support from the media.
He said his outfit did its best by improving on its networks resulting to reliable electricity supply in the region
He added that they also resourced the staff by building their capacity to ensure efficient delivery of services to customers.
Touching on the takeover of ECG by Power Distribution Services (PDS) led by Meralco, Mr. Forson assured that customers would be seeing efficient and quality delivery of service.
“Going forward into the new company, you will see some difference. We’re poised and we’re prepared to deliver excellent and efficient services to our stakeholders,” he said. ECG sues nineteen individuals and companies for engaging in power theft
Mrs . Zita Kyei-Gyamfi is the Revenue Protection Manager at ECG, Tema Branch
The Electricity Company of Ghana (ECG) in Tema Region has initiated legal action against nineteen individuals and businesses for engaging in illegalities and enjoying electricity freely.
The Revenue Protection Manager at the Tema ECG, Mrs. Zita Kyei-Gyamfi disclosed this to the press in Tema on Wednesday, 31st January, 2019.
She said the company would not relent on its effort in pursuing bad nuts in the society who engages in illegal connection by dragging them to court.
It would be recalled that ECG last year discovered that about 40 businesses in Tema had connected power illegally and were enjoying electricity freely.
They include Subin Valley Hotel, Step One Drinking Spot, New York Spot all at Community Seven and T-Havana, an events centre and night club at Community Nine.
Mrs. Zita Kyei-Gyamfi explained that the companies had been surcharged adding that some of them had already started paying.
She, however, could not mention the companies and individuals who have been dragged to court by ECG.
Touching on the efforts of the Revenue Protection Units of the company, Mrs Zita Kyei-Gyamfi told the media that ECG was able to recover an amount of GHS GHS2, 242, 940.00 representing 2.247GWh of power which was stolen in 2018 by customers who engaged in wrongdoing.
She said out of the total amount ECG collected GHS 1,794,352.00 with the remaining GHS 448,588 yet to be collected.
Mr Joseph M. Forson, who is the Tema Branch Manager, outlined a number successes his outfit chalked in 2018, with support from the media.
He said his outfit did its best by improving on its networks resulting to reliable electricity supply in the region
He added that they also resourced the staff by building their capacity to ensure efficient delivery of services to customers.
Touching on the takeover of ECG by Power Distribution Services (PDS) led by Meralco, Mr. Forson assured that customers would be seeing efficient and quality delivery of service.
“Going forward into the new company, you will see some difference. We’re poised and we’re prepared to deliver excellent and efficient services to our stakeholders,” he said. PURC likely to announce new utility tariffs next week
The Public Utilities Regulatory Commission (PURC) is likely to announce the reviewed utility tariffs next week, instead of Friday, February 1, according to persons close to the Commission.
Why the “postponement”?
JoyBusiness understands the “change-in–date” had got to do with delays in finalizing necessary engagements with all the other stakeholders on the new tariff levels.
PURC had hoped to finish engaging the utility companies by Thursday as well, for the announcement to be made on Friday, February 1 2019.
But sources at the PURC say the new owners of the Electricity Company of Ghana, this week came up with a concern that would make it difficult for the Commission to start applying the new tariffs from Friday, February 1.
JoyBusiness is also learning that the Public Utility Regulatory Commission had already settled on the new utility tariffs, and this postponement has nothing to do with their inability to finalize work on the tariffs.
A misconception of the gas pricing in the ENI operated Sankofa Gye Nyame gas project
There is an article by the News Statesman (newstatesmanonline.com) which seeks to spreading false information about my involvement in the ENI operated Sankofa Gye Nyame (SGN) project and in particular raising issues to do with how the ENI gas price was determined and to do with my integrity in handling the negotiations leading to the successful implementation of this world class ground breaking project;
It is important that this issue of national interest should be addressed purely on the project development economics and should be devoid of the constant partisan positioning
I have not been involved in any gas-price fixing in anyway whatsoever to the advantage of ENI/VITOL, nor did i take decisions on the gas price which would be of benefit to me directly or indirectly;
On the contrary the gas price reached by a negotiation team based purely on the economics of the project and a reasonable market Rate of Return (RoR) to the investor for such risky deep water exploration projects;
It is important to address and set the record straight on issues the Newstatesman’s has intentionally and maliciously misconstrued:
0. The net Gas price that Ghana pays to ENI is less than the landed gate price cost of Nigerian Gas; Ghana currently pays almost $8.8 per mmBTU for Nigerian Gas where as Ghana will be paying on a net basis less than $6 per mmbtu to land the gas at Sanzule;
0. The Gas price for the SGN project is based on cost recovery and an acceptable RoR for such risky Deepwater E&P projects;
0. Gas prices from associated fields like Jubilee and TEN cannot be compared to gas prices of non-associated fields because the economics on the cost recovery of the Jubilee and TEN project is based on the sale of the Oil (and not the Gas) whereas the economics of the SGN project relies on the sale of the Gas since the SGN fields are predominantly non-associated Gas;
0. The Gas price has not been negotiated downwards by anyone; to explain further, this is because the agreement negotiated but GNPC and signed in 2014 provided that all development cost savings from the originally estimated development cost in the Plan of Development (PoD) would be used to reduce the Gas price ; consequently, every $100m savings in project cost would translate to a $0.55/mmBTU savings in gas price.
Background
The PoD signed in December 2014 agreed to a spend of $7.1bn to develop an integrated Oil and Gas project to produce 45,000bbls of oil a day and 180mmscfd of natural gas with declines over a 20-year period
What was agreed was that a final gas price would be recomputed on certain completion milestones of the project and a nominal starting gas price needed to be set to make the project financeable.
Like all projects a rate of return needed to be agreed and based on consultations the rate of about 20% was closed. This was lower than similar deep water exploration & production projects all around the world, which range between 19% and 25% adjusted for risks related to greenfield projects in the region.
Based on the estimated reserves at the time of signing the PoD, the proposed production profile, and the approved PoD costs, and the agreed cost split between Oil and Gas, together with the expected RoR, a nominal price of $9.8/mmBTU was agreed to and signed by Government of Ghana (GoG) and ENI.
GNPC also negotiated that the final gas price would be determined by the final development cost of the project based on the agreed PoD parameters, and that for every $100m savings in capital costs the gas price would be reduced by $0.55/mmSCF.
Initial savings based on the PoD parameters was approximately $700m which, if applied as per the agreement, would have brought a savings of $3.85/mmBTU and thus revising the nominal gas price downwards to arrive at a final gas price of approximately $5.95/mmBTU. It remains a wonder why the current Government did not take advantage of this innovative mechanism to take advantage of the impact of the US$690 million savings negotiated in the Gas Sales Agreement and is rather pointing to a non-existent US$100 million loss.
It is my understanding that the PoD is being altered to incorporate parts of the project that was originally agreed to be carried out and paid for by GNPC had opted to finance outside the scope of the project on the onset of the project; if such works are carried out by ENI this will significantly whittle down any savings previous made on the development cost; If this is so, and Ghana does not benefit from these savings through a reduction in the gas price, then a great disservice has been carried out on the good People of Ghana, contrary to what the Newstatesman article evilly tries to misconstrue;
The works, above, that GNPC had on the onset of the project opted to finance including the WAGP interconnectivity/reverse flow, oil production optimisation and drilling to increase gas reserves and production.
GNPC opted to finance some of these costs because it did not deem it prudent to allow ENI to finance the above key projects at the same RoR as the risky E&P project; GNPC prudently did so because indications from the banking market, supported by term sheets from at least 3 banks, were that GNPC could raise money in the market at less than 7% to finance these projects or at worse at the same cost that GoG raises its Eurobond, at approximately 11% at that time;
The addition of the above projects to the PoD of the SGN project significantly reduced the savings from approx $700m to less than $200m and we are yet to see any significant gas price reduction.
Please note that the current price of $7.89/mmBTU is a poor attempt at securing the savings as a derived price based on the agreed pricing formula on how the final price would be arrived at when the gas price agreement was signed in 2015.
It is also important to note especially when comparing the cost of alternate sources of fuel, like Nigerian Gas, and the proposed LNG project, that the current “final” gas price of $7.89/mmBTU gas price the actual payment by Ghana to ENI for the gas, net of Ghana Govt share, is close to $6.0/mmBTU; This is because Ghana receives 5% Gas Royalties (10% for Oil), and also has a 20% equity share of the field
It is alleged that the ENI gas is most expensive domestic gas and that it is priced higher than the PURC approved delivery pricing of $7.29/mmBTU; this, again, is inaccurate as the PURC price is a weighted average which includes the Sankofa gas price.
Another issue that needs clarification is the erroneous comparison of the TEN or Jubilee Gas prices to that of the ENI gas price; The Jubilee and TEN projects are Oil-with-associated-gas projects which makes the gas supply unreliable unlike the SGN project which is an integrated oil and gas project which is only feasible if the gas is monetised i.e. if the gas is sold at a commercial rate to make the development possible.
The financing of the Jubilee and TEN projects were hinged on an oil price for cost recovery without gas paying for the project because Jubilee and TEN were associated gas projects; as such the price of the gas is based on the marginal cost of producing the gas; in other words if the gas is not sold the project will still be developed;
On the contrary the ENI gas project is a Gas project where the financing of the project is totally dependent on the gas sold at a cost-recovery price;
The World bank believed in this project so much that they gave their largest ever financial support given to any project in the history of the World Bank (WB) in the form of a $700m in guarantees.
The whole reason why all of a sudden this has become an issue is because GoG has not been able to meet some of the conditions precedent that the WB and ENI put up when the agreement was signed; and the GoG need someone to blame — someone in the past government;
The conditions that GoG has not been able to meet include:
0. A Condition Precedent (CP) for the delivery of gas in a take-or-pay agreement was that GoG would funding an escrow account to complete a 12-month Guarantee payment to ENI as part of the security package
The security package included a 500m Letter of Credit supported by the WB Guarantee ; a funded escrow account of up to 4.5 months payment estimated at $205m
The LC was established in 2016 by SCB and HSBC
However the escrow account has not been fully funded as GoG/GNPC has not been able to raise the funding
0. A Second CP not met is the reverse flow of the WAGP pipeline to allow the gas to be pumped from the West (Takoradi) to the East (Tema) of Ghana ; the funding to do this project , approximately $120m was budgeted for by GNPC and approved by Parliament but for some reason neither GNPC, nor Ghana Gas, have not been able to raise the funding themselves and it is believed that GoG has asked ENI to fund the project in an extended scope of their PoD; doing so will reward eni to finance this pipeline project at a ridiculous 20% RoR; projects of this nature are funded at less than a 12% RoR due to its low risk.
0. A third CP not met is that the 4 WB-approved IPPs (which are to benefit from a Govt Support and Consent Agreement guaranteed by the WB) that would evacuate majority of the Gas for generation in their thermal plants had never been built, nor has the infrastructure (pipelines connecting the Ghana Gas pipeline from Atuabo, and GRIDCO connectivity) to support the the KARPOWER 450MW power-ship; the agreement was for this vessel to be brought in and docked in Takoradi to replace the original KARPOWER 225MW power-ship which was docked temporarily at Tema shipping harbour;
0.
The above are therefore the facts surrounding the delivery of the SGN project
The project is delayed!
The Govt is looking for a scape Goat!
Basically the cost reduction has been eroded due to the incompetence of GoG and GNPc to raise the needed funds to meet the CPs or to negotiate for the inclusion on the ancillary projects in the PoD at reasonable RoR.
Also instructive is that the cost reduction came about as a result of reduced capex emanating from the downturn in the oil industry in 2015-206 and service going cheaply.
ECG Takeover: How Did We Get To Concession?
On February 1, 2019, Ghanaians would be witnessing, for the first time, in the history of the country’s power distribution company, the entrance of a private entity called Power Distribution Services (PDS) led by Meralco, a Philippino company, who would take over the operations and management as well as undertake the requisite investments in the electricity distribution business of the Electricity Company of Ghana (ECG).
The Power Distribution Services, which is a consortium of Ghanaian and foreign entities, has 51% Ghanaian stake while the remaining 49% stake would be for Meralco and its partners.
Workers of ECG have been guaranteed job security within this 20-year-period, except in a situation where one involves himself or herself in any shady or criminal deals.
Per the Transaction Agreement for the Private Sector Participation (PSP) in ECG, the state power distribution company would be an asset owner and hold all Power Purchase Agreements (PPAs) that would be used to supply power to the PSP providers.
It is the hope of Ghanaians that the coming on board of the private sector would turn ECG around and bring to an end, the financial and distribution challenges the company has been encountering, which, sometimes, lead to power outages and, thereby, giving discomfort to consumers.
However, the question we should all be asking ourselves is, how did we get to the current situation where it has become necessary that we needed the private sector participation in the management of ECG?
In 1994, the Government of Ghana received recommendations from its Consultant SYNEX (of Santiago, Chile), who it had contracted to study opportunities for reforming Ghana’s Power Sector. SYNEX, among other things, envisaged in its recommendation to Government the introduction of Concession in power distribution.
Presently, ECG has close to about GHc1.7 billion debt sitting in its financial books. These are monies the power distribution company owes power generation companies. It is instructive to note that these debts are the creation of ECG themselves, Ministries, Department and Agencies (MDAs) as well as some members of the public who engage in illegal connections to enjoy free power.
It is against this background that former President John Dramani Mahama, in August 2014 in Washington DC, USA, signed an agreement with US government through Millennium Challenge Corporation (MCC) to support Ghana’s electricity sector with a grant of US$498.2 million to undertake specific programs and projects aimed to address the challenges in the sector.
The decision to implement the power compact was largely influenced by the prevailing power crisis which begun in 2013, and, thereby resulting in thousands of Ghanaians being thrown out of jobs with an estimated $622million loss to the economy per annum.
The Power Compact II which was designed to create a self-sustaining energy sector in Ghana by reforming laws and regulations needed to transform the country’s power sector was also to allow private sector participation in ECG with the Power Distribution Services (PDS) expected to make an initial investment of US $ 586million over the first five years of its operations.
The compact would support improved management of Ghana’s entire power system, providing a more robust framework for private investment, in addition to a more competitive process for the procurement of power from independent producers. Again, it would address challenges in distribution, generation and access to energy in Ghana.
Per the initial agreement, the concessionaire was to hold 80% stake and manage ECG for a period of 25 years, while the Ghanaian ownership was to be the remaining 20% stake.
However, in fulfillment of a campaign promise prior to the 2016 general elections, President Akufo-Addo, upon assumption of office and through the then Energy Minister Boakye Agyarko reviewed the terms to the current one; where the Ghanaian ownership is 51% share with Meralco Consortium grabbing the 49% stake.
Protest by PUWU
In fact, the journey towards ECG’s concession has not been all that rosy. It was met with stiff opposition from both within and out. The first group of people to oppose it in the then President Mahama’s administration was the Public Utilities Workers Union (PUWU) comprising workers of ECG, NEDCO, VRA, GWCL and GRIDCo.
Their perception was that ECG was going to be sold out. They staged series of protests, including press conferences to demand for severance packages for ECG workers because of the privatization move.
President John Dramani Mahama, then, and current President Nana Addo Dankwa Akufo-Addo, kept on assuring PUWU that ECG was not going to be sold out as they perceived, but that would not assuage PUWU’s worst fears as they pressed down the accelerator. They filed an application at an Accra High Court seeking for interlocutory injunction to halt the privatization of the Electricity Company of Ghana (ECG).
However, the court, presided over by Justice Lorrenda Owusu, dismissed the application and intimated that the court’s decision was based on the governing principle of balance of convenience. She further explained that, the state had more to lose if the injunction was granted, and the final judgment of the substantive case went in their favour.
The court, consequently, advised both the workers of ECG and government, to continue negotiations in order to reach an amicable agreement.
Over some weeks now, we have not heard PUWU lamenting over the deal again. Could it be that because of their terrible defeat in court, so they have come to accept the process and apparently ready to welcome the new entity onboard?
BXC Sues MiDA
Apart from the legal action initiated by PUWU to halt the concession arrangement, one of the entities that was bidding to manage the Electricity Company of Ghana (ECG), but lost also sued the Millennium Development Authority (MIDA), over what it described as an unfair disqualification in the bidding process.
BXC Consortium prayed the court to order MiDA to stop all forms of ongoing discussion and negotiations with the only remaining company in the ECG Privatization process, which was Meralco Consortium from the Philippines.
Unfortunately, the court, in its ruling, dismissed the injunction case, but granted an injunction to restrain MiDA from drawing on the bid bond.
MiDA Boss speaks
In a recent interview at a press soirée, the Chief Executive Officer of the Millennium Development Authority (MiDA), Martin Eson-Benjamin, who walked this author through the processes his outfit had followed so far, said: “When the agreement was signed in 2014, we were given two years to do preparatory work and it was to end in 2016. The Compact entered force but four months afterwards, there was change in government. The new administration, led by President Akufo-Addo, reviewed the terms of the agreement to allow Ghanaians to have majority share in ECG.
“We have gone through many processes and now I can tell you that everything is almost completed for the new company to take over. The takeover will bring efficiency and we will all see the improvement in the new company,” he assured.
He added that the company would also work to remove leakages and financial losses in the system. Mr. Eson-Benjamin reiterated that no worker of ECG would lose their jobs under the Power Compact Two.
“The President, Nana Akufo-Addo, himself has given the assurance and has stated publicly that no worker will lose his or her job. I also want to assure you that no worker will lose their job under the agreement. Workers should go ahead and do their jobs as expected and nobody will lose their jobs,” he stressed.
Mr. Eson-Benjamin maintained that it was important to complete the compact to open more opportunities for Ghana to benefit from future compacts.
“This is free money. It is free money for Ghana to benefit from. We must all, as a nation, help to get this money to improve our power sector,” he ended.
Expectations
As the new entity takes over ECG, what Ghanaian consumers are expecting is nothing but cheaper and stable power supply to spur economic growth. Over the years, consumers have been made to pay for higher electricity tariff with the assurance that the services would improve, but that is yet to happen. We want to see a significant reduction in commercial and technical losses, which currently stands at 23% to a single digit to help push tariff down to bring relief to consumers, especially businesses.
In the coming months, we also want to see the new entity going after those engaging in illegal connections and to be specific companies in Tema and other parts of Ghana, which were caught for power theft in 2018.
ECG is the backbone of Ghana’s economy. Therefore, we expect Power Distribution Services (PDS), led by Meralco, to work hard to make sure that the six key deliverables of the compact are achieved.
The author is specialized in energy reporting
Email:[email protected]
Illegal connection: How will Amewu fight it?
I was once a Muslim but now a convert to Christianity. You may be wondering why I decided to go on this religious tangent, but I must emphasize that my intention is not to spite anyone, except to illustrate a point due to the subject-matter of this article.
Indeed, this article is intended to discuss power theft, or what we popularly call illegal electricity connection.
By the way, what is illegal connection? It is a situation where consumers by-pass the metre to enjoy free electricity without paying for it.
It will interest you to note that both the Bible and Quran abhor or frown on thievery, and to buttress this, let us look at Exodus 20:15 (Holy Bible) and Quran 5:38.
Exodus 20:15 reads: “Thou shalt not steal,” and Quran 5:38 says: “And (as for) the man who steals and the woman who steals, cut off their hands as a punishment for what they have earned, an exemplary punishment from Allah.” This means that those who profess Christian and Islamic faith are required by their religion to refrain from engaging in stealing or theft.
Shamefully, a lot of us Christians and Moslems are guilty of theft: We steal in one way or the other. And one of the organisations in the country that our thievery is hurting so much is the Electricity Company of Ghana (ECG).
It baffles me how a country with majority of citizens professing to be Christians and their Muslim brethren, who are required by the tenets of their religion to refrain from such acts, could be indulging in criminality.
It is disgusting that religious leaders, who are to lead exemplary lives for their ‘flock’ to emulate, are also equally guilty of the illegal electricity thievery.
For instance, in June this year, the head pastor of Miraculous Jesus Ministry in Koforidua in the Eastern Region, Prophet Nyame Akwadaa, was found to have illegally connected power to his church.
This criminal act, which covered a period of 24 months, amounted to GH¢19,087.41
Then in August 12, this year, the Kumasi Suame Service Centre of the ECG, in collaboration with the area’s police, arrested individuals including elders of two churches-Church of God, Kwapra, and Holy Church of The Lord, Kronum-for illegally stealing electricity.
Another example was a pastor friend resident in Ashaiman, who was caught by the ECG for electricity thievery. I could go on and cite many more instances, but so that I do not bore you with them, let me blow your mind with the staggering data on illegal electricity connection.
As at the end of 2017, ECG had examined about 534,121 metres across its operational areas namely Ashanti, Western, Central, Eastern, Greater Accra and Volta Regions. And out of the total number of metres that was examined, 18, 985 were tampered with. This means that consumers of those metres by-passed the system to enjoy free electricity.
Per the regional distribution of illegal connections, Ashanti Region topped with a figure of 7,943, followed by Eastern Region with 3,377, Tema had 2,487 whilst Accra West and Central Region had 1,874 and 1,134 respectively.
Accra East was on the sixth position with 860 whilst Volta and Western followed with 754 and 455 in that order. And a monitoring by the ECG head office also revealed that about 101 metres within Accra had been tampered with. Total amount of revenues that the company lost through the nefarious activities amounted to GH¢45,478,069.00. Out of the figure, ECG managed to retrieve GHC24, 624,442.00.Now, let me further blow your mind with what has happened within the first half of 2018, as far as illegal connection is concerned.
As at July 2018, ECG had examined about 250,616 meters across the country and out of the figure, 11,890 were found to have been tampered with.
Per the regional distribution, Ashanti Region was again ‘comfortably’ leading with 7,653, followed by Accra West with 1,432 and Central Region 688.
Eastern Region was fourth on the thievery log with 671 whilst Western, Accra East, Tema and Volta followed with 402, 398, 304, and 257 respectively.
Per the data, ECG has been able to retrieve GHC26, 007,153 from power theft between January and July 2018.
It is an undeniable fact that illegal connections had been draining the Electricity Company of Ghana and for that matter the economy, and that may be one of the reasons why they have been unable to settle their huge indebtedness to the Ghana Grid Company (GRIDCo).
I believe it is about time, as a country, we become seriously concerned about it and take appropriate steps to deal with the issue of illegal connection.
I became one of the happiest people when I heard that the new Energy Minister, John Peter Amewu, has declared his intention to fight illegal connection because it is draining the economy.
Yes, Peter Amewu must take the bull by the horn by leading this fight as he did with galamsey.
But my question is: How is he going to fight illegal connections since it is a different ball game altogether? Are we going to see the involvement of the military in fighting illegal connections as we saw in the galamsey fight?
Are we going to see the formation of a media coalition against illegal connections as it happened to the galamsey? How about appointing respected traditional leaders or influential persons as ambassadors against illegal connections? Isn’t it about time the Energy Commission reviewed its regulations to make the sanction regime for power theft stiffer?
Illegal connection should be viewed as a threat to the survival of the power sector; hence it calls for a concerted effort to deal with it.
There is the need for the Ministry of Energy to launch a national campaign against illegal connection to raise public awareness about the threat of the issue to the survival of the power sector and carved compelling messages for Ghanaians to refrain from the practice.
The campaign drive should involve influential traditional leaders, media personnel, pastors and Imams and interest groups.
For instance, the pastors and Imams can use their platforms to educate their members to stop engaging in illegal connections.
If we fail to tackle the issue, it is going to land the nation into trouble. Recently, the Institute of Energy (IES) raised concern about the possibility of the country returning to the era of ‘dumsor’, due to the over GHS900 million ECG owed the Ghana Grid Company.
In fact, I cannot conclude this piece without letting readers know how the ECG feels about illegal connection and the determination by the Minister to wage a war against it.
In an interview with William Boateng, who is the General Manager in-charge of Public Relations at the ECG, he said the Company sees it as welcome news, bearing in mind how the Minister’s action against galamsey in his previous portfolio as Minister for Lands and Natural Resources, recorded huge successes.
According to him, power theft has been draining the Company’s finances and for that matter, Ghana’s economy and, in the light of this, the ECG commends the sector Minister’s bold decision.
He explained that power theft is one of the major problems confronting ECG, as far as the operations of the company are concerned.
William Boateng, who described the issue as worrying, noted that power theft contributes to between 15 and 20 percent of the losses in the operations of the Company, stressing that “it is because of this that we have created loss control unit in all the regions.
“We are paying particular attention on illegal connection, so we commend the Minister for his determination to tackle the issue. He has really inspired us and we’re ready to support him to deal with it,” he stated.
He argued that there is the need for the Regulatory Bodies namely, PURC, Energy Commission, as well as the Energy Ministry, to consider reviewing the laws regulating electricity theft to make sanctions against illegal connection much stiffer.
In his view, the law should be reviewed such that if, for instance, a customer engages in illegal connection, that customer would be made to pay for the stolen power and also get disconnected for some weeks or months.
Additionally, he said the culprit could be made to hang a tag around the neck with well emblazoned inscription: ‘I engaged in illegal connection’, and be made to render community service for a month or two.
According to him, such punishment would deter those engaging in illegal connection.
Personally, I totally share in the views expressed by William Boateng, especially the view that we review the sanctions regime to make the punishment for power theft much stiffer.
I also believe that the law should be reviewed to make room for CEOs and Managing Directors of Companies, who are caught to have connected power illegally, to be disgraced by publishing their names in the national dailies to serve as deterrent to others.
The time to deal with illegal connection is now, and we must all rally behind the ECG, Ministry of Energy and Northern Electricity Distribution Company (NEDCo) to stamp it out to save the power sector from collapse.
Kumasi: Tanker carrying LPG crashes into building
A tanker vehicle carrying Liquefied Petroleum Gas has crashed into a building at CPC Krofrom in Kumasi in the Ashanti Region.
The scene according to the Metro Fire Officer, DO2 Rashid Nissau, has been classified as a high-risk area as the contents of the vehicle threatened to leak.
“Gas is heavier than air so there is likely to be a fire outbreak if there is a source of ignition anywhere,” he told Luv FM’s Erastus Asare Donkor.
DO2 Nissau said due to the risk involved, schools closer to the scene have been closed, the children sent home and residents have been advised to evacuate their residence.
He explained fire service, police and the National Disaster Management Organisation are trying to find ways of lifting the crashed vehicle without leaking its contents.
LPG truck Krofrom
He stated, “we were waiting for a truck, but we’ve gotten an advice from BOST that even if a truck should come, offloading the contents will be a problem because of the position of the valves. The valves have been turned upside down.
However, Mayor of Kumasi, Osei Assibey Antwi, told Erastus, using a crane to lift the truck without emptying the contents can be extremely dangerous “when the chains break in the process, the gas content can spill.”
“A bigger tanker is on its way to help empty the gas from this tanker before the cranes will be used,” he added.
Mr. Antwi said, “after the truck was reported to have gone off the road, the proactiveness of the fire service helped manage the situation to prevent a disaster.”
The fire service personnel are trying to cool contents of the tanker by spraying water hourly on it.
Also, two fire tenders are standing by with foam and water to prevent any fire outbreak.
VRA workers threaten to stop National Delegates Congress with lawsuit
There is confusion brewing at the Volta River Authority (VRA) as some workers are threatening to place an injunction on the upcoming Biennial National Delegates Congress which will be held at Akosombo this weekend.
According to the aggrieved workers who pleaded anonymity, the current leadership have violated the constitution of the association as they failed to organise such a programme within the last quarter of 2018.
This they said violates the constitution governing the Senior Staff Association. According to them, the injunction is to enable the court to provide members with clear advice and direction for the Association as it prepares to organise its Biennial National Congress to elect new leaders.
Among the several allegations levelled against the current leadership whose tenure of office had expired since December are that they failed to organise the Biennial Congress within the stipulated period and also failed to furnish members with the statement of accounts.
“According to the constitution, delegates congress was supposed to be organized in 2018 which the current leadership failed to do and also never gave any explanation to that effect, which is in violation of the constitution of the Senior Staff association”.
“Again the leadership failed to furnish members with the annual statement of accounts which gives room for suspicion for mismanagement of the association funds.”
To this end, the members who believe the leadership are hiding something have decided to go to court to seek clarity on the constitution and also appeal to the court to allow for an independent auditor to scrutinize the accounts of the association from 2016 and 2018.
“Per the constitution (Article Fifteen) of our 2012 constitution, we need to have the Annual Delegates National Congress to deal with the constitutional amendments and our financial statements under the year of review, 2017 & 2018 before the Biennial National Congress to elect new executives. There is no constitutional clause to combine both in a year without calling for Emergency one-day congress to deal with the postponement as the case may be. Failure to these processes, we have indicated our intention to go to court for breach of the SSA Constitution”.
The workers said there is the need to take a critical look at the constitution binding them as power generators before the planned election of officers takes off on Friday.
“One of the key constitutional mandates of the Senior Staff Association is to promote the greatest measure of co-operation between the Authority’s leadership and the members of the Association (good employer –employees’ relations), and also to seek and promote the general welfare of its members. So it is high time we go to court for an injunction, so we seek clarity into this matter once and for all”.
They further alleged that all twelve current leaders are going into the upcoming elections as unopposed which is surprising.
“This is the first time such a thing is happening here at VRA where all twelve leadership positions have gone into an election as unopposed. We believe these people are up to something and they must be thoroughly investigated.”
“Many of us have decided we are either going to boycott the programme or go there to demand answers to our nagging questions and possibly move for the cancellation of the programme and this could be chaotic if care is not taken. A few people can not hold the destiny of the majority of workers to ransom”.
They, however, urged the Human Resources Directors of VRA and NEDCo to as a matter of urgency act to prevent a disaster and public ridicule.
The Senior Staff Association Chairman, Cephas Duse, when contacted failed to give clear answers to the issues raised by the aggrieved members of the Association.
GNPC Foundation sees progress in ongoing projects in Western region
Executive Director of GNPC Foundation has inspected some of the Foundation`s projects in the Sekondi-Takoradi and the Effia –Kwesimitsim metropolis to have first-hand information on the progress being made in this regard.
Dr Dominic Eduah said the organization’s drive in ensuring inclusive and sustainable development of Ghanaian communities through its social impact investments has alleviated critical social challenges in order to improve the livelihood of the people.
Dr Eduah stressed that their intervention is premised on three core needs; education and training, economic empowerment, and environmental and social amenities.
“So far everything is on schedule. I will pat the head of the unit at the back. I think everything is on schedule. And I’m personally going to ensure that move faster in completing the necessary processes in getting the work done”, he said.
The projects inspected include; a 160 bed capacity hostel with ancillary facilities for the Sekondi Takoradi School for the deaf, a 6 unit classroom block for Sekondi College, a 6 unit classroom block for Methodist Senior High School, 24 unit sanitary facility at Bompeh Senior High School, 8 unit toilet facility at Nana Katabra “A” Basic School, 12 unit toilet facility at Assakae Market, and a guest facility, administrative office, library and computer laboratory complex for the Western Regional House of Chiefs.
Dr Eduah assured of an evenly spread of such interventions across the country.
“We’ve nationalized the projects that we are doing. The projects cut across, it’s in every district as we speak. We are ensuring that we attend to the various requests that come to our table. We are not restricting it to the Western Region”, he said.
The Head of Environment and Social Amenities of the GNPC Foundation, Patience Lartey observed that the progress of work though has been met with some challenges, they are within schedule.
She explained that the challenges were mainly technical and logistical in nature with contractors, and some others regarding land, with title holders.
Mrs Lartey said that such matters have been resolved and is convinced of having these projects completed soon.
She added that “we will repeat the same projects…we will do water- boreholes for deprived communities, the school blocks, the sanitary facilities because they are the main focus of the Environment and Social Amenities Unit. That is our focus because the deprivation is high, not just in the Western Region…it cuts across.”
Some of the beneficiaries of the yet to be completed projects expressed great joy saying the projects will bring a lot of relief to them.
For instance, in two schools where the foundation provided sanitary facilities for them, the management of the schools lamented about how students will leave campus in such of a sanitary place but will never return to school or will end up losing important academic time which hitherto affected their academic performances.
Energy Ministry institutes Cash Waterfall Mechanism to deal with legacy debt
The Ministry of Energy has begun instituting a Cash Waterfall Mechanism (CWM) to prevent the growth of the sector-wide indebtedness as the Ministry services legacy debts in the sector
A waterfall payment is a payment system that allows debtors pay higher-tiered creditors their full interest and principal first before lower-tiered creditors receive their own principal and interest payment.
Debtors usually structure this mechanism into tranches in order to prioritize and finance the loans with the highest debt obligations, principal and interest inclusive. The idea is that most expensive debts should be serviced first.
In July, 2017, Cabinet approved the implementation of CWM as a new revenue distribution system to address the increasing legacy debts in the energy sector.
This mechanism is part of a wider strategy to ensure an equitable distribution of energy sector revenues to all stakeholders in the value chain as the ministry plans to put an end to the practice where some power producers are given priority over others in terms of financing.
Some experts in the energy sector have asserted that this type of mechanism is effective for companies and entities servicing more than one loan.
The legacy debts themselves in terms of the total portfolio include all the energy sector agencies including Tema Oil Refinery (TOR), Volta River Authority (VRA) and Electricity Company of Ghana (ECG) among others.
Currently, a total of Gh¢4.78 billion out of over Gh¢6 billion of the legacy debt owed by VRA, representing 80 percent of the amount has been paid by government. However, this payment only reflects on the total debts accumulated by the VRA alone and not the total sector debts.
Briefing the press, the Minister for Energy, John Peter Amewu reiterated the commitment of all the stakeholders in the sector to clear the debt to enable all agencies under the ministry work effectively.
“When you put the total legacy debts together, the payment we have been able to meet will be in the range of about 15 to 20 percent.
What is happening is that because the weaknesses that are already within the system, each time we make the payment, the debt keeps on accumulating. Government shall pursue the process until our target has been achieved”, the Minister said.
However, some energy sector players have asserted that the CWM could yield only minimal results if the government fails to fully resource
ECG takeover: MiDA postpones February 1 date
The Millennium Development Authority (MiDA) has postponed the takeover of the Electricity Company of Ghana (ECG) by Power Distribution Services (PDS).
The takeover was scheduled to have occurred on February 1.
A statement from the authority copied to Oman FM, said the decision was taken at a Special Meeting on Thursday 31st January 2019.
It explained that the Board of Directors of the Millennium Development Authority, (MiDA) acknowledged “the significant progress made by all the Stakeholders involved in the ECG PSP Transaction towards meeting various Conditions Precedent to the transfer of the Assets and Operations of the Electricity Company of Ghana Ltd (ECG) to Messrs Power Distribution Services (PDS) Ghana Ltd”.
“MiDA is confident that the transfer will occur in the next few weeks. The Board approved an extension of time to allow the Parties and Stakeholders, namely Government of Ghana (GoG), ECG and PDS, to conclude their Consultations and finalize work on some critical aspects of the Transaction, in order to facilitate a smooth transfer”.
“MiDA wishes to assure Ghanaians that it will continue to adhere to, and uphold high standards of transparency throughout the process. MiDA will announce a new Transfer Date in early February,” it said.
This latest move comes after the CEO of MiDA, Martin Eson-Benjamin announced that PDS will takeover the operations, assets and management of ECG on February 1.
“We have gone through many processes and now I can tell you that everything is almost completed for the new company to take over on February 1. The takeover will bring efficiency and we will all see the improvement in the new company,” Mr. Eson-Benjamin said earlier.
Background
The journey to get a private sector player to manage the affairs of the ECG started after Ghana won the power compact two which is expected to inject some 900 million dollars into the ECG. Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington DC on August 5, 2014.
Under the Power Compact, six projects are being implemented to address the root causes of the unavailability and unreliability of power in Ghana.
The project include ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.
The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.
Ghana earns US$ 813.95 million from 2018 oil liftings
In 2018, Ghana earned a total of US$ 813.95 million from crude oil exports representing lifting proceeds received into the Petroleum Holding Fund (PHF). This is according to Bank of Ghana’s (BoG’s) Petroleum Holding Fund and Ghana Petroleum Funds Semi-Annual Report from July 2 to December 31, 2018.
The PHF received a total amount of US$423.93 million from lifting proceeds in the second half compared to receipts of US$390.02 million in the first half, 2018.
Total receipts from TEN (7th to 9th liftings) were US$223.60 million compared to US$123.88 million received in the first half of 2018 (5th and 6th TEN liftings), whilst receipts from Jubilee (44th to 46th) were US$200.32 million compared to US$203.10 million received in first half 2018 (41st to 43rd lifting’s).
It has been explained that the higher lifting receipts during the second half of the year were predominantly as a result of higher crude oil prices.
Other Income
During the period under review, a total amount of US$77.34 million was received from various entities for the payment of surface rental, corporation income tax, and interest accrued on the PHF account.
The amounts received in respect of other income comprised of US$0.317 million from surface rental and US$76.14 million from corporation income tax. In addition, interest of US$0.880 million was earned on undistributed funds held in the PHF.
Allocations
Total amount distributed from the PHF during the period was US$501.26 million. This comprised proceeds of the 44th, 45th and 46th parcels lifted from Jubilee totalling US$203.10 million, proceeds of the 5th and 6th liftings from TEN totalling US$123.88 million and the first SGN lifting amounting to US$63.03 million.
Other income distributed during the period was US$73.55 million.
Total amount received by ABFA for the second half was US$117.55 million. ABFA target was met for the second half of 2018.
GNPC received an amount of US$162.45 million for its Carried and Participating Interest (CAPI) and Equity Finance Cost (EFC) in the second half of 2018 compared to US$142.82 million in the same period of 2017.
The Ghana Stabilisation Fund and the Ghana Heritage Fund received US$154.88 million and US$66.38 million respectively in the second half of 2018 compared to US$150.84 million and US$64.65 million respectively received in the first half of 2018.
Contaminated fuel saga: Committee report reveals it was not sold to the market – BOST MD
The Deputy Minister for Energy in-charge of Petroleum, Dr. Mohammed Amin Adam, has hinted of a possible prosecution of some persons whose actions and decisions resulted in serious financial breaches at the Bulk Oil Storage and Transportation Company (BOST).
According to him, following the contaminated fuel saga at BOST; two committees were set up explaining that the first one which was a Ministerial Committee was to look into the contaminated fuel issue, while the other one which was set up by President Akufo-Addo was tasked to look into the financial aspect of BOST operations.
Dr Amin Adam who said the recommendations in the two reports are being implemented, however, noted that the Presidential Committee made serious findings about some transactions which occurred during the previous regime.
“The financial issues in BOST were very serious including transactions that are being investigated today for possible prosecution.
“Some of the transactions were done between BOST and the Tema Oil Refinery (TOR). You will remember that we had one managing director for the two companies and it was during that time such questionable transactions took place,” Dr Mohammed Amin revealed this at a Meet The Press series in Accra Tuesday.
He however could not give details of the ongoing investigations.
It would be recalled that sometimes last year Economic and Organized Crime Office (EOCO) was on the heels of Kingsley Kwame Awuah-Darko, the immediate-past Managing Director (MD) of the Bulk Oil Storage and Transportation (BOST) Company Limited, over some alleged payments and transactions that occurred during his tenure.
In one instance, he allegedly transferred more than GHC40m into an account named “Chief of Staff’s Sundry Account” which the BOST boss regularly lodged money into and reportedly cashed by the Office of the Chief of Staff under President John Mahama.
The transactions were carried out under dubious circumstances.
According to letters allegedly signed by Mr Awuah-Darko, the payments were “monies accrued from the security fees taken from Bulk Oil Distribution Companies(BDCs) invoices to effect payments on the cost of petroleum products supplied by Goil.”
The Managing Director of the Bulk Oil Storage and Transportation Company (BOST), George Mensah Okley, has disclosed that the controversial contaminated or off-spec products which were sold by his predecessor did not find their way on the market as it was alleged.
Mr. George Mensah Okley made the revelation at the ‘Meet The Press’ series at the Ministry of Information on Tuesday, February 5, 2019.
It would be recalled that the Chamber of Petroleum Consumers (COPEC), during the latter part of 2018, alleged that some 600,000 litres of contaminated fuel at Zup Oil had disappeared.
Executive Director of COPEC Mr. Duncan Amoah, in a tirade of attack on BOST, alleged that the products had been brought onto the market and cautioned Ghanaians to be mindful of the fuel they bought.
BOST was rife in the news in June 2017 for causing the country to lose some GHc7 million in revenue for allegedly selling some five million litres of contaminated fuel at a cheap price to some two unlicensed companies [at the time] namely, Movenpinaa and Zup Oil, set up days before the sale.
The National Petroleum Authority (NPA) confirmed that the two companies were not licensed.
There were calls for the then BOST MD, Alfred Obeng Boateng, to be interdicted. However, he was cleared for no wrongdoing by the Ministry of Energy.
Fast forward to 2018, the Chamber of Petroleum Consumers (COPEC), again, accused the then MD, Alfred Obeng Boateng, of financial malfeasance.
COPEC, in April 2018, claimed Ghana lost about GHc23 million in revenue when 1.8 million barrels of crude oil was sold at a discount to an unlicensed company.
Alfred Obeng Boateng slammed the accusations, describing them as baseless. Nonetheless, COPEC petitioned the Special Prosecutor to investigate the allegations.
Mr. Obeng was subsequently sacked by the President and named George Mensah Oakley as the new MD.
Responding to a question posed to him by Oman FM’s Michael Creg Afful, the Managing Director of BOST refuted the claims that the off-spec products were sold onto the market.
According to him, a committee that was chaired by the CEO of Chamber of Bulk Oil Distribution Companies (CBOD), Senyo Hosi, to investigate the issue established the fact that the products were not sold onto the market.
“The off-spec products were not sold onto the market as it was reported when it was happening,” he stressed.
He stated that the committee recommended that the products be delivered to the Tema Oil Refinery (TOR) to be refined.
Mr. George Mensah Okley noted that management had already paid the refined charges and are only waiting for the products to be evacuated to TOR.
ECG embarks on mass customer data collection exercise
The Electricity Company of Ghana (ECG) has embarked on a three months special Data Collection exercise, which is expected to end by March 31, throughout its operational areas, to boost service delivery and deepen communication with customers.
The exercise would involve Data Collection from all categories of customers, both prepaid and postpaid meter users, Mrs Theresa Osabutey, the ECG Public Relations Manager, told the Ghana News Agency (GNA) in an interview on Tuesday.
She said the exercise was to help the utility service provider ascertain the whereabouts and the current status of its meters.
She said customers are expected to furnish the deployed Data Collectors with details such as their names, telephone numbers, addresses, and email addresses, as well as other relevant information, to enable ECG to send information directly to them on a regular basis.
Mrs Osabutey said ECG previously embarked on such exercise but only focused on some operational regions and districts, however, this year’s exercise was expected to cover every operational area of the company.
The ECG Data Collection, she said, was being undertaken concurrently within “our exceptional zone of Greater Accra, Volta, Eastern, Ashanti, Central, and Western regions with the exception of the northern zone, which operates under the different power supply”.
Mrs Osabutey advised customers to inspect the credentials of the officials before giving them the information and also urged the ECG Data Collectors to always introduce themselves before soliciting for the information.
Mr Isaac Nurris Ainooson, the ECG Accra East Region Public Relations Officer, told the GNA that customers stand to benefit from the exercise as “it will enable ECG officials issue bill alerts to customers and communicate any other form of information that would be helpful.”
“In our part of the world, people rent houses today and before you know it, they have moved out; it is sometimes even difficult to get the owners of the houses. You end up sending particular information to that house and realise the tenant has moved out.”
“This issue is what instructed this whole exercise of tracking the individual by collecting all the necessary personal information so that we can personally interact with them as and when the need be.”