Mr Boakye Agyarko interacting with some MiDA officials
ENERGY MINISTER Emmanuel Boakye Agyarko yesterday announced that the first of the Electricity Company of Ghana (ECG) private sector participation (PSP) bidders’ conference meant to select a final concessionaire for the company comes off on May 23rd, this year in Accra.
According to him, this has become necessary because any further delays would see Ghana losing $190 million of the compact money.
Mr Agyarko, who spoke after the inauguration of a 7-member ECG PSP stakeholder committee in Accra noted: “We will have the first, second and third bidders conference and it is through the bidders conference that we will take the final shape of what is about to happen.”
Members of the committee include Majorie Adday of PEF; Ernest Afriyie Asare of Energy Foundation; Michael Adumatta Nyantakyi, General Secretary of PUWU; Ben Boakye of ACEP; Albert Sam from GJA; Zigah Samuel for NALAG; and Kofi Bentil for IMANI.
MR Agyarko emphasised: “We will have the bidders’ conference on May 23rd, this year. You see, there are two deadlines. The ultimate deadline is that this is a 5-year compact. After 5 years, the compact expires. And that is in 2021. The second intermediate deadline is September 6, 2018. We are supposed to have certain activities conducted in Ghana by September 6, 2018. If you don’t complete those steps, the balance of a $190 million which is part of the grant is returned to the US treasury and we will lose that money.”
He continued that Ghana has already collected part of the money for upgrading ECG.
“If we miss that deadline of September 6, 2018, it means that the concessionaire will now also have to go up over and above the $500 million, to go and find a $190 million to substitute for what is gone back to the US treasury. This is free money and so I think it will be a needless waste if we don’t get our acts together to access them.”
A bit of clarity
Noting that the ECG deal was not a privatization but rather a private sector participation he explained: “When you have a privatization, the assets are taken away from the government and reposed with the private entity as the owner. It means you have privatized the assets, meaning you have changed ownership from the public space into the private sector.
“But this is public sector participation. The assets will remain the assets of the Government of Ghana through ECG. It doesn’t change. But the assets will be leased to the concessionaire to use after which the assets are returned to Government.”
ECG won’t die
“ECG is not going to die or collapse. A concessionaire comes in, forms a new company, leases the assets of ECG, and uses those assets. Remember also that when the concessionaire takes those assets they are required to invest a minimum of $500 million upgrading those assets. After use, they are returned stock and barrel to the government.”
No job losses
“Secondly, we have said that there should be no involuntary loss of jobs. It means that the concessionaire is required to keep the employees that are grandfathered from the ECG to the new company. If you look at the HR model of what is coming, the average age of the ECG worker is about 50 years, though they retire at 60. So technically on the average, in 10 years, most of these guys would be retiring. And invariably there would be the need for more workers down the line.”
51 percent stake
Explaining what President Nana Addo said recently, he indicated: “When we said a minimum of 51, we mean that the Ghanaian or the Ghanaian entities should come up with 51 percent of the money. Now we are looking at $500 million spread over five years, that is, $100 million every year. It means that the Ghanaian entity must be able to come up with a minimum of $50 million every year for 5 years.
“If you find Ghanaian entities that can come up with more money, then the number will change. All we are saying is that we want a minimum of 51 percent shareholding in ECG for the Ghanaian.”
BY Samuel Boadi
samuel10gh@yahoo.com