Hubtel Debunks False ECG Contract Claims

 

Hubtel Ghana, an indigenous tech company, has clarified claims by some civil society organisations (CSOs) concerning its five-year contract with the Electricity Company of Ghana (ECG).

The company, in a statement signed by Cornelis Otoo, Head, Legal & Corporate Affairs, debunked claims aimed at discrediting the work Hubtel has done in the recent transformation and record-breaking achievements in ECG’s revenue collection and commercial operations.

It said that with the guidance of Hubtel and other third-party service providers, ECG spent about $12 million of the $25 million cost limit to replace old and obsolete systems that were causing severe revenue losses and frequent downtimes.

“These included the upgrading of its core databases from Oracle 10G to Oracle 19C, a new balance management and accounting system, hybridisation of metering infrastructure, overhaul of staff systems for commercial operations, overhaul of customer self-service systems, overhaul of revenue protection systems and others.

“The new ECG PowerApp is only one of the cost lines within these expenditures,” it added.

It noted that some $12 million (cumulatively amounting to about GH¢171 million) has been used so far to overhaul ECG’s old and obsolete systems as part of this project.

It further clarified false statements that the company is owned by political officers and that it is part of a procurement scheme that has received payments for no work done.

“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,” the statement read.

The statement disclosed that Hubtel does not get 3% of electricity bought by ECG customers, adding that for all merchants and retailers using Hubtel’s platform, “we charge a fee of 1.95% on all transactions processed through our payment platform. 1% of this 1.95% 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%.”

The statement added that other fees which are not part of Hubtel’s 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 of the upstream payment scheme provider.

Contrary to the claims that there has been no improvement in ECG’s revenue collection, Hubtel said, “As of the time of this release, a monthly average revenue growth of over 210% (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 is the longest-sustained record of monthly revenue growth in ECG’s collection history.”

It said even with 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 in meeting its obligations to key suppliers in the short-term,” it added.

For the avoidance of doubt, Hubtel said the new commercial systems designed, developed, and implemented by the company 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.

“Hubtel 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 public that our service at ECG has been guided by these principles at all times,” it added.

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