President John Dramani Mahama has ignored the plea of workers of the Electricity Company of Ghana (ECG) not to privatize the distribution company.
While workers of ECG are calling on the authorities to list the company on the Ghana Stock Exchange (GSE) to enable Ghanaians own shares in it, President Mahama has chosen to lease it to a private investor for 25 years because the company had failed to collect appropriate tariffs from consumers.
He added that losses in the power distribution system were unacceptable.
President Mahama, who disclosed this at the 21st breakfast meeting with the Ghanaian business community organized by the Ghana Investment Promotion Center (GIPC) in Accra yesterday said: “We signed the agreement with the Millennium Challenge Corporation (MCC) to improve the distribution of power and make sure that we are collecting revenues more efficiently.”
“We have tried as much we can with ECG but it has not been able to collect the revenue for the power that is generated. That is why we agreed that the private sector should come.”
He said government’s decision to allow private participation in the country’s generation mix has worked in many countries, adding that Cote d’Ivoire had adopted it.
“It has proven that the private sector is better in collecting revenues so the distributor can concentrate on issues that they need to do to ensure that power is regular and consistent.
“And also to improve efficiency in the distribution system so that we are able to collect revenue more effectively and be able to pay those generating power,” Mr Mahama said.
Power Crisis
The President conceded that the power crisis that bedeviled the country over the last years affected the economy and businesses.
“So it was very necessary to resolve it so the only way was to fast track emergency generation as quickly as possible. So we did the speediest fast tracking of generational capacity in the history of Ghana. For 18 months, we managed to pull in some 850 megawatts of additional generation into the system that helped to stabilize the situation as we have currently, he said.
Over Generation Risk
Going forward he said, “We need to do some adjustment in the system. We are at the risk of over generation.”
“If you enter into an era of over generation, then it affects you because the power is being produced and you must consume it and if you don’t consume it, you pay the capacity charge anyway.
“So we have to push some to our neighbours, whose power consuming is very low as compared to Ghana. Nigeria cannot meet their demand so we have to speak to them to accept some of our power,” he said.
President Mahama urged captains of industry to build more factories to consume the excess power that the country would be producing in future.
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