The African Centre for Energy Policy (ACEP) has said that Meralco Consortium, which was selected by the Millennium Development Authority (MiDA) to manage the Electricity Company of Ghana (ECG), did not fulfill the 51 percent local content requirement before its approval.
The government introduced a new policy which required any company that wins the bid to have a 51 percent Ghanaian ownership in the structure of the concession.
[contextly_sidebar id=”qZczdgSFSica7MuMriG9TZ3pFhzDJLgb”]According to the Executive Director of ACEP, Benjamin Boakye, though Meralco later presented a group of Ghanaian companies as its partners the revelation that it did not fulfill the requirement raises serious questions about the selection process.
“We realised that the company, Meralco has not really satisfied the local content requirement of 51% but they eventually emerged as the winner and were subsequently allowed to put together a consortium to take over ECG. That raises fundamental questions because through the request for qualification, there was specific criteria to be met by any company that was interested in ECG. But if we now have a consortium that did not go through that process how do you satisfy that.
Do you ask them to go though all the requirements that people were disqualified for or you’ll allow them to go on the back of Meralco’s pre-qualification to the post arrangements of the bid processes? How guaranteed are we that these local people that have been brought on board are actually qualified to manage ECG in a way that assuages every fear that we will have an efficient system and a company that is capable of delivering on the terms of reference that will be agreed.”
Benjamin Boakye also demanded that Parliament probe the companies that make up the Consortium which is led by the Filipino firm, Manila Electricity Company.
According to him, it is vital that the companies are thoroughly screened to ensure that they are financially and logistically capable of managing the country’s premier electricity distribution company.
“Parliament will now have to demand the background of these companies that have been inserted into the arrangements. Let’s screen them properly to make sure they are companies of sound footing, sound background because they didn’t go through the criteria that would have determined their qualification and competence to be part of the arrangement. So we have to now screen them properly and make sure that these are companies of good standing that can raise the money to be able to partner Meralco.
“If these happen to be companies that have been pushed to Meralco just to satisfy the local content requirement, it may threaten the successful implementation of the programme. If there’s a cash call and they aren’t able to raise the 51% financing required, it will just mean that politics-as-usual will continue in the management of the distribution sector which will not enure to the benefit of the ordinary consumer.
‘We were excluded’
The Public Utility Workers Union (PUWU), has also accused MiDA and government, of excluding them from the Evaluation Panel during the last round of negotiations that led to the selection of the concessionaire, Meralco.
Speaking to Citi News, the General Secretary of PUWU, Michael Adumattah Nyantakyi, said they find this very strange.
“This whole process, we learned that ECG which is the subject of the whole concession was not even represented on the evaluation panel. So we think something is very wrong because the people who are the asset owners, those whose assets you are going to give out to a concessionaire does not have a say or even appraising who is going to take over the asset.”
Details of Compact II
Under the Power Compact, six projects will be implemented to address the problems of power provision in Ghana.
The projects include the ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, an Access Project, the Power Generation Sector Improvement Project and Energy Efficiency and Demand Side Management Project.
The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
Ghana to get over 498m dollars
The Ghana Power Compact would provide Ghana with a grant US$498,200,000 to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.
About US$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially more efficient.
By: Edwin Kwakofi & Kojo Agyeman/citinewsroom.com/Ghana