Jinapor identifies flaws in ECG Concession Agreement; calls for review

Jinapor identifies flaws in ECG Concession Agreement; calls for review

A former Deputy Minister for Energy, John Abdulai Jinapor, is calling for a review of the Electricity Company of Ghana (ECG) Concession Agreement.

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A former Deputy Minister for Energy, John Abdulai Jinapor, is calling for a review of the Electricity Company of Ghana (ECG) Concession Agreement.

He alleged that Ghana was shortchanged as the process used in selecting the current managers of the ECG, the Power Distribution Services (PDS) was flawed by government and MiDA.

Mr. Jinapor observed that a careful study of the implementation of the ECG Financial and Operational Turnaround Project reveals the project itself is worth pursuing but the selection process has the potential of throwing the whole electricity value chain out of gear.

Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC) on the sidelines of the US-Africa Leaders Summit in Washington DC on August 5, 2014.

Under the Power Compact, six projects are to be implemented to address root causes of the unavailability and unreliability of power in Ghana.

The project includes ECG Financial and Operational Turnaround Project, Northern Electricity Company (NEDCo) Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project and Access Project.

The agreement also includes Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.

The Yapei Kusawgu MP accused government of altering the original agreement to include friends, family and cronies contrary to the original objective of the ECG Private Sector Participation transaction.

He indicated that “The private sector was expected to lead the turnaround of ECG and make it profitable. In addition, the new concessionaire was expected to improve access to electricity while cutting down on waste in the power distribution system and block all leakages that drain the financials of ECG.”

“The selection process begun in a transparent and competitive manner under the NDC with the overall objective of selecting a company with the requisite technological, financial, and operational know-how to manage the asset base of ECG in an efficient and productive manner,” Mr. Jinapor added.

The legislator also a member of the Committee of Mines and Energy of Parliament, referred to the agreement presented to House stating that a critical look at the Ghanaian partnership in the consortium reveals one of the local partners of MIRALCO; TG Energy Solutions Ghana, which has 18% (the biggest Ghanaian shareholder) shares in the Consortium of investors, lacks the requisite credentials in the energy sector.

Another issue Hon John Jinapor raised was about Hon Andrew Egyapa Mercer, NPP MP for Sekondi and Lawyer Sophia Kokor of the Danquah Institute being named as a Directors of TG Energy Solutions.

He further asserted that one Mr. Philip Ayesu, owner of X Men Barber Salon in East Legon, a suburb of Accra is the main shareholder of TG Energy Solution.

“From detailed checks I have conducted, this company lacks the technical expertise and financial capacity in the energy sector to manage a critical State-owned company such as the ECG with an asset value of over GHc22 billion and a workforce of more than 6,000”, he emphasized.

Independent checks conducted has shown that at the time MIRALCO was filing its tender documents to MiDA, TG Energy Solutions had no office or physical location.

“1st February, 2019 takeover date was postponed by MIDA due to what their statement described as “lapses that needed to be clarified”.

At the time of announcing the preferred bidder by MiDA, all Tier One and Two companies had pulled out following the alteration of the bid process.

Of the two consortia left in the transaction; BXC from China and MIRALCO of Philippines, the former was disqualified because they had dealing with ECG, making Meralco Consortium, a Tier three company the only company left in such major project.

He further pointed to some infractions in the Agreement, notably Article 2.23(g) which states that “Without limiting the rights of ECG pursuant to this Section 2.23, ECG and the Company shall, prior to the Transfer Date, jointly prepare an ECG monitoring schedule and protocol consistent with this Section, providing further detail on ECG’s planned monitoring of the Distribution System.

He added that he is surprised the Akufo Addo led Government failed to ensure that the Monitoring Schedule and Protocol Agreement which is key to ensure that the assets of ECG and are monitored during the concession period was executed.

By this omission, however, ECG will not be in a position to ensure that its assets are well maintained by PDS.

He called on well-meaning Ghanaians to support his call for a review of the agreement because if the agreement is left in its current state will, destabilize the whole energy sector with very serious consequences including rise in the cost of power and a crippling of power generation companies.

By: Kekeli Kuatsenu/awakenewsonline.com