By Laudia Sawer
Tema, April 11, GNA – The Public Utility Workers’ Union (PUWU) of the Ghana Trades Union Congress have refuted suggestions by the Minister of Energy and Green Transition that there are inefficiencies at the retail end of ECG’s operation.
They noted that it was inaccurate for the minister to use that claim to solicit public support for the government’s intended Private Sector Participation (PSP) in the energy sector.
“We do not deny that there are inefficiencies in the operations of ECG and, for that matter, the State-Owned Enterprises (SOEs). It is, however, disingenuous for anyone to suggest that the inefficiencies are only at the retail end of ECG. Such a proposition is only valid in the minds of people and groups who have decided that the “retail operations” of ECG must be privatised at all costs,” the union noted.
Mr. Tomothy Nyame, the General Secretary of PUWU, speaking to the media on the issue, said the issue went beyond the retail end, adding that they have presented a paper to the Ministerial Committee spelling out issues that face the energy sector in general and the power distribution sector in Ghana.
Mr. Nyame noted that the challenges included the financial impact of the existing take-or-pay contracts and the rushed procurement of excess generating capacity in the electricity sector in the last few years.
He added that other challenges included revenue collection bottlenecks largely attributed to metering challenges, including, but not limited to, uncaptured meters, “political meters” arising out of the SHEP, multiples of meters, and a persistent shortage of meters compelling potential customers to find their meters and connect illegally to the grid.
“High cost of electricity procurement. Ghana procures electricity-generating capacity at a far higher price than its peers in the African region. The country also procures electricity generation in dollars and sells the same in cedis. Given the high volatility of the exchange rate, the quarterly tariff adjustments by PURC have not been sufficient to address the exchange rate losses,” PUWU added.
The union further mentioned that government and political interference in ECG’s management, manifesting in several forms, such as the frequent changes of managing directors in the sector, is a concern and challenge, stressing that in the past 15 years, ECG has had seven MDs, who often were politically appointed and empowered to disregard ECG’s strategic plans.
According to them, ineffective corporate governance in the sector; the appointment of a board of directors without recourse to competencies and merits; and the energy sector being engulfed by a culture of political appointees dictating the types and sources of major procurement, such as meters and service materials including cables, conductors, and poles, were other worrying issues.
They noted that this often resulted in the procurement of multiple substandard meters and other equipment in the sector, adding, that the ministry, through SHEP (Self-Help Electrification Programme), installs over 100,000 post-paid meters every year across ECG operational areas, sometimes on the blind side of ECG, which worsens ECG’s technical and commercial losses.
PUWU suggested alternatives to solve the challenges in the sector and obviate the need for privatisation by having a stakeholder board that brings the insight and expertise of the major think tanks and social groups, including labour, to bear on the operations of ECG and the NEDCO (Northern Electricity Distribution Company) to provide the necessary checks and balances for improved efficiency, recommending that the presidency should delegate board appointments to the sector minister.
The union also suggested that the MD of ECG must be given clear deliverables and must be held to strict accountability on them, explaining that the Public Utility Regulatory Commission (PURC) and the State Interests and Governance Authority (SIGA) were expected to create, monitor, and ensure the realisation of such deliverables.
It further indicated that the ministerial oversight of critical decisions must prevail in the sector, adding that the procurement of electricity generation capacity must also be
done through open competitive tender, and generation tariffs must also be renegotiated in cedis and not dollars.
It added that the sanctions regime under the PURC Act needed to be reformed to make it possible for PURC to sanction individuals holding key positions in the energy sector for dereliction of responsibility and abuse of authority, while the ministry must reform the SHEP meters, making ECG a key partner in the implementation or delivery of the project.
They urged the government to take proactive measures immediately to end all forms of political interference in the energy sector, including the management of ECG, emphasising that ECG remains a critical national asset, essential for driving Ghana’s economic development, ensuring national sovereignty and energy security, and fostering social equity.
The union stressed that privatisation of ECG was not a viable or sustainable solution, as the historical failures of privatisaton efforts in Ghana and across Africa demonstrated that surrendering public utilities to private investors often exacerbates existing inefficiencies, compromises national sovereignty, creates unemployment, implicates labour rights, and threatens energy security.
“We believe that addressing ECG’s challenges requires targeted reforms that will tackle the root causes of inefficiencies, such as depoliticising management, enhancing accountability, and implementing effective controls in the energy value chain.”
It added that “the need for urgent renegotiation of IPP contracts from take-or-pay to take-and-pay, competent and merit-based appointments, ECG’s participation in the SHEP implementation, and the modernisation of infrastructure can transform ECG into a financially viable and operationally efficient entity.”
They also urged the government of Ghana to give opportunities earmarked for the private sector to ECG and allow the company to borrow from the capital market to strengthen its operations while maintaining public ownership.
“Ultimately, the government should prioritise the long-term interest of its citizens by ensuring that ECG remains under public control. This guarantees affordable and equitable access to electricity, preserves national sovereignty, protects jobs, and supports broader socio-economic development. A comprehensive strategy that
strengthens ECG as a public utility can safeguard Ghana’s energy future while fostering growth, resilience, and prosperity for all.”
It reiterated that in line with the resolution passed at the TUC 10th Quadrennial Delegates Congress held in August 2016 at KNUST, the TUC and its affiliates would resist any attempt by the government to cede ECG and NEDCo, in whole or in part, to any private entity to operate, stressing that the TUC and its affiliates consider privatisation and private sector participation as the same.
GNA
LS/KOA