Review 2nd Compact of Millennium Challenge Corporation - PUWU
The Public Utility Workers Union (PUWU) of the Ghana Trades Union Congress (TUC) has called on the government to review the terms of the second compact of the Millennium Challenge Corporation (MCC) under which the Electricity Company of Ghana (ECG) is to be given out to a private investor under a concessional arrangement for 25 years.
Advertisement
To back its resolve to resist the privatisation process, the leadership of the group has decided to stage three-hour demonstrations for three days in the regional and district offices of the ECG, beginning yesterday to Friday, August 26 2016, from 8 a.m, while flying red flags, pending further notice.
The union said the ECG could be transformed to achieve the goals of the second compact without private sector participation (PSP) and that could be done through a disciplined managerial and governance transformation, devoid of political interference.
Leadership
“Appoint a dynamic and competent leader through a competitive process on a fixed renewable contract term of five or six years and it should be a binding contract based on key performance indicators that can be independently verified. Create an environment that will enable the managing director to have a free hand to manage and operate the distribution business on sound business and public service ideals,” the PUWU said at a news conference addressed by its General Secretary, Mr Michael Adumatta Nyantakyi, in Accra yesterday.
He also called on the government to meet its obligations and ensure that metropolitan, municipal and district assemblies (MDAs), as well as state institutions, paid for the power they consumed.
Additionally, Mr Nyantakyi called for realistic and cost reflective tariffs to be charged, while the government utilised the five-year period of the compact to prepare and list the ECG on the Ghana Stock Exchange (GSE).
Illss of concession
Giving reasons why concession was not the best option, he said there was the possibility of ‘killer’ tariffs being levied because of the profit motive of the private investor, while the private investor would not also give due attention to rural electrification which was a necessary social intervention.
Mr Nyantakyi contended that placing the ECG in private hands would amount to creating a virtual private monopoly in power distribution and that had the potential of creating danger for the country, in the light of a weak regulatory regime.
Such an arrangement would pose a threat to local content, Mr Nyantakyi added.
More so, he cautioned that repatriation of profit by the foreign private investor would impact negatively on the cedi, noting also that foreign investors normally packed off when there were threats that could affect their returns on investment.
Mr Nyantakyi also cited potential job losses and their attendant negative impact on the citizenry after the first five years, and the fact that there was lack of a real success story of concession in the developing or middle income countries with networks similar to the ECG.
Workable alternatives
In proffering alternatives, Mr Nyantakyi asked the government to give the same conditions promised the private investor to the ECG now.
He also asked the government to give the company about three years to try out the Strategic Business Unit (SBU) concept that it was piloting in the Ashanti Region, after which an appraisal should be done.
Mr Nyantakyi called for investment in the power sector, particularly the procurement of state-of-the-art technology and equipment, to eliminate waste in the distribution of power and improve the distribution network.