VRA cannot be made to fail

VRA cannot be made to fail

A recent statement by the senior staff members of the Volta River Authority (VRA) with regard to power generation and its associated cost is a source of worry to the Graphic Business.


According to an exclusive document made available to the Daily Graphic (see the front page story of Daily Graphic of Monday, May 13, 2024), the senior staff of the VRA expressed concern that the once-vibrant state enterprise (VRA) and the envy of many private entities in recent Ghanaian history was almost at the point of collapse at 
the expense of “privatisation of the energy sector policy”.

It is not as though the issues raised by the senior staff members are new; rather, their concern is that VRA seems to be getting the shorter end of the stick even when VRA accounts for a bulk of the country’s power needs.

They questioned the “take or pay policy” that has saddled the country with a debt of US$1.5 billion owed to some Independent Power Producers (IPPs) even when they have not produced a kilowatt-hour of power to the national grid”.

They again point to the fact that under the current payment structure, the IPPs which together contribute about 32% per cent to the national grid are paid on regular basis under the Cash Waterfall Mechanism (CWM) while VRA which generates 67% of the remaining energy for the country has been starved of the funds needed for its operations.

Reading through the document, one is at a loss as the decision to peg the IPP’s charges of about 400% higher than what VRA charges per kilowatt hour. 

Of course, there will always be a justification for such charges, such as the cost of the generation mix (thermal as against crude or gas) and other associated costs plus margins among other things.

“The irony is that even the IPPs who are not generating any megawatts onto the national grid now are being paid. What is the basis of paying the IPPs $43 million monthly?” the senior staff quizzed in their document.

This is the crux of the matter. To the concerned workers, it seems that VRA has been at the periphery and rather the focus has been on signing more contracts with IPPs and even extending those whose contracts have elapsed at the expense of the ordinary Ghanaian who has to cough up these monies through tariffs.

Graphic Business is in full agreement with the workers of VRA and so must every Ghanaian be concerned that if care is not taken, such a critical sector will in future be solely be in the hands of profiteers who at any given time can decide to pull the plugs on our energy needs, if the recent energy crisis give us any clues.

The concept of public-private participation is to ensure investments in social services that will bring about efficiency in their operations. 

This efficiency is then passed on to the final consumer by way of lower and affordable tariffs.

Sadly, however, the PPPs tend to be overbearing, costly and beyond the pockets of the ordinary Ghanaian for whom such services were meant to bring relief.

Besides, we also run the risk of compromising on our national security and endangering the lives of many Ghanaians on the back of private entities whose sole aim is to make profit.

In an economy such as Ghana, it will be suicidal to entirely place such prized national assets in the hands of “shylocks who will take their pound of flesh irrespective of the amount of blood they will spill”.

Lest we forget the warning by a former British Diplomat, Greg Murray, when he warned that the concept of privatisation was a pretext to control the resources of especially third world countries such as Ghana.

To us, the signals are clear on the wall and therefore the earlier the government acts fast to save the VRA, the better for all of us.

The warning from the local staff association is a definitive red flag which must not be ignored if the power sector is to be saved from the present challenge.

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