Kwame Pianim, An Economist
Kwame Pianim, An Economist
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Be mindful of your roles, you could be charged - Kwame Pianim cautions directors on boards

A former Chairman of the Public Utilities Regulatory Commission (PURC), Kwame Pianim, has reminded directors on boards of public institutions to be mindful of their legal and judicial responsibility.

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He said all directors of public and state-owned institutions must be aware that they are not just appointed onto boards but have responsibilities to discharge, for which reason, if they failed on their roles, they could be dealt with by the state.   

Speaking on JoyNews’ Newsfile on Saturday, April 20, 2024, Mr Pianim, who is also an Economist, commended the PURC for its courageous initiative in imposing fines on the Board members of the Electricity Company of Ghana (ECG) for overseeing power outages without prior notification to consumers.

Background 

The Public Utilities Regulatory Commission recently imposed a fine on members of the Electricity Company of Ghana (ECG) board who served between January 1 and March 18, 2024.

The fine, totaling five million, eight hundred and sixty-eight thousand Ghana cedis (GH₵5,868,000.00), comes as a consequence of the board's violation of Regulation 39 of L.I. 2413, which mandates notifying consumers beforehand of any power interruptions.

Those sanctioned include Keli Gadzekpo, who resigned as Board Chair in March, and the current ECG Managing Director, Samuel Dubik Mahama. The board's failure to issue a public load-shedding timetable by April 2, 2024, as directed by the PURC in a March 18 letter, is the basis for the penalty. The letter also demanded the ECG submit details on planned outages undertaken between January and March.

An analysis of the submitted data by the PURC revealed that 4,142 power outages occurred during the period. Only 165, representing a mere 3.98% of the total, were classified as planned outages by the ECG. Further examination showed that public notices accompanied only 40 of these planned outages, leaving the remaining 125 without any explanation to consumers.

The PURC investigation found that 38 of the 40 notifications failed to adhere to the mandatory three-day statutory notice stipulated by Regulation 39 of L.I. 2413. In essence, the ECG disregarded legal requirements in 163 instances of planned outages.

Rationale for fining board members

The decision to hold the board members accountable stems from the potential negative impact on service quality if the fine were levied directly on the ECG.  The PURC explained, "payment from ECG's revenue would have a rebounding adverse effect on quality of service and consumers who pay tariffs to the company."

The nine board members have until May 30, 2024, to settle the fine into "a dedicated fuel account under the joint control of the Ministry of Energy and the Ministry of Finance."

Mr Pianim noted that when the government established the Cash Waterfall Mechanism, it required ECG to prioritise payment for raw materials before self-compensation, stating that directors should have verified management's compliance with the policy.

“And if they say they didn’t know, then it means the audit and compliance committee was not functioning properly and I’m happy that this is a timely reminder to directors that they have legal and judicial responsibility.

“I’m hoping that the whole country will support the PURC just as they should support the Auditor General when he comes with his findings. 

“As we are also supporting the PURC, they should also know that one day, the consumer is going to take them to court for not regulating ECG properly,” he said.

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