The Northern Electricity Distribution Company (NEDCo) has lost $54.1 million meant for expansion project due to workers’ agitations against the project.
According to the Ministry of Energy, despite all the efforts made by the government to secure the Compact Funds for NEDCo, the staff rejected the management contract mainly on the grounds that it involved the vesting of corporate-wide operational control in the management contract and the other related issues contained in the staff groups’ position on the NEDCo Financial and Operational Turnaround (NFOT) Project.
The Head of Communications and Public Affairs Unit of the Ministry of Energy, Nana Kofi Oppong-Damoah, told the Daily Graphic that the money was to be used for the Tamale area commercialisation project, infrastructure expansion and capacity building.
The fund, he explained, had been reallocated to a bulk supply point (BSP) at Kasoa, which belonged to GRIDCo.
“With the grant (Compact Funds) reallocated to another project, NEDCo would have to seek new funds either by borrowing or other financial arrangements in order to be able to implement projects intended to have been undertaken with the Compact Funds,” Mr Oppong-Damoah stated in a statement issued earlier to explain the circumstances leading to the reallocation of the funds.
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He further noted that the failure to utilise the Compact Funds would negatively affect people in NEDCo’s operational area.
Providing the background to events leading to the reallocation of the funds, the ministry said staff groups from NEDCo stood against the management contract as a form of private sector participation in the company.
“Several meetings were held between the Ministry of Energy, board members and management of NEDCo, as well as senior staff members of NEDCo in a bid to address issues and secure the funds for the infrastructure projects in NEDCo’s area of operation,” the ministry said.
Owing to the stance of NEDCo, it got to a point that the government had to intervene to ensure that the funds were secured.
The government, as in the case of the renegotiation of the terms of the Private Sector Participation (PSP) in the Electricity Company of Ghana (ECG), gave some assurances, including the fact that there would be no job losses but it yielded no results.
Other guarantees the government provided included the fact that there would be no replacement of the existing management team and that nobody would be made worse off.
It also assured the workers that the terms of the management contract would be two years instead of five.
According to the ministry, it also guaranteed that NEDCo would participate actively in the crafting of the management contract to ensure that NEDCo’s interests were catered for in the implementation stage.
It said despite all the efforts made by the government to secure the Compact Funds for NEDCo, the staff rejected the management contract mainly on the grounds that it involved the vesting of corporate-wide operational control in the management contract and the other related issues contained in the staff groups’ position on the NFOT Project.
The ministry also noted that “while NEDCo’s management was communicating government’s assurance to NEDCo in a meeting, some staff wearing red arm and head bands went to the meeting grounds with placards indicating their support for the stance adopted by their leaders.”
The agitations began somewhere around late 2017 and the decision to reallocate the funds was communicated to NEDCo between February and March 2019, a NEDCo source, who wants to remain anonymous, told the Daily Graphic.