[ 2016-07-04 ]

Indebtedness of ECG scares potential investors away
The financial challenges facing the Electricity
Company of Ghana (ECG) is scaring potential
investors as government makes it clear it has
taken a firm decision to privatise the entity.

Joy News is learning that out of the 60 private
firms, both local and foreign, that expressed
interest to partner ECG, under a 25-year
concessionaire arrangement, 57 of them have pulled
out of the deal.

The reason according to the ranking member of the
Finance Committee of Parliament, Dr Anthony Akoto
Osei, is as a result of the indebtedness of ECG
which currently stands at GH¢3.7 billion.

He was contributing to a debate to approve a loan
of $80 million to enable the Company procure
prepaid meters.

"We know ECG is going under some form of
privatisation and we know that about 60 companies
replied for the request for proposals but right
now only about three are left because of this
situation we are in; because if you are a private
company and you are told to come and inherit
GH¢3.74 billion [debt] you would be wondering who
is going to pay," Dr Osei said.

In May this year, the acting Head of Finance of
the ECG, Mr Frank Anokwafo, revealed at
Parliament's Public Accounts Committee (PAC)
sitting that government owed the Company GH¢950
million from subsidies and non-payment of bills,
while private institutions and individuals owed
GH¢610 million.

Since last Monday, the Company has started a
revenue mobilisation exercise to recover money
owed it by defaulting institutions.

The newly built Cape Coast Sports Stadium which
was said to be indebted to the tune of
GH¢719,792.46, the Cape Coast Polytechnic which
also owes the ECG GH¢1,017,542, as well as the
newly relaunched Ayensu Starch Factory, were
disconnected.

A senior officer of the Power Ministry told the
media Thursday that government is to release
GH¢200 million to settle its indebtedness to the
Electricity Company of Ghana (ECG),

The ranking member of the Finance Committee of
Parliament, Dr Anthony Akoto Osei charged the
Finance Ministry to ensure that the energy
services taxes imposed are saved and used to
liquidate the debt.

Meanwhile Member of Parliament for Effutu,
Alexander Afenyo Markin says government has yet to
make details of the concessionaire agreement
available to parliament.

"We are aware that government is making some
concessionary agreement where government is
allowing a certain minimum private participation
in ECG's operations," Mr Markin said.

He went further to dismiss claims being advanced
by some members of the public that Parliament
approved the sale of ECG.

"Parliament has not approved the sale of ECG, what
we are aware is that under the Millenium Challenge
Account, Compact 2, there is some minimum level of
privatisation over a 25-year period" he
explained.

"To me, to the extent that certain efforts are
being made to ensure the efficiency of in the
distribution of power, I support it as ECG is
saddled with a lot of debt. I am for every effort
that would enable ECG operate efficiently however,
such efforts should not lead to high cost of
power," Mr Markin said.

Source - Myjoyonline

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