The Millennium Development Authority (MiDA) has rejected claims by the Public Utilities Workers Union (PUWU) that the concession arrangement is not the best option for Ghana because it would result in higher tariffs and job losses.
MiDA assured that the consultative process is not over.
A statement issued by Pamela Djamson-Tettey, Director of Communication and Outreach, said MiDA pursued a deliberate strategy of broad consultation to ensure that the resulting ECG Private Sector Participation transaction inures to the benefit of the good people of Ghana.
It said government’s decision to proceed with the long-term concession was only taken after extensive consultations with a broad range of stakeholders, in-depth study, detailed technical reviews and thorough analyses.
It explained a number of viable options were interrogated for PSP in ECG before the concession arrangement was selected, noting that the whole compact is designed to bring adequate and reliable power supply to support economic growth and prosperity.
According to the statement, the ECG’s financial and operational turnaround project also recognises the need for significant investment in the power distribution infrastructure and the operational systems of ECG, and in response to that, over $350 million out of $498.2 million of the Compact has been allocated to the ECG projects.
It stated that the requirement for investment is one of the bidding criteria in the PSP and therefore the government would ensure that the level of that investment is adequate to meet the need of the distribution system.
Rejecting the high tariff accusation, MiDA said improved performance and reduction in the current losses of ECG should facilitate progressive lowering of tariffs.
The release said government has gone to great extent to ensure that the jobs of all ECG workers are duly protected for a period of five years.
MiDA argues that the concession would rather create more jobs in the power sector since an improved distribution system and credible distribution operator in the form of ECG PSP provider would also facilitate the further distribution of power generation, which will result in more reliable power supply, industrial expansion and increased employment opportunities.
Local content
The statement said local participation at both operational and equity levels are integral to the tender, adding that Ghanaian equity participation, which may commence at a determined minimum, would be required to increase over time to ensure that Ghanaians are increasingly in control of the future operations of ECG.
“MiDA wishes to put on record that it has acted with integrity, transparency and good faith in its operations and interactions with all stakeholders. In the particular instance of the ECG PSP transaction, MiDA has worked assiduously to ensure that the process is open, transparent, fair, competitive and inclusive.
“MiDA has pursued a deliberate strategy of broad consultation to ensure that the resulting ECG PSP transaction insures to the benefit of the good people of Ghana”, it added.
It described the statement made by PUWU regarding foreign investors as unfortunate and not consistent with the clear recognition by government that there is value in attracting foreign investment as part of Ghana’s development agenda.
According to MiDA, profits are repatriated by foreign investors in accordance with the laws and regulations of Ghana and cannot be a reason to demand that government should not proceed with plans to attract foreign investment to improve electricity distribution.
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