Government will hence forth procure power on competitive basis, the Minister for Energy Boakye Agyarko has indicated.
The Minister at the National Policy Summit on Tuesday said though the Mahama administration failed to ensure competitive bidding in awarding power contracts, the NPP administration will take an entirely different approach to ensure value for money.
“We know what happened when we went into the power crisis from 2012 and in the indecent haste that followed, we were procuring emergency power left, right and centre and therefore the guidelines or the proper shopping methodologies that ought to have followed were not. These things are best done on competitive tender.
“We had an open book in terms of the power purchase agreement so the supplier then came and said we will negotiate this price and PURC gave it a blessing and so for the same commodity; electricity, one producer is selling to us at 10.14 cents a kilowatt tab, another is selling at 19 cents a kilowatt tab, some are proposing 22 cents a kilowatt tab for the same commodity, electricity. In our emergency, our first respondents gave us anything and we had to take it that is why going forward all power will be procured on competitive basis…”
The Minister also revealed that power generators will be required to carry their own “fuel risk” and reduce the price at which government purchases power.
“We propose that power generators carry their own fuel risk. We also propose that we cap the price at which we will buy power from anybody. We are looking at 10 cents. If you can provide ten cents we buy from you. If not sorry. Electricity is a commodity and it has to be treated as a commodity.”
The Mahama administration has come under intense criticism for securing power deals believed not to be in the best interest of the country.
The NPP administration in a bid to ensure value for money tasked a 17-member committee to review of one of those projects, Ameri power deal.
The Minister, at the same event, indicated that government will strategise future power deals.
He argued that most of the agreements with Independent Power Producers failed to fully address the energy needs of the country.
He therefore pledged to employ some strategic policies to guarantee the efficient generation and distribution of power across the country.
“We will also use standardized procedures and documentation so that all the liquidity and security documentation that comes with power procurement will be standardized. Investor A faces the same standard document as investor B,” the Minister added.
