Tuesday, 10 July 2018

Meralco to takeover ECG soon after all hurdles cleared

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Adnan Adams Mohammed

All things being equal, Melraco Consortium, a Philippines headquartered company which won the competitive bidding to take over management of the Electricity Company of Ghana (ECG)from among other four shortlisted companies, will soon be the new managers of ECG before close of year.

This is after all hurdles been cleared and Cabinet giving its approval to the Philippines company. 

The only approval stage or legal process left is parliamentary scrutiny and approval or disapproval.

Chief Executive Officer of Millennium Development Authority (MiDA), Martin Esson Benjamin at the launch of the Ghana Power Compact Internship and Mentoring programme noted that, all the necessary work has been done for parliament’s consideration.

“It is gone past cabinet, we don’t know the outcome of parliament but I know cabinet had a good look at it and they were comfortable with it,” he said.

Mr Esson Benjamin explained the processes involved in the ECG privatization.

“You will need an additional seven months to discuss a lot of related issues. The basic agreements have been discussed and negotiated and everybody is comfortable.

But it is like having now been given keys to a house and have some work to do together before you hand over the keys to the person who is going to be the next tenant”, he said.

It can be recalled that, immediately after the announcement of the company that won the competitive bidding, a party, BXC Company Limited, sent MIDA to court for an alleged wrongful dismissal from the bidding process.

However, the Accra High Court later dismissed the interlocutory application which sought to halt the planned concession of ECG.

BXC marched to court with the case that it was unlawfully disqualified from the bidding process by MiDA, describing the disqualification as “arbitrary and without basis.’’

BXC, through the interlocutory injunction, wanted the court to halt the concession process until the final determination of its substantive case.

In a ruling, the Accra High Court, presided over by Mr Justice Jerome Nkrumah, said halting the concession arrangement would make the country miss out on accessing the first tranche of US$469 million under the compact.

The court was of the view that placing an injunction that could lead to the country missing out on the $469m would even not be in BXC’s interest.

“If Ghana misses out, there will be nothing for the applicant (BXC) to bid for,’’ the presiding judge said.

Another reason for the dismissal was that BXC in its suit was seeking US$4 million in damages for its disqualification.

In view of that, the court held that, there was no need for an injunction on the concession process because BXC could be adequately compensated in the event it won the substantive case.

On the other hand, BXC, the court said, was not in the position to compensate ECG and the government if the country missed out on the compact and it (BXC) lost the substantive case.

“This is unmeritorious and is, therefore, dismissed,’’ Mr Justice Nkrumah ruled.

The BXC case is not the first time the planned private participation in the ECG has come under legal attack.

Prior this legal action against the concession, there was another legal action filed by more than 1,000 workers of the ECG and the Public Utilities Workers Union (PUWU), which was also dismissed by the Accra High Court in October, 2017.

Also,  in November, 2016, the Accra High Court dismissed a case filed by a farmer, Saaka Salia, on the basis that he had no legal capacity to initiate the action.

The Government of Ghana, on August 5, 2014, entered into an agreement with the USA, acting through the MCC, to make momentous changes in the power sector in Ghana.

Known as the Ghana Power Compact or simply Compact II, the MCC is expected to invest up to US$498.2 million to transform Ghana’s power sector and stimulate private investments.

Under this compact, six projects will be implemented to address the root causes of the unavailability and unreliability of power in Ghana which are ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.

Others include Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project.

In order to attract more women into the power sector, MiDA has launched the first ever Ghana Power compact internship and mentorship programme for women in Science, Technology, Engineering and Mathematics (STEM).

The pilot project will see 50 female students from 5 universities go through a two-month internship in the power and energy sector. This project is expected to run until 2021 with the aim of seeing over 300 females trained and mentored.

Beneficiary schools include Kwame Nkrumah University of Science and Technology, Accra technical University, Koforidua Technical University, Kumasi Technical University and Akwatia Technical Institute.

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