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MiDA's RESPONSE TO PRESS STATEMENT BY THE PUBLIC UTILITY WORKERS UNION (PUWU) OF THE TUC ON THE PRIVATE SECTOR PARTICIPATION IN ECG UNDER THE SECOND COMPACT OF THE MILLENNIUM CHALLENGE CORPORATION OF USA AND THE GOVERNMENT OF GHANA
It is most unfortunate that the PUWU of the TUC last week decided to embark on a demonstration in the regional and district offices of ECG every morning for three hours. Their action had implications for Ghanaian families, businesses and communities. We are also particularly concerned about the inaccuracies in the press statement issued by PUWU dated 19th August 2016.
In the press statement, it is alleged that the concession arrangement is not the best option for Ghana. MiDA wishes to recall that the decision of the Government of Ghana to proceed with a long term concession arrangement for ECG was taken only after extensive consultations with a broad range of stakeholders, in-depth study, detailed technical reviews, and thorough analyses. A number of viable options were interrogated for Private Sector Participation in ECG before the concession arrangement was selected. The concession arrangement, and indeed the entire Compact, has been designed to bring to the people of Ghana adequate and reliable power supply to support economic growth and prosperity.
The ECG Financial and Operational Turnaround Project also recognizes the need for significant investment in the power distribution infrastructure and the operational systems of ECG. It is in response to that need that over US$350 million out of the US$ 498.2 million for the Compact Program has been allocated to the ECG projects.
The requirement for investment is one of the bidding criteria in the ECG PSP Tender. The Government of Ghana will ensure that the level of that investment is adequate to meet the needs of the distribution system.
It is also not the case, as alleged in the press statement of PUWU that high tariffs will result from the concession arrangement. On the contrary, improved performance and reduction in the current losses of ECG should facilitate progressive lowering of tariffs.
The Government of Ghana has gone to great extents to ensure that the jobs of all ECG workers are duly protected for a period of 5 years. It is therefore regrettable that PUWU continues to allege that there will be job losses. The reality is that the concession arrangement will create more jobs in the power sector. An improved distribution system and a credible distribution system operator in the form of the ECG PSP Provider will also facilitate the further expansion of power generation in Ghana which will result in more reliable power supply, industrial expansion, and increased employment opportunities for all Ghanaians.
The Government has made clear its determination to ensure a high level of local content in the ECG PSP Transaction. Local participation at both the operational and equity levels are integral to the tender. Ghanaian equity participation, which may commence at a determined minimum, will be required to increase over time so that Ghanaians are in increasing control of the company. Government of Ghana has also approved employee share ownership in the future operations of ECG. Far from there being “danger/threat to local content” as claimed in the PUWU press statement, Government has ensured that all bidders recognize these GoG priorities and comply with them.
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 inures to the benefit of the good people of Ghana.
The statements made by the PUWU regarding foreign investors are, unfortunately, not consistent with the clear recognition, not only by various governments since independence, but also by Ghanaians generally, that there is value in attracting foreign investment as part of our development agenda. It is true that profits are repatriated by foreign private investors but this is done in accordance with the laws and regulations which prevail in the country and cannot be a reason to demand that the Government of Ghana today should not proceed with plans to attract foreign investment to improve our electricity distribution system.
The planned Concession in ECG is in line with the Power Sector Reform Program which was adopted by Ghana in 1994. Under this Program, the Volta River Authority (VRA) was unbundled and the Ghana Grid Company (GRIDCo) was formed so as to have an independent transmission network operator within the context of Independent Power Producers. Additionally, the Electricity Corporation of Ghana, as it was then called, was transformed into the Electricity Company of Ghana so that it would facilitate the introduction of private sector participation in the distribution business.
Power is pivotal to every aspect of our lives. MiDA believes that the people of Ghana deserve a power sector which delivers continuous power to serve the needs of every citizen, whether it is the woman in labor who needs an operation, the child in the classroom, the hairdresser in the salon, the factory worker at his/her machine, or the executive who must meet a deadline. Without reliable power, our country’s ability to compete in a global economy will be compromised. MiDA therefore calls on all Ghanaians to rally behind the Compact and ensure that the promise of prosperity it holds becomes a concrete reality for us all.
Finally, MiDA wishes to assure the ECG staff and the general public that the consultative process is not over and further wish to assure everyone that we will continue to constructively engage the various stakeholders at every stage for the benefit of the country at large. We have and continue to express our willingness to engage the union and the staff of ECG and other stakeholders for discussions on any issue that may be of concern.
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