The Public Accounts Committee (PAC) has described as a waste of the investment the government makes into the operations of the Electricity Company of Ghana (ECG), due to low returns arising out of mismanagement and poor performance by top echelons of the company.
According to the Kwaku Agyemang-Manu-led committee, the utility service provider had not lived up to expectations in managing the huge public funds at its disposal, resulting in a paltry return of ¢1.1 million, after trading with ¢2.5 billion for the year 2011.
"You can't run an organisation like ECG, with non-current assets running to the tune of about ¢1.6 billion, current assets running to the tune of about ¢946 million, with total assets to the tune of over ¢2.5 billion, and then you tell us in your profit and loss statement that at the end of the year, your profit after tax is ¢1,149,000.
"If I were a majority shareholder in that company, by tomorrow morning, all of you, including the board, would be fired. I am not getting value for my money, and the state is not getting value for the investment," a disgruntled Agyemang-Manu stated.
The PAC made these observations at its sitting yesterday to review the Auditor General Report. The members wanted to know why the huge investment made into the operations of ECG by the government was not reflecting on its returns.
The ECG had appeared before the PAC to answer to questions raised by the Auditor-General in relation to the statement of accounts of the service provider (ECG) for the year 2011.
The Auditor-General had raised series of questions about ECG's statement of accounts for the year under review, mentioning, in particular, the cash and financial challenges confronting the utility provider.
The ECG has numerous bank accounts scattered across the country, and reconciling those accounts has been a challenge to the service provider, which is seeking an upward tariff adjustment to enable it supply power to its clientele efficiently.
The company is also faced with increasing cost of liabilities, which stood at over ¢1.1 billion by the close of the year, 2011.
"When your total liabilities is running to the tune of ¢1.1 billion, with non-current close to about half a billion cedis, it can collapse the company tomorrow morning if all your creditors decide to come for a draw, where will ECG be?" the PAC quizzed.
The Acting Director of Finance of the ECG, Frank Anokwafo, in response to the queries, explained the financial challenges the company was having with the management of its bank accounts across the country.
He partly blamed the banks for not supporting their cause, when one of their schedule officers, tasked with the responsibility of reconciling the statement of accounts of the company, discovered that some monies debited into their accounts were not reflecting.
"Mr. Chairman, like I said earlier on, it was not necessarily the issue with the schedule officer. The schedule officer actually did his work well.
"He was to prepare the reconciliation statement. He came out with those figures that there were monies that were debited into our accounts that we do not get the support for it. They went to the bank, but the issue was with the bank. The bank failed to support the debit, that is what dragged on for that long period," he noted.
But, in a quick response, Mr. Agyemang-Manu said, "then you are taking the blame to yourself. The junior officers cannot go to a Managing Director of Ghana Commercial Bank. You have refused to do your work," and added that "the way you are running several accounts, I am afraid this type of thing will be there."
Deputy Minister for Energy and Petroleum John Jinapor, who was present at the meeting, shared the concerns put forth by the PAC.
"We simply cannot run, not just the ECG, the general power sector, the way we used to. It calls for some changes," he noted.
He told the committee that he had asked for the statement of accounts of ECG to enable the ministry compare the operations of the company on a yearly basis, in order to rectify the challenges they were going through.
However, he said: "Whilst we crack the whip on the ECG, we must also support them. If for two and half years, there hasn't been any increment in the tariff, it also puts a burden on them."