11 April 2017

Ghana: Utility Workers Tug Govt Over ECG Privatization

The Public Utility Workers Union (PUWU) has called on government to expedite proposed dialogue with labour and other key stakeholders before taking a firm decision on the private sector participation in the Electricity Company of Ghana (ECG).

"The long delay on the part of government concerning this consultation process creates the impression that the President is dragging his feet on the issue, Michael Adumatta Nyantakyi, General Secretary of the PUWU, said at a press conference in Accra.

In the course of his campaign, the then candidate Nana Addo Dankwa Akufo-Addo promised that should he be elected as president he would undertake consultations with stakeholders including labour, before taking a decision on the ECG privatization.

The matter in issue is the planned concession arrangement of the Electricity Company of Ghana (ECG) as part of the programmes under the US Millennium Challenge Compact II.

Under the Compact, Ghana is to receive a grant of US$498.2 million to revamp the energy sector. A major condition precedent for accessing this grant is the private sector participation in ECG.

According to PUWU, a subsidiary to the Trades Union Congress (TUC), it is not against the Compact in principle but rather opposed to the handing over of ECG to a private entity for 25 years.

"The Union is also against the single concession which is tantamount to creating a virtual private monopoly in the electricity distribution," Adumatta Nyantakyi noted.

The General Secretary believes that the concessionaire would not have any commitment to the social dimension of ECG's operation, which will adversely affect rural electrification and undermine government's "One District, One Factory" agenda.

For him, "Tariffs will go up as experiences in other countries have shown. The private investor is interested to see hikes in tariffs to boost its profit objective. This will definitely defeat the government's promise to reduce electricity tariffs."

PUWU condemned Senior Minister, Yaw Osafo Marfo's comments on the Compact's requirement that government should settle its indebtedness before the new investor takes over ECG.

"Though the Senior Minister saw the need to renegotiate aspects of the Compact, a view we strongly support; the handover of ECG to the private investor is more or less akin to 'Robbing Peter to Pay Paul."

Furthermore, PUWU described United States Ambassador to Ghana, Robert Jackson's remarks that it was too late in the day for renegotiation and government should go ahead with implementation of the Compact, as unfortunate.

"We see it as tacit blackmail of the Ghana government. This is because the Compact II has provisions for amendments and suspensions among others," the Union explained.

In taking a decision on the Compact, the Union thinks that government has a choice between one that satisfies the profit motive of a foreign investor or that which will in the long-term help contribute money to the consolidated fund.

"It is a choice between an option that will lead to repatriation of profits from Ghana as against an option that the profits will be retained in the country. Accordingly, the government must take a decision primarily for the benefit of Ghana."

Ghana

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