The Minority in Parliament has anticipated 60 percent increase in electricity tarrif this year as a new phase of a private company prepares to take over the management and operations of the Electricity Company of Ghana (ECG).
The Minority Spokesperson on Energy and Member of Parliament for Damongo, Mr. Mutawakilu Adam, stated that Ghanaians should expect an astronomic increase in the electricity tariff as Power Distribution Services (PDS) of Meralco Consortium is set to take over from February 1, 2019.
In an interview with a group of journalists, Mr. Mutawakilu pointed out that the total debt of about GH¢ 2 billion by ECG will force the new managers to raise the tariff.
He reiterated that the energy sector is in huge financial crisis and, that the government should be blamed for such mess.
Mr. Mutawakilu added that the sudden reduction of electricity tariff last year was politically expedient and such decision will have adverse effect on the company.
“The reduction was political reduction and anytime you have political reduction, liabilities will accrue and will force you to increase it more than expected,” he lamented.
Agreement signed by Ghana to hand over ECG
The Government of Ghana signed the Power Compact II with the Millennium Challenge Account (MCC), an independent United States government agency on August 5, 2014.
Millennium Development Authority (MiDA) awarded the operations, investment and management of ECG to Meralco Consortium in April last year, following the completion of the international competitive procurement process and evaluation of the proposals received for the ECG concession.
Meralco Consortium, which won the bid to take over the operations of ECG, has majority shareholder of PDS.
The Meralco Consortium is led by the Manila Electricity Company of Philippines , which covers a third of the Philippines and served a customer population in excess of six million.
Under the Power Compact II, six projects would be implemented to address the root causes of unavailability of power in some parts of the country.
The project comprised ECG Financial and Operational Turnaround Project, Northern Electricity Distribution Company (NEDCo) Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project and Access Project.
The rest are Power Generation Sector Improvement Project and Energy Efficiency and Demand Side Management Project, Social and Gender Integration, Environmental and Social Performance and Monitoring and Evaluation and Economics (M&EE).
The country completed the second year of the Power Compact on September 6, 2018.
Ghana would receive $498 million grant under the Compact to improve the performance of the country’s power sector, create jobs and reduce poverty.
Source: GhanaJustice/S.Ayisi
