Privatization of ECG is a done deal; no turning back – Dr. Grahama notes

Although there is an extremely important reason to kick against privatizing the operations of the Electricity Company of Ghana, the public outcry would come to a naught because the executive and legislature have committed the nation without thinking through, Dr. Yao Graham analysed.

ECG’s privatization is part of conditions that the country should meet before it starts accessing the 500 million dollar Millennium Challenge Compact Funds from the US government.

The Public Utility Workers Union and Public Services Workers Union have strongly kicked against the privatization.

In a document sighted by Joy News, the groups say that the private sector participation could spell doom for rural electrification because the MCC does not consider it profitable.

They insist that the power distributor’s problem is not its ability to attract funding but failure of government to pay its bills revealing that government’s indebtedness to the ECG stands at 1.2 billion cedis.

The firm position of the union groups is that if the challenge of power supply is not first addressed, the much touted privatization will only bring about increased tariffs and accumulation of profits of the private sector

Dr. Yao Graham who is the Executive Director, Third World Network, told Joy News he strongly supports the position of the workers.

He condemned successive governments for handing over Ghana’s “strategic assets” to foreigners, which he said demands serious discussions to address the status quo.

He said the ECG is in a quagmire largely because of the “flawed” mentality past and present government had about the state asset thereby starving it of revenue.

Dr. Graham cited a World Bank report dating back to 2013 which never recommended the privatization of the power distributor. Rather, he recalled, the Bretton Wood institution maintained that ECG’s capacity to operate would be greatly improved if government pays its debts.

Unfortunately, the “perverse logic” of government institutions using power without paying has yet to change.

He therefore wondered why the very institution (government) that presided over the running down of ECG, would play a holier-than-thou card, and accuse the ECG of inefficiency.

What is even more baffling, in his view, is the fact that the government admits that no company can survive with the amount of money government and state institutions owe ECG.

“Why are our governments ready to destroy parastatal and then turn around to say they are inefficient?…The corrosion and destruction of the ECG has been a long term processing culminated by the persistent shortfall in its revenue, primarily because of government and public sector entities not paying…it is not going to change overnight. So it is important to identify the problem correctly…lets problem not be misstated,” he cautioned.

Nonetheless, Dr. Graham, said regrettably that there cannot be a turning back in the privatization of the ECG after government signed the compact that was approved by parliament.

Dr. Graham recalled that the government sent the MCC agreement to the Speaker of Parliament on the 16 th of July with a cover letter asking for the agreement to be approved by the 18 th of July for the president to presumably travel to the US to sign it.

“The disgraceful way in which Parliament approached this thing, the disgraceful way in which the executive treated parliament, and parliament was complicit, in a way failing in its oversight function…

 “The Finance Committee met hurriedly on the 17 th and wrote a very poor report – they did not examine the document which took years to prepare – and on the 18 th the House met, they waved the 48-hour rule which is required to allow proper analyses of things and passed the thing unanimously.

“The only point of debate in the house was whether Kufuor or Mahama deserves more credit for our relation to the MCC”.

In his analysis, the national interest was “absolutely not served” by the way and manner the compact agreement was reached, adding that government has committed under the agreement to ensure that its debt and debts owed by state institutions are paid before the privatisation.

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