Why the decision to privatise ECG is flawed?

The Communication Director of the National Democratic Congress (NDC) is reported to have lauded government's plans to privatise the Electricity Company of Ghana (ECG), as part of government's efforts to improve the company's efficiency.

The party communicator alleged on Atinka FM on Thursday that, ECG is being run down by some persons who are only interested in making money at the expense of the innocent consumer.

Solomon Nkansah is again reported to have argued that the current crisis in relation to the controversial billing system has been triggered by the selfish interests of some officials adding that such greedy persons will be exposed immediately the company is privatised.

While the Public Agenda acknowledges that the country's only power distribution company has problems, Mr Solomon Nkansah's view of how these can be resolved is rather simplistic, and does not take into account that no privatisation of the kind being proposed by the Mahama administration has ever brought efficiency.

The Aqua-Vitens Rand management contract which bore a lot of the hallmarks of the proposals in respect of ECG, failed to deliver efficiency in urban water delivery. Indeed, consumers became worse off under that Private-Sector-Participation (PSP) arrangement in the water sector than they were before its inception. There is certainly no doubt that Ghana Water Company under Ghanaian management today, is doing far better than Aqua-Vitens Rand did on by-far bigger salaries.

Another concessioneering arrangement, under Speed Wing Limited of the U.K. in the aviation industry, ended up bringing Ghana Airways completely on its knees, with Speed Wing compounding the debt situation of the national airline.

Ghana Telecom was also privatised, this time, to a strategic investor, Vodafone. The excuse was as always, to address declining market fortunes, and the need to introduce efficiency into its operations. Today, Vodafone is struggling to remain viable.

Going the same path, while at the same time we are confronted with several evidence of other forms of privatisation that have worked for this country, exposes this government either as a group completely oblivious of our history of privatisation, or completely blinded by greed and a desire to unduly profit from the transaction, as some allegedly did in the Vodafone transaction.

These two probable reasons for the government's posturing on ECG gain grounds given that the process leading to the choice of the concession was not consultative, and also that it completely disregarded such successful forms of privatisation as GOIL, GCB Bank, and SIC.

What sets these particular forms of privation apart from what the social democratic government is trying to do with ECG is that, selling government's stake on the Ghanaian stock exchange, transferred ownership from the state to the citizens, including institutional investors, ensuring that profits are retained in the country to drive development.

They also improve accountability as shareholders held management to account and to deliver on its mandate. This surely is a clear case of not needing to re-invent the wheel.