350 steel workers lose jobs

A steel factory in the Tema Free Zone Enclave, Rider Steel Ghana Limited (RSGL), has halted its operations due to what it described as high and unfair electricity tariff which has rendered about 350 workers jobless.

The General Manager of RSGL, Tarini Prasad Patnaik, in a statement, said the electricity tariffs paid by the company were much higher than those approved by the Public Utility Regulatory Commission (PURC) for other steel manufacturing companies in the country.

The company is paying the high tariff, because it is located in the Tema Free Zone enclave, where electricity is being supplied by a private distributer Enclave Power Company “

“Since the company started commercial operation in 2013, it has always been charged higher tariff than the other steel companies that take power from ECG outside the enclave,” he said.

Mr. Patnaik said ECG negotiated a preferential price (GH¢0.2185 /Kwh ) on behalf of steel industries in the year 2010 and maintained the same to date, adding that all subsequent power tariff increases from year 2010 were not effected.

He said due to the unfavourable macro-economic environment for the steel industry in 2015-2016, ECG, in consultation with PURC, agreed to maintain the preferential electricity rate (GH¢0.2185/Kwh) given to the steel mills.

“The difference between the negotiated rate of ECG for other steel mills and rates paid by Rider Steel about 240 percent higher which increased our production cost to a level that we could not compete in the same market.

"We have appealed to PURC, Energy Commission and other stakeholders but to no avail," he said.

"Due to the high cost, we were unable to compete with other factories as well as cheap imported steel products. After incurring huge losses, we had to close down the production facility on 23rd October, 2016. Bringing down along with us, the livelihood of over 350 families," he said.

Negative Effects

Orlando Ashiagbor, Finance Manager of RSGL, said the company had major plans of making new investments and expanding their steel factory which has been put on hold due to the tariff anomaly, adding that "as part of our Corporate Social Responsibility (CSR), the company was planning to build a school to provide free education, especially for the wards of its local workforce."

He said, "Ghana is seeking foreign investment and trying to attract new factories, yet the factories in Ghana are sitting idle because of unfair treatment and discrimination.

"We are not asking for reduction in tariff or any concession but an equitable and fair treatment by removing the discriminatory power tariff to provide a level playing field.

Mr. Ashiagbor said the Jordanian shareholders of the steel company have given management up to March 25th, 2017 to resume operations or they would pull out of Ghana completely.

Rider Steel, according to him, would lose all the investments made in Ghana, totaling $20 million.

Mr. Ashiagbor called on government to, as a matter of urgency, intervene in the matter to ensure fair treatment in terms of the payment of tariffs.