Two firms race for ECG concession

Two companies have submitted proposals for the concession for the management of, operation of, and investment in the electrical distribution business of the Electricity Company of Ghana (ECG).

The ECG Private Sector Participation Activity is one of five activities under the ECG Financial and Operational Turnaround Project of the Ghana Power Compact Programme.

Proposals submitted yesterday

According to the Millennium Development Authority (MiDA), as of the proposal submission deadline of 4pm yesterday, it received proposals from two consortia; namely, BXC Ghana and Manila Electric Company (MERALCO).

Proposals opened yesterday

MiDA explained that the proposals were opened in the presence of representatives of the bidders.

Independent evaluation panel

The next step is that the proposals would be submitted to an independent evaluation panel, composed of local and international experts.

Proposals evaluations to be completed mid April

According to MiDA, it expects the panel to complete evaluations of the proposals by mid-April 2018.

Other milestones to be reached

“Other milestones to be reached in the process by September 6, 2018 are: Negotiations with the Preferred Bidder, Cabinet Review and Recommendation of the Concession Agreement and Parliamentary Ratification of the Concession Agreement,” MiDA added.

Three out of the six companies shortlisted have pulled out of the deal.

CH Group, EDF and Veolia protest

Out of the three companies gunning to win the PSP in the ECG deal, CH Group, EDF and Veolia protested the latest amendments under the amended Request for Proposal (RfP), which introduced mandatory 51% Ghanaian ownership, which gives ultimate legal and beneficial ownership to Ghanaian citizens.

The initial ownership structure was 80% foreign and 20% Ghanaian.

The Millennium Development Authority (MiDA) has extended the deadline to announce a concessionaire for Private Sector Participation (PSP) in the Electricity Company of Ghana (ECG) from September to December 31, 2018.

It will be recalled that the new Country Director of the Millennium Challenge Corporation (MCC), Kenneth James Miller, last week warned that Ghana risks losing $119 million under Power Compact II if government does not take steps to meet certain requirements by September this year.

“We have three years, six months and 30 days until we close, and have September 6, this year for the Government of Ghana to pull a specific trigger on the ECG concession on a private firm to partner Ghanaian partners,” he said.

He pointed out that Ghana has reneged on its promise to meet specific schedules ahead of the implementation of the Compact II.

He maintained that Ghana must quicken its pace in meeting the requirement, to avoid a substantial part of the grant being yanked back to the U.S. Treasury.

BXC Company Ghana Ltd/Xiaocheng Technology Stock Company Limited

BXC Ghana Limited (BXC), a company registered in the Republic of Ghana, is a subsidiary of Xiaocheng Electronic Technology Stock Co. Ltd, which is in the business of manufacturing and deploying highly efficient prepayment metering systems and management of power supply across the world.

BXC was established in 2010 in Ghana by a group of Chinese investors, who have trained and used Ghanaians to implement major projects in Ghana.

In September 2011, BXC and the ECG signed an agreement for 10 years, where BXC shall engage in System Loss Reduction in the Teshie and Bortianor areas; the commercial aim of which was to share proportional losses recovered by the project while technically improving the infrastructure and deploying more modern systems of power distribution management.

Aiming to reduce the losses, BXC co-operated with ECG quite well. Currently, the outcome of the project has been very good. However, both BXC and ECG agree that there are challenges which demand greater BXC and ECG co-ordination in order to minimise the losses and maximise the proceeds.

Manila Electric Company

Manila Electric Company is the largest electric distribution company in the Philippines, covering 36 cities and 75 municipalities, including Metro Manila.

It has been in service for 113 years now and serves almost 5.8 million customers.

The company has market capitalisation of $7.7 billion as of year-end 2015.