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Opinions of Monday, 30 May 2016

Columnist: Ata, Kofi

Is ECG electrocuting Mahama's second term chances?

Ghanaians have been experiencing astronomical increases in electricity tariffs far above what was approved by the utility regulator, Public Utilities Regulatory Commission (PURC) since December 2015.

In fact, domestic and commercial bills are so high that there is hue and cry in Ghana.

This article is the analysis of the current electricity tariffs and other related matters.

I once predicted in an earlier article that President Mahama should forget a second term if his government failed to resolve dumsor, and it appears that prediction could be on course to becoming reality but this time, it’s not because of his government’s failure. Instead, forces within the Electricity Company of Ghana (ECG) are at work to deny Mahama a second term.

The power crisis has been with Ghana as far back as 2013. Initially, I assumed President Mahama had taken his eye off the ball but a reliable source in Ghana indicated that the president was indeed on top of the problem but the technocrats were not being honest with him on the extent of the problems and how to resolve them.

In the midst of dumsor and to the disappointment of many came the sharp increases in electricity tariffs. PURC approved electricity tariff increment of about seventy percent in 2015. ECG claims that in addition to the seventy percent, there are other taxes approved by parliament to be added. For the sake of this analysis, let’s assume that the PURC approved increment and the parliament approved taxes add up to hundred percent increment. That means a household that paid an average monthly electricity bill of Ghc 200.00 should now pay Ghc 400.00 (assuming their average monthly consumption remained the same).

However, the experiences of both domestic and commercial consumers are far over and above what was approved by PURC plus the taxes approved by parliament.

In reality, many have seen between five hundred to thousand percent increment (after ECG installed new prepaid metres). According to one consumer who spoke to Citi FM, his electricity bill has shot from Ghc 200.00 a month to Ghc 2,000.00 (at the same level consumption). This amounts to an increase of nine hundred percent. This is fraud, theft, day light robbery of consumers and an illegality by ECG which in my view is a deliberate sabotage with a political objective.

Households and businesses across the country are facing the same plight. Consequently, some small and medium size enterprises (SMEs) have either folded up or are going out of business because they cannot afford to pay the astronomical electricity bills.

Yet, institutions such as PURC, ECG, the Ghana Standards Authority and the Ministry of Power that are charged with the responsibility of assisting the president to govern the country in the best interests of the people, have failed to do anything about this theft, fraud and illegality for six months.

Let me explain why I suspect that the defrauding of electricity consumers by ECG through the abnormal tariffs is a deliberate sabotage against Mahama’s government and politically motivated to damage his electoral success in November.

Under the US Power Africa programme, President Mahama’s government through the Partnership for Growth and the Millennium Challenge Corporation signed a $498.2 million Second Compact with the US in August 2014 for the power sector in Ghana. The conditions for Ghana accessing the money is the liberalisation of the power sector. In other words, the ECG is to be privatised or to be opened up for public, private partnership (PPP).

Others, including ECG, believe that the privatisation of or the PPP within ECG is part of the IMF condition.

It is public knowledge that ECG staff are strongly opposed to the privatisation of ECG or the PPP because many of them fear losing their jobs after the PPP. ECG staff are also aware that the main opposition party’s presidential candidate has promised to review the IMF agreement if he becomes president. The ECG staff are therefore working to ensure that President Mahama loses the November presidential election, in the hope that the new government will review the IMF conditions and stop the privatisation of or the PPP.

Sadly, this is wishful thinking because the ECG PPP has nothing to do with IMF, but the US government conditions for Ghana accessing the $498.2 million Second Compact money not renegotiate by a future government.

The second reason for the ECG’s sabotage is the arguments used by those us in favour of privatisation or PPP is that, ECG is inefficient; cannot break even financially, have to rely on government subvention for its survival. Staff make illegal connections for consumers and pocket the money. Failure to send out bills to consumers and collect bills etc. (of course, the state also owes ECG in millions of unpaid bills).

If ECG can now collect enough revenue from consumers to be able to break even or make a profit this year, then it can argue that there is no need for the PPP if ECG is making profit. This is why ECG has manipulated the metres to collect more than what has been approved. ECG has forgotten that the PPP is not only about breaking even but also to bring in expertise. The effect of ECG’s theft is making Mahama’s government unpopular and un-electable in November because of very high cost of electricity.

The other reason behind the sabotage is that if businesses cannot pay their electricity bills, they fold up and lay off workers, unemployment rate gets worse. Ghana also becomes unattractive to both domestic and foreign investors because of the high cost of electricity.

Already, there are reports of some businesses in Ghana relocating because of the high cost of electricity. Businessmen and domestic users blame it on Mahama’s government, and that would definitely have negative political implications for the president or government that introduced abnormally high electricity tariffs to collapse business and make life unbearable for the people.

Moreover, according to Kwesi Pratt, ECG staff told him that a prepaid meter installed at his printing press was known as “Usain Bolt”, meaning it runs as fast as the 100 metres world record holder. This is an unwitting confession by ECG that it is aware of the abnormality of the prepaid metres, yet it has done nothing to correct anomaly. It’s deliberate robbery of consumers designed to make President Mahama and his government unpopular.

Finally, my strongest suspicion of the abnormal tariffs being politically motivated sabotage is the reason given by ECG. The ECG claims the extra ordinary increases in electricity bills is due to software error. That is baloney because it’s a complete lie and an excuse to get away with murder.

Though I am not an IT expert, it is common knowledge that software is written by programmers and software has codes. It is what the programmer tells the software that it does. If it is software malfunctioning, then all what is required is the reprogramming of the code and I have checked this with an expert in power sector. Why has ECG waited for nearly six months and not corrected the software malfunctioning? Because it has an axe to grind with the Mahama government, to make it un-electable in November to stop the privatisation of ECG.

I understand from the expert I spoke to that reprogramming the software to correct the anomaly should take days and not weeks, so why ECG is not doing that? If ECG purchased the software through a contract, then it must go back to the contractor to correct the mistake within days but the expert tells me that the software malfunctioning could be deliberate to defraud consumers.

The irony of this whole theft by ECG is that the excess money from the astronomical tariffs will end in the pockets of ECG staff and as revenue for the state.

Moreover, no one at ECG will be sanctioned for this fraud. If President Mahama wants to secure his success in November, he should speak to experts outside ECG to know the truth. That way, he can hold those responsible for this politically motivated fraud on the people accountable.

Some heads must roll at ECG, PURC, the Standards Board Authority and Ministry of Power because they have directly allowed the perpetration of this illegal and criminal act by ECG and PURC; because what they approved is not what ECG is charging consumers but it failed to act to stop ECG acting outside the law.

Standards Board Authority is not excluded because it is the body with the mandate to check the quality standards of goods and services in Ghana and it also failed to check that ECG’s new metres met the approved tariffs, and finally-the power ministry as it has the ultimate responsibility.

The technocrats are deceiving the president about the root causes of the problems with electricity generation and distribution as well as the solutions for far too long.

For example, I cannot understand why Ghana should rely heavily on unsustainable sources of energy (natural gas and diesel) to produce electricity when the sun is in abundance in Ghana. A policy to shift to solar would have resolved the problems in three years. I suggested in an earlier article that businesses and home owners in Ghana should be given tax incentives to import and install solar panels to generate their electricity, instead of generators which are not only expensive but also pollute the environment.

The expert I spoke also recommended that all public institutions in Ghana from the presidency to district assemblies and public educational institutions should install solar panels to generate their own electricity to reduce demand on the national grid.

Instead of a solar policy for the future electricity needs of Ghana, I understand some advisers within the government are talking about building coal power station. There are no coal deposits in Ghana so where will Ghana get the coal from?

President Mahama should reject this stupidity outright for very good reasons. Coal will pollute the environment and cause health problems for generations to come.

For example, coal power station built in Accra will pollute areas in the radius of-from Accra to Cape Coast. When most countries with coal deposits in Europe and the US are turning to solar why should Ghana with sun in abundance turn to coal from China? The money for building coal power station should be invested in renewables such as solar.

President Mahama’s government must be strategic in finding short, medium and long-term solutions to the electricity shortage in Ghana.

For example, full cost recovery must only come from consumers but also efficiency savings by ECG through staff reduction and increased productivity. The problem of wastage within the distribution system must be addressed. At moment twenty percent of electricity produced is lost through distribution because of old distribution network. That is compounded by theft through illegal connection with the connivance of ECG staff.

Resolving the power crisis in Ghana should be multifaceted but certainly not coal. The first point of call is more reliance on renewable and sustainable sources of power and that is solar. There is no or very little transmission cost for solar because it is produced locally and used locally. The sun is in abundance throughout Ghana and solar panels could be installed in the remotest corners of Ghana. The future government policy should be solar, solar and solar.

In conclusion, president Mahama must crack the whip and stop this nonsense immediately. Those responsible for this theft, fraud and sabotage must be held accountable for every pesewa collected and prosecuted for illegal and criminal acts or President Mahama will go down in history as the first one term president. Heads must roll at ECG, PURC, Standards Board Authority and Ministry of Power. President Mahama must-as a matter of urgency-appoint a substantive minister for power because the greatest threat to his second term remains electricity or lack of it and the price consumers pay for it.

Kofi Ata, Cambridge, UK