The concession arrangement for the Electricity Company of Ghana (ECG) will not result in high power tariffs, the Millennium Development Authority (MiDA) has said in a statement.
This is against claims by the Public Utilities Workers Union (PUWU) that the privatisation of the state power distributor will result in, among others, high tariffs due to the expected profit margin of the private investor.
PUWU last week demonstrated and suspended services for hours over the concession move by government but a statement released by MiDA on Tuesday August 30 said: “It is also not the case, as alleged in the press statement of PUWU that high tariffs will result from the concession agreement. On the contrary, improved performance and reduction in the current losses of ECG should facilitate progressive lowering of tariffs.”
According to MiDA, the concession agreement available for ECG was done with integrity, transparency, and good faith as all stakeholders were consulted.
MiDA added that the fears of the workers are unfounded as the concession move will strengthen the balance sheet of ECG and make it productive.
“The ECG financial and operational turnarounds project also recognises the need for significant investment in the power distribution infrastructure and the operational systems of the ECG. It is in response to that need that over US$350 MILLION out of the US$498.2 million for the Compact programme has been allocated to the ECG,” it stated.