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PUWU prompts government to dialogue on Compact II

Apr 17
21:04 2017

The Public Utility Workers Union of the Trades Union Congress (PUWU) is calling on government as a matter of urgency, to expedite the proposed dialogue with key stakeholders on privatisation of ECG as promised by President Nana Akufo-Addo.

The PUWU believes such engagement will sufficiently arm government to take a positive decision regarding the proposed concession arrangement of the Electricity Company of Ghana (ECG) as part of the programme under the US Millennium Challenge compact II, under which the country is to receive a grant of US$498.2 million to revamp the ailing energy sector.

Addressing the press yesterday, General Secretary of the PUWU, Michael Adumatta Nyantakyi, recalled that during the state of the nation address, President Akufo Addo stated that there will be dialogue with Labour, ECG and MiDA to iron out the bottlenecks hampering the implementation of the Compact II.

The position was echoed by the Finance Minister, Ken Ofori-Atta during the presentation of the budget statement, and again reiterated during the swearing-in ceremony of the MiDA Board by the President, hence PUWU’s reminder, Nyantakyi stated.

The General Secretary of PUWU also referred to the vetting of Senior Minister, Yaw Osafo-Marfo when he stated certain aspects of Compact II ought to be renegotiated because the requirement that government should settle its indebtedness before the investor takes over ECG is unfair. PUWU endorses this position saying it is akin to “robbing Peter to pay Paul”.

He said the PUWU is not against the compact in principle but opposes handing over ECG to a private entity for 25 years. PUWU believes the ‘single’ concession amounts to creating a virtual private monopoly in electricity distribution.

“The Concessionaire would not have any commitment to the social dimension of ECG’s operation, which will adversely affect rural electrification and undermine government’s proposed ‘one district, one factory’ policy”.

PUWU believes tariffs will go up since the investor would be interested to see hikes in tariffs to boost its profit objective. “This will definitely defeat government’s promise to reduce electricity tariffs”, it cautioned.

PUWU says the delay to meet stakeholders for consultation creates the impression government is dragging its feet, and another area of concern to PUWU is what US ambassador, Robert Jackson, said a few months ago that it is too late to renegotiate Compact II, and that government must go ahead and implement it.

Additionally, Article 7.1 of the compact poses problems since it seeks to override domestic laws by indicating the investor will not be bound by the tariff guidelines set by the Public Utilities Regulatory Council (PURC) and this and other provisions has influenced PUWU’s position.

It is recalled that the immediate-past government made a commitment to implement the private sector participation (PSP), and during its latter term, made a request for proposals, as part of the bidding process but subsequent activities specifically, the bidders’ conference was put on hold following a protest by the TUC.

In the course of his campaign, President Nana Akuf-Addo, at the TUC Hall promised to consult with stakeholders before taking a decision on ECG’s privatization. PUWU believes taking a decision of the Compact is a choice between satisfying the profit motive of a foreign investor, or what will in the long-term help contribute money into the consolidated fund.

“It is a choice between the repatriation of profits from Ghana, as against the option for profits retained in Ghana”.


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