Parliament has ratified the concession agreement between the government of Ghana and the consortium of investors led by the Manila Electric Company (MERALCO) for private sector participation in the Electricity Company of Ghana.
The arrangement is within the terms of the Second Millennium Challenge Compact, which was laid in Parliament by Mr Boakye Agyarko, Minister for Energy.
Mr Emmanuel Kwasi Gyamfi, Chairman of the Energy committee, who moved for the committee’s report, stated that on August 5, 2014, the Republic of Ghana and the United States of America, acting through the Millennium Challenge Corporation (MCC) entered into a Millennium Challenge Compact.
He said the Compact provides for a grant of up to US$498,200,000 to advance economic growth and reduce poverty in Ghana and commit Ghana and the MCC to a five-year economic development program that will fund investments in the power sector of Ghana.
He said the programme consists of six projects namely: ECG Financial and Operational Turnaround Project, to lease out the assets of the company to private operator to manage the operation of the distribution business, including financing and procuring new investments, or partial or full privatisation.
Mr Agyarko also stated that prior to the coming into office of the NPP administration, government had specified that there must be at least 20 per cent local participation in the Concessionaire’s Consortium.
He said however, upon assumption of office, the current government directed that local participation in the consortium should not be less than 51 per cent, which must be held, directly or indirectly by individuals who are Ghanaian citizen.
He explained that the shareholding structure of the Consortium include Manila Electric (Meralco) of Philippines 30 per cent, Aenergia SA, (Angola) 19 per cent, Santa Baron ventures Ghana 13 per cent, TG energy solution Ghana 18 per cent, GTS engineering Ghana limited 10 per cent and TBK Ghana limited 10 per cent.
Mr Agyarko, further stated that the concessionaire is committed to making critical investments of at least US 580 million within the first five years to achieve the turn-around priorities of the concession arrangement.
He refuted claims from some Minority members that there was no competitive bidding for the project by the consortium.
He said some of the companies which dropped out of the race could not accept majority Ghanaian ownership of the project, adding that, government supports the idea of Ghanaians owning majority stake in the concession.
Mr Agyarko also maintain that MERALCO is a reputable company, which the minority can do their own due diligence on, and that, the shareholding structure of the consortium can be checked from the registrar general.
He explained that there are two levels within the Millennium Challenge Compact, and that, the compact agreement cannot be varied without recourse to the US Congress, however the concession arrangement is all negotiable in the RFP and related documents.
Mr Haruna Iddrisu, Minority Leader, his contribution raised objection to the motion, which he said was not consistent with the agreement that was laid before parliament.
He questioned why the numerous petition before them were not captured in the report presented to the House.
“Mr Speaker, it is important that as parliament looks at this and exercise our power of due diligence and value for money, we serve the interest of Ghanaian people better.”
Mr Iddrisu also stated that in approving this agreement the government must accept two key responsibilities, if tomorrow the electricity distribution system and employees of ECG are worse off the House must hold the persons taking this important decision accountable.
He called for a guarantee of tenure and employment security for the workers of ECG, saying the country must jealously guard their employment security.
He said the House should also be informed of how much each of the partners in the consortium is contributing by way of investments to the arrangement.