The Hidden ‘Dumsor’ Truth Out Now! - WAPCo Stops Service Over $103m Debt

The ‘real’ truth is finally out regarding why Ghanaian households and businesses are going through the current renewed excruciating and devastating effects of energy crisis, after the nation had been consistently fed with obvious lies by President John Dramani Mahama and functionaries of his National Democratic Congress government.

President Mahama recently told Ghanaians that the ongoing ‘dumsor’ was the result of ‘sabotage’ on the lines of the West African Gas Pipeline Company, which transmits gas from Nigeria-Gas (N-Gas) to the nation.

But it has now been established that the nation is going through the current effects of ‘dumsor’ not because of any sabotage, as President Mahama had claimed, but all because his government had failed to meet its financial obligation of about $103m to WAGPCo for gas transmission.

A letter announcing the termination of service rendered by WAGPCo, dated June 16, 2016 with reference number 1.E.25.10-9987, puts the total debt owed the company at US$101.736 million as at June 1, 2016.

According to the letter, signed by Walter Perez, the Managing Director, the debt represents “unpaid overdue invoices for transportation services.”

Titled “NOTICE OF SUSPENSION OF GAS TRANSMISSION UNDER THE TAKORADI GTA”, the letter reads in part: “We write in respect of the captioned matter to inform N-Gas that pursuant to clause 11 of the Takoradi GTA, WAPCo hereby exercises its right to suspend transportation services effective 0800hrs GMT, Friday, June 17, 2016, for non-payment of the sum of US$101.736 million being the unpaid overdue invoices for transportation services as at June 1, 2016.”

The letter sets out in clear terms, conditions that must be met before the company will resume service to the nation. “For the avoidance of doubt, our resumption of transportation services to Volta River Authority would be contingent upon the following: 1. immediate payment of sum of US$25.177 million being unpaid overdue invoices from November 2015 to end April 2016.

2. N-Gas ensuring the securitization of payment for future Transportation Services or Prepayment for Transportation services. 3. Agreement of a bankable and acceptable payment

plan for the ‘legacy debt’ of US$76.559 million (being due and unpaid invoices to WAPCo from August 2014 to end June 2015).”

According to Emmanual Quist, of pulse.com.gh, the fact that VRA now relies on supply of light crude oil from Sahara Energy, instead of gas from WAGPco, is testament to the fact that gas supply from WAPco has ceased and the monies owed N-Gas still remain unpaid.

He notes further that the current erratic power situation can also be blamed on the bad nature of the terms of agreement entered into between the Power Ministry and the WAGPco.

Available information indicates that with the contract for supply of 120,000BTU of gas from the West African Gas Pipeline daily, the company charges the nation US$3.3 per one million BTU , which is very expensive, compared to what is paid in other west African countries. What appears to be more worrying is the fact that there is no breakdown with regards to the price components.

Another disturbing development, according to the online news portal, is the fact that the Power Ministry is required to provide a letter of credit that insulates WAPco from sharp increases in international oil prices. Should prices go 10 percent above the price of $50, the buyer (Power Ministry) will be required to establish a new letter of credit to reflect the increment.

Interestingly, the agreement is silent about any attempt to reduce the letter of credit, in the case that the price of fuel on the international market falls.

The West African Gas Pipeline Company also puts a restriction on what and in what plants the gas can be used. The reason for this condition has not been given.

According to the contract, gas supplied cannot be used for any other power plant apart from those under government’s direct control; neither can it be exported outside Ghana. Should the government decide to fuel other thermal plants apart from its own, the Ministry will have to pay more for the gas supplied.

This is in clear contradiction to the country’s aim of attracting Independent Power Providers into the country, especially if government cannot pass on excess gas supply to them.