ECG concession will protect workers for 5 years- MiDA

The Millennium Development Authority (MiDA) has insisted that the concession of the Electricity Company of Ghana (ECG) under the Power Compact II will not lead to a retrenchment exercise.

According to MiDA, the agreement has a clause that bars the concessionaire from undertaking a retrenchment exercise in the next five years.

The Public Utility Workers Union (PUWU) has kicked against the concession, stating that ECG workers will be laid off once the process is completed.

But Speaking to journalists, the Chief Executive of  MiDA, Ingineer Owura Safo stated that the concession agreement will rather create more jobs and not result in a retrenchment.

“Unlike Ghana Telecom it was determined right from the very beginning that ECG was not over staffed. They didn't have more people than they needed and the bases of that decision was made that there shall be no retrenchment,” he said.

Mr. Safo explained that workers of ECG will be protected for five years as long as they observe the work ethics and reforms that will be introduced to make the company efficient.

Reacting to a question on how the concessionaire can succeed with the same human resource that have run down the company, Mr. Safo maintained that the new managers will inject efficiency and turn around the operations of ECG to make it profitable.

“The concessionaire is coming to reduce inefficiency. In fact if the concessionaire is able to reduce the inefficiencies by half , ECG will be a profitable organization. It will save ECG 150 million dollars. The workers will be the beneficiaries. So there will not be any retrenchment,” he said.

He debunked assertions by PUWU that tariffs will go up after the concession is completed, stating that the injection of efficiency will rather lead to stable tariff regime.

“There will be improved performance and reduction in the current losses of ECG leading to a progressive lowering of tariffs,” he said, adding that “government will also continue to purse rural electrification under the concession”

He stated that extensive consultation has been undertaken to allay the fears of the workers but some of them have reacted negatively due to misinformation.

Compact II enters into force
The Ghana Power Compact, also referred to as Compact II, entered into force despite a law suit against the Millennium Development Authority (MiDA) over the concession of the ECG.

A press statement released recently  by MiDA and copied to Citi Business News explained that by the action, the treaty which was signed on August 5, 2014 between the Republic of Ghana and the United States of America, represented by the Millennium Challenge Corporation (MCC) has become effective and Ghana now has access to the Program's funds.

The Compact II
Under the Power Compact, six projects will be implemented to address the the root causes of the unavailability and unreliability of power in Ghana

The project include ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and  Access Project.

The rest are Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project,.

The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders' Summit in Washington on August 5, 2014.

Ghana to get over 498m dollars
Ghana signed the Power Compact with the United States of America acting through the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders' Summit in Washington DC on August 5, 2014.

The Ghana Power Compact would provide Ghana with a grant sum of four hundred and ninety eight million, two hundred thousand United States Dollars (US$498,200,000) to improve the performance of Ghana's power sector, unlock the country's economic potential, create jobs, and reduce poverty.

About US$350 million of the grant is being invested in ECG to make the country's power distributor operationally and financially more efficient.

The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA).

By: Lawrence Segbefia/citibusinessnews.com/Ghana