Relocation of Ameri plant to Kumasi cost over bloated from $25.48m to $35.6m — ACEP reveals

The Africa Centre for Energy Policy (ACEP) has raised concern over plans by the Energy Ministry to move the Ameri Plant to Kumasi.

In a statement issued by ACEP, it has kicked against the idea, insisting that the processes have lacked transparency.

ACEP reveals that although the relocation according to the Energy Ministry is to cost $35.6 million, its checks have revealed that the cost involved is actually $25.48.

“The Minister quotes $35.6 million as the cost of the relocation in his 17th December 2021 letter to VRA. However, ACEP has sighted the original proposal from Mytilineos SA dated 22nd March 2021 to the Ministry, quoting $25.48 million for the same.

“Instead of negotiating the proposal of the sole-sourced offer downwards, the contract cost has instead increased by 40 percent. It is unclear what accounts for such a quantum leap from the proposal amount by Mytilineos SA,” ACEP notes in its 8-paged statement.

While ACEP accepts the justification given by the Energy Ministry for the relocation of the Ameri Plant, it argues that with the current debt situation of the sector, it is not the best decision.

The Centre proposes that the Energy Ministry should rather prioritise strengthening the transmission systems in place to coincide with a stable power supply for the middle belt from the Bui Dam.

In addition, it wants the Energy Ministry to be transparent to the Ghanaian people in the whole process of relocating the Ameri Plant to Kumasi.

“ACEP agrees that the power system will need some power generation dotted across the country in the medium to long term. However, given the current debt situation and the multiplicity of the challenges in the sector, more optimal planning should prioritize efficiency, effectiveness, and economy for power delivery. Strengthening the transmission system to coincide with a stable power supply for the middle belt from the Bui Dam is more urgent. This would require converting the Bui Dam from a peaking plant to an operationally possible baseload supply plant to support the NITS,” ACEP proposes in its statement.

It adds, “If, for any reason, this recommendation is not an option for the Ministry, which appears to be the case for the past two years, the worst they can do is to ensure that the relocation and contracting processes are done in the most transparent and competitive manner.

“The current processes have no semblance of that transparency required to generate the most optimal cost. The O&M being sole sourced to Mytilineos SA is just an unnecessary cost addition in the face of the fact that VRA has the capacity to manage the plant.”