Who Advised The Purchase Of VALCO?

'Graphic' editorials are worth serious attention. In many parts of the world there is a leading paper whose editorials reflect the opinion of authority or those highly influential.

The Daily Graphic has time and again been a mouthpiece of the government. Today the Constitution and its institutions have enabled the paper to be fairly independent and to endeavour to promote the national interest in its presentation of news.

Its editorials which dwell on topical or important issues and events should therefore be seriously considered as they tend to reflect the views of authority in general and influence the discerning.

The Daily Graphic reflected a national concern when in its editorial of Friday, March 16, 2007 it described the suspension of VALCO's operations as disheartening.

But how did this situation arise? It appears the nation is in this quandary because of bad advice, because I cannot believe that a responsible government will take such a major decision on energy without technical advice.

The Graphic editorial recalls what many had gleaned from official sources.

According to the Graphic, “the reason the Aluminium Company of Canada (ALCAN) and the Ghana Government teamed up to revamp VALCO was to offer employment to many people both at the plant and downstream.

However, with the power problem VALCO has been compelled to send many of the 700 employees home until it completes plans to generate its own energy.”

Two simple questions arise from this statement.

Question 1

Did the advisers and the authorities consider how much employment would be lost through electricity shutdowns and how many businesses will be distressed or ruined through lack of constant electricity?

Question 2

Who pays the redundancy and other benefits of the 700 and more employees who have lost or will lose their jobs?

Presumably, the government (i.e. you and I) will pay 80 per cent while ALCAN pays 20 per cent. Presumably the parent company which was wise to move out will go scot-free.

To continue, the Graphic is persuaded from the information available to believe in good things to come soon. The editorial continued: “We take consolation from the fact that despite this initial problem of power the impediment will be removed through a combination of factors, including the use of coal which could be imported from some African countries as a source of power.”

I have heard this suggestion over the airwaves. I dismissed this as exuberant ignorance. But if the same information had been fed to the Graphic or the paper had come to it through fairly authoritative channels, then I thought I should disembarrass myself of my own ignorance.

At school I learnt that bauxite was widespread but massive electricity was required to obtain aluminium from it. Therefore plants to produce aluminium were situated near sources of cheap electricity.

Therefore coal, etc., were out of the picture as sources of energy for aluminium production. I wondered whether my knowledge was out of date especially when the Graphic editorial went on to allay fears with the statement that “however with the power problem, Valco has been compelled to send many of the 700 employees home until it completes plans to generate its own energy.”

VALCO to generate energy from fossil fuels and produce aluminium profitably? I feared that old age had made me hopelessly out of date. I telephoned Prof. Adjei Bekoe, Chairman of the Council of State who is one of the finest chemists ever produced in this country and also an internationally renowned chemist, to advise me.

To my annoyance, I could not get through to him. Presently a chemical engineer I knew from his birth walked in. I asked him to educate me. He laughed when I posed the question about apparent revolutionary advances in the production of aluminium. He was amused by what Ghanaians would believe.

My question three therefore is, Can VALCO generate its own electricity and be viable?

Perhaps what is envisaged is that VALCO will add its generated electricity to the national grid to be sold to us at a high price while it uses all the electricity produced by the Volta Dam at the present low rates.

I find the suggestion that a revamped VALCO will make Nkrumah's dream come true rather disingenuous and a sop to Nkrumah enthusiasts.

The Graphic captured the opportunistic information which is being spread as follows:

“The anticipation that the VALCO project could move with vim to enable the aluminium industry to thrive as the founding fathers especially Osagyefo Dr Kwame Nkrumah had wished has to wait for a while.

“It was Nkrumah's desire that the aluminium complex would act as a catalyst for the development of other light and heavy industries.”

If the advice to buy VALCO was to “move with vim” to implement Nkrumah's idea, then it was a very bad advice.

The bauxite deposits in Ghana cannot be developed when there is not enough cheap power even to extract aluminium from alumina imported from Jamaica in a plant specially built for the purpose.

Nkrumah's idea was not that the aluminium complex would act as a catalyst for industries. Nkrumah envisaged aluminium production as part and parcel of the development of light and heavy industries.

And he did not forget agriculture. The irrigation of the Accra plains with water from the Volta dam was part of the comprehensive plan.

VALCO was the price Nkrumah had to pay for getting the Volta dam built. It was not a bad price. I remember him saying that 30 years was not much in a nation's life.

The World Bank would only lend money for the building of the dam to produce electricity if it would get its money back.

VALCO was established to use the large quantity of electricity produced. It had to obtain the electricity cheap as aluminium companies required.

Therefore an agreement was made to sell electricity cheaply to Kaiser for 30 years during which period the World Bank and other investors would get their money back.

The exploitation of Ghana's bauxite deposits was shelved. VALCO would bring alumina from Jamaica to be processed into aluminium in Ghana. The irrigation scheme was shelved.

We have not done well in this area since he left. We should do what is necessary and feasible to achieve the essential objective.

This is the time for realistic appraisal, not disingenuous maneuverings. It is human to make mistakes. But those who advise on vital national issues should not make the government cause financial loss to the state.

The Graphic returned to the matter in its editorial of Wednesday, March 21, 2007. The seriousness of the situation was stressed and the nation was asked not to regard the energy crisis as a threat but as a challenge.

The Graphic also advised us that this is “not the time to find scapegoats or pass blame on who should have done what.”

The challenge cannot be met by finding scapegoats. But some who should know were engaged and paid to keep electricity flowing.

Was the dam properly maintained? Were there no signs of falling water level for a long time and if so what was done? Was our distribution network efficient and economically justified?

Those in charge must answer these questions so that we do not make the same mistakes all the time. Those who advised or were involved in major decisions such as buying VALCO, however, have a more serious charge to answer.

They have to show that they have not through incompetent analysis and appraisal caused distress and financial loss to the state.