Why BXC Lost ECG Bid

Details are emerging as to why the Chinese company, BXC Ghana failed to win the bid to manage the Electricity Company of Ghana (ECG).

Outgoing US Ambassador to Ghana, Robert P. Jackson, in an answer to a question posed by Editor of DAILY GUIDE, Fortune Alimi recently, debunked reports that the US government was not comfortable working with a Chinese company.

BXC Ghana Limited, a subsidiary of Xiaocheng Electronic Technology Stock Co. Limited, which is a major contractor in Ghana implementing the network improvement project to expand the ECG distribution grid and remove overloads, was one of the two short-listed companies.

But Manila Electric Company (MERALCO) from the Philippines finally won the bid to manage ECG.

After MERALCO was declared winner, there were reports that BXC Ghana failed to win the bid because the US Government was not comfortable with the Chinese firm.

BXC Ghana Limited, the Ambassador noted, has since gone to court over its disqualification.

The Millennium Development Authority (MiDA) earlier this year confirmed that legal action had been taken against them.

Director of Communication and Outreach at MiDA, in a statement, indicated that “MiDA wishes to confirm that it has been served with a writ of summons by the BXC Consortium.”

Lack of Transparency
But Ambassador Jackson insisted that the Chinese company was primarily disqualified because of the lack of transparency on its part.

Mr Jackson stated that “So let me clarify to this extent; the Chinese Company failed to disclose that it was working with ECG and that it extended its work with ECG in the past which my (US) Government regarded as conflict of interest.”

According to him, “So we made the people involved in the selection process aware of our concern about conflict of interest.”

Mr. Jackson argued that MERALCO, the company from the Philippines, was selected based on merits.

BUSINESS GUIDE understands MERALCO is the largest private sector electricity distribution company in the Philippines covering 36 cities and 75 municipalities, including Metro Manila.

The company, which is said to be about 115 years old, is also believed to be serving 6.3 million customers in a franchise area covering 9,685 km², that includes the core of the Asian nation's industrial, commercial and population centers.

He stated that the US Government has had healthy working relationship with several Chinese companies, especially in the telecommunications sector, noting that the US is against those that fail to act transparently.

The Ambassador explained that “But I want to make it clear; we have no problem working with a Chinese company; it's not because it's a Chinese company but it's because of the conflict of interest situation that existed.”

“A lot of Chinese companies are working in the US. We are pleased to work with Chinese companies when they operate transparently.

Privatization
The move to allow private participation in the running of ECG forms part of five activities under the ECG Financial and Operational Turnaround project of the Ghana Power Compact Programme.

Minimizing Waste
The Ambassador also spoke of plans to minimize the current revenue losses at ECG, nothing that the electricity company was losing a whopping $8 million weekly.

He said “at present, ECG is not only losing $8 million a week, part of that is due to the fact that it only collects approximately 65 percent of what it bills.”

“ECG loses 24 percent of electricity it produces before it reaches houses and businesses.”

According to him, “Moving to more prepaid meters which the Millennium Challenge Corporation (MCC) will be financing and the Millennium Development Authority (MiDA) will be procuring will help with the collection issue.”

“We are confident that with the new infrastructure, new lines, new substations the loss of power produced would go below 10 percent, the additional 14 percent of energy will also help to make the company more profitable.”

By Melvin Tarlue