The Electricity Company of Ghana (ECG) has commenced disconnecting consumers nationwide who have failed to pay their electricity bills, News Ghana reported on Tuesday.
ECG to retrieve debts
According to media, the total debt owed to ECG amounts to GHC1.6 billion ($509 million) with government currently owing the electricity company GHC950 million ($242 million).
Private consumers are indebted by a total of GH¢650 million ($166 million) to the state power distributor.
In earlier news, director of the Millennium Development Authority (MiDA), Mawuli Rockson, announced the decision to franchise the Electricity Company of Ghana (ECG).
This move to recoup debts, coupled with privatisation of the company, is necessary to ensure its commercial viability.
The general secretary of the Public Utilities Workers Union, Ato Bondzie Quaye, who was speaking to the media, said the outstanding debts are crippling their operations, and that “the outstanding debts coupled with the continuous consumption of power by government ministries, agencies and departments and other institutions are seriously affecting the revenue generation of the company,” News Ghana reported.
Quaye added that as a trading concern, the fact that about 40% of their monthly billings are constantly not paid by these high consumers is aggravating the financial crisis of the company.
“As workers, we have exercised a lot of restraint and caution but have come to the realisation that some drastic action needs to be taken to resolve this matter once and for all. Accordingly, we urge all consumers to take note that we are going to embark on massive disconnection exercise beginning June 20 to claim our monies,” he said.
ECG heading for privatisation
According to Rockson, the move to franchise the company would provide the needed support and resources to revamp the power sector and end the energy crisis in the country.
However, since the announcement, employees at ECG have rejected private sector participation in the firm’s operations arguing that this will negatively affect local content as private sector would prefer to source cheaper materials from outside at the expense of the existing Ghanaian suppliers to maximise returns.
Nana Osei Bonsu, CEO of Ghanian non-profit organisation Private Enterprise Federation (PEF), said: “Under Compact II, ECG will not be privatised. All that it is going to happen is ECG’s mandate to distribute power will now be challenged by private sector businesses, which can also be empowered to deliver. This way, competition and efficiency will be brought into [the] power distribution [sector].
“And that is what compact II is all about. It will provide a room for private businesses to do what ECG is doing. And wherever there is competition there is efficiency, so the private sector is going to benefit because this will give them a choice.”