It is all very easy to criticise the situation and I will agree with you if there seems to be some sense of despondency somewhere with utility services. There is no doubt about that. But has anyone actually done an introspection?
lets get the situation in proper perspective.
The utilities ( water, electricity in particular) are regulated in terms of how much they can charge as direct operators. what has happened for all these years right from inception is that there has always been a limitation of what the utilities can charge their customers.
Point one - not all who complain are actually customers of the utilities - consumers we all are but customers we may not be!! but we all bear the brunt of the poor services if they so occur
Point two - apart from petrol ( which is to some extent regulated) and salaries, everything local that is used is subject to commercial and market forces - cement, vehicles (taxes & duties are paid by the way), steel rods, operating chemicals and all other local supplies. The worse thing is that most of these are imported as a result of the long known collapse of Ghana manufacturing - although to some extent AGI is also trying but what do we see - our manufacturing and industry is generally geared towards export market to the extent that the better products are sent out quite often for foreign exchange
Point Three - in the utility business, goods are not sold according to your poverty level or otherwise - you pay for what you get money for.... in much the same way, you can only order what you are sure you can raise money for. Forget the crude oil or gas - even with credit lines we are talking 32 ( Three two) million dollars a month just to buy crude oil for Aboadze plant. forget the other thermal plants that also run on crude oil and those in Tema that run on Diesel. Guess what, at current tariffs, the maximum bill from say VRA to ECG is about US$24-27 million equivalent. so even with spares, paying workers etc there is a shortfall right there that must be plugged. before I go to Point Four, let me point out that the hole that must be plugged usually must come from GoG as owner of the utilities
Point Four - consumers dont generally like to hear of tariff increases right from Nkrumah days to now. a) in Nkrumah days the machines were new at Akosombo and just a few towns had isolated diesel generating stations that operated for limited hours (usually evenings). so like a new car, it was just regular servicing that did the trick. b) over the years, the machines aged beautifully, the network was expanded, our towns got bigger, more people migrated to the big towns, we started SHEP ( Self Help Electrification Programme), we managed to get Valco to pay more but even there Valco which was consuming 3241GWh per year had to progressively scale down as we could not justify additional plants because we did not have the ability to pay back directly without support from GoG. The Ghana load conversely also grew and soon domestic demand excluding Valco and the Mines took up more than 60% of the demand profile. what did we see at both the generation and distribution ends? poor payers for services. consumers resisted paying more and either linked any payment at higher tariffs to salary increases and affordability, ECG also paid less to VRA because of their own problems which had been exacerbated with teh genuine problem of poor customer rendering of responsibility. No Government has liked the idea of getting unpopular because of tariffs and that is wher point Five comes in
Point Five - to tray and redress the perennial revenue issues, a number of initiatives were tackled - the Cross Debt Clearing House under which all the stakeholders met periodically to reconcile their indebtedness to each other - say VRA is given support by GoG to buy crude oil, that is logged, ECG buys power from VRA and is not paying all, thet is flagged, Ghana Water is not paying ECG so ECG is not paying VRA is also flagged etc at the end of the day, the net debtor picks up the flak. Whilst this was good for some time, it was not comprehensively addressing the problem so the Power Sector Reform programme was initiated in part because GoG (in the early 1990s) and the utilities were hemorrhaging and needed some new spice to (at the core of it all) bring a commercial attitude devoid of much governmental intervention because it had been proven that the utilities could largely operate without much direct interventions if their resource base was good. So in comes the PURC ( The public utilities regulatory commission) which was supposed to be 100% independent and subject to any authority in the performance of its duties. Guess what the stakeholders put on it generally represent interests ( consumers, industry, trades unions) that are more likely to be unfavourably inclined towards tariff increases so they have kept on hammering the efficiency issue so much that everybody believes that is the core problem. Anybody who has actually gone into the utilities would bear testimony that but for our fine crop of staff, the Ghana utilities would have collapsed a long time ago. Efficiency is to some simply painting what is bad and getting it to work no matter what. but I tell you the truth is that the frame that is not good cannot support the heavy curtain of debt if you were to treat that as a garment of governance
Point Six - In spite of the difficulties, Ghanaman loves his tinted glass house with the burglar proof inside even if he has no air-conditioning - so we sweat under our own pleasures!! My point is that, once we make our choices for taste, we must be reciprocal in determining the responsibilty for paying for it. The answer I would say decidedly is NOT to privatise (and it does not matter whether it is to a Ghanaian or Expatriate person or company that we privatise) as some would be shouting but to commercialise and allo management to do its job and meet set targets. Amanfour, as you will see, anybody who has been on the seat will tell you that shouting from the sidelines is not the same as being there on the pitch and coaching - indeed, when it comes to teh utility business, quite often the conjectures come from people with no clue as to the core of the problem.
Point Seven - we should be thankful that the system has not been collapsing frequently. we must be grateful for the little our boys and girls are doing to keep Ghana illuminated.. I wont compare Ghana to any country, we are simply not at the best level but certainly not until consumers get it into themselves to agree to support the utilities by removeing all avenues of excuse, the problem wont go away, Remember, if the utilities need 10 Ghana Cedis to do a job and they are denied this revenue wise with a 3% tariff increase (say 4 Ghana Cedis) instead of say an 8%, what we do is force them to borrow the remaining 6 Ghana Cedis.. at the end of the year at 20 percent interest, teh hole is actually bigger and they will come back now looking for 15% tariff increase and the longer this delays, the more deeper the hole we dig.. and GoG to prevent financial collapse steps in with money that could have and should go to Education, Health and other social services - we are our won enemies because at the end of its tenure - GoG begins to panic and gives fodder to the parties opposite to make their case and when they also come in - the repeat the same wahala and the cycle begins for us.
Point Eight - the demand for utility services is so great that Accra alone has practically gone beyond double capacity since 2002 when a brand new substation was opened at Mallam to take up part of the load at the Achimota substation right on the Dzorwulu rail crossing. A third one is being built near Adjiringanor and I wont be surprised that this could become overloaded in a few years. the morale of this latter story is that, despite such interventions - there are still many parts of Accra that are still UNserved and many parts that are UNDERserved. All that is money.
This is not about politics.. IT is about understanding the subject matter and tackling it from the core.. This business of our GOvernment has done this or that and the other government did not do that will be an unending cycle that we would need to put an end to. It is better in my book to underpromise and overdeliver than plenty talk.
Let us allow the utilities the space to work. Let me end my long piece by telling you the story of kerosene!! Kerosen has other applications including the fact that it a good substitute for diesel.. For many years, Kero was always in short supply in villages and towns and a beer bottle (1 pint) was more expensive than the actual gallon price PLUS IT WAS STILL NOT available readily.. so whenever we went to the village we would call and make small arragements to carry 2 or three gallons along to help our elders back at home. so we said, look, lets look at public policy issues here - whet should be our priority - cheap kero that does not reach the target folks or kero that was available that was not hoarded - that they could purchase on demand? the response was overwhelmingly the latter and that was what was done a few years ago when kero price was almost equated to that of Diesel by removing the subsidy - overnight there was kero everywhere in Ghana.
It takes good public policy to make good policies. Lets take advantage of the opportunity and play less politics and playing to the gallery with unwarranted consumer pandering. Indeed the consumer will always thank you if he will be assured of power on all the time rather than cheap but erratic supply.. afterall, if he needs it so badly, his reaction is to purchase he own stand-by generator - gosh, what an irony. we take decisions that sometimes smack our own faces
Thank you. No one needs to be fired..the shot you call is the shot that will be put in the gun!! just make sure it is not fired whilst you are still loading it.
Bla Elik.
At 18:03 19/04/2010, BG wrote:
I guess if former governments (NDC1 and NPP) had any foresight or vision, Ghanaians would have been spared these power outages. NDC 1 failed to replace these old lines. Can you tell us whether or not NPP instituted any culture of maintaining anything during their 8-years of you-know-which/what rule? I hate to politicize this, but I guess the culture to maintain infrastructure was equally lost on the NPP as well. Now, we can conveniently blame the Mills government for these faulty lines and outages. I am sure if these faulty lines were discovered during the NPP rule, you will be here blaming NDC 1 for all the woes of Ghana. We have learned to live with your tantrums or, as you love to put it yourself, "telling it as it is". I go dieoooooooooooooooo.
In any case, I support the residents to file a consumer class action against the ECG. Why should it take them one year to repair these lines? Can someone who knows more than I do - which is basically turning on and off a switch to have light around me - tell me the reasons why it will take so long to replace the cables? Is it lack of manpower? As is typical these days, I call on the president to fire the Director of Operations at least for the reason that "we have to drop people off and this was not planned so it was difficult to announce it". So, there is no way of knowing when the load will "go high" and warn the consumers ahead of that time? It is time to "expatriate" - I go dieoooooo - a white man to take up his job to see if there will be a change. Now, I am sure I am tired.
BG
It Takes Courage to Stand Alone. ~ Anon
A wise man proportions his belief to the evidence. ~ David Hume
Life isn't about how to survive the storm, but how to dance in the rain. ~ Anon
What you think you create, What you feel you attract, What you imagine you become. ~ Anon
--- On Mon, 4/19/10, Yaw A; wrote:
- From: Yaw A.........@hotmail.com;
- Subject: A Better Ghana: Erratic power outages to last for a year
- To: okyeame@googlegroups.com
- Date: Monday, April 19, 2010, 1:25 PM
- The erratic power supplies which has been the signature piece of achievement under Atta Mills run government, will last a year. I am prepared to go on record it will last till the end of the Mills era, we even have a choice we can extend it for another 4 years.
- How can such an essential utility be treated with such pedestrian contempt. In some countries this would be a call for the national guard and a state of emergency.
- Nanayaw
- *********************************
- The Electricity Company of Ghana says the current erratic power supplies being experienced in parts of Accra would continue for at a least a year.
- Residents have complained about the unpredictable nature of power supply, worsened lately as a result of repair works.
- Whilst some complain of blown-up household appliances resulting from power surges, others say current levels are so low they cannot power high-energy machines. Play audio
- Officials of ECG tell Joy News residents in eastern Accra have been particularly affected because of a series of faults on the main line that serves them.
- Director of Operations at ECG, Tetteh Okine, said the company has lost up to 85 megawatts of electricity as a result of the faults.
- "So when the load goes high, we have to drop people off and this was not planned so it was difficult to announce it," he said.
- According to him, the ECG will, during the period, replace cables and also upgrade its systems.
- Mr Tetteh Okine also explains that another major phase of the project would involve the replacement of faulty cables.
- Source: Myjoyonline.com/Ghana
- --
- Posted on Okyeame - Talking about Ghana since 1990.
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