Chief Executive of the Chamber of Independent Power Producers and Bulk Consumers Elikplim Kwabla Apetorgbor, has stated that the former manager of the Electricity Company of Ghana, Power Distribution Services (PDS) Limited significantly reduced the cost of operations of the electricity distributor,
Mr. Apetorgbor stated that records and reports have shown that PDS had significantly reduced ECG’s cost of operations – direct costs and other avoidable costs.
The move he added led to its revenue maximisation at the time, adding “for a fact, they [PDS] were raking in about 98% of invoices.
He was speaking at a forum organised by the Institute of Economic Affairs on “What does Ghana Stand to Gain from PPA Transparency”.
“Most importantly, there is the need for a thorough investigation of what is called commercial losses on ECG’s book. This is now reported by the Energy Minister to be about 30%. How did it come about?”
He said, “my study revealed that this economic or commercial gap for which the government is continuously borrowing to fund via a special purpose vehicle – Delta Fund, is largely due to an unsustainable and unjustifiable business or commercial model being implemented by ECG to some of its bulk customers.”
He said the ECG sells power to some of its big bulk customers that represent about 25% of its customer base at a price lower than its purchase and cost price from the power generators.
“With this unsound business model, the revenue gap or shortfall can never be closed, even if all PPAs are converted to take and pay”, he added.
“If transparency, as we understand is important… “then ECG needs public enquiry in cost engineering and transaction cost analysis.”
By: Rainbowradioonline.com/Ghana