Three state mining companies owe VRA ¢97.6 billion
Three distressed state mines owe the Volta Rover Authority an outstanding balance of 97.6 billion old Ghana cedis as at 31, 12, 2005, Ms Alexander Toetoe, Deputy Chief Executive of the VRA said on Tuesday.
They are the Ghana Consolidated Diamond Limited which accounts for the ¢29, 802,087,965, Dunkwa Cont Goldfields owes about ¢1, 703,901,035 and Prestea Gold Resources has a debt of ¢66, 180, 835,475, Ms. Toetoe mentioned these at the opening of public hearing of the Public Accounts Committee of Parliament.
The committee is examining the performance of the VRA, Electricity Company of Ghana, Public Utility Regulatory Commission, and Bulk Oil Storage and Transportation Company Limited based on the reports of the Auditor General’s on public accounts of boards, corporations and other statutory institutions for the years ended 2004 and 2005.
Ms. Toetoe said as at February 28, 2006, 12 out of a total of 22 customers, who were supplied power by the Authority, had overdue balance totalling 1, 450.86 billion old Ghana cedis.
She said the overdue amount of the 1, 450.86 billion included an amount of 1,094.47 receivables from the Electricity Company of Ghana was being handled under the arrangement with the government.
Mr. Kwaku Awotwe Acting Chief Executive Officer of VRA, said government also owes the company an amount of GH¢250 million which includes an amount of 46 million dollars for Vodacom as part of the sale of Vodafone.
He said income statement for 2004 and 2003 showed an operating profit transformed into a net loss of 43.05 billion after charging exchange fluctuations on foreign debt of 275.52 billion (2003; 334 billion) and loan interest and commitment charges of 208.68 billion (2003;89.26 billion).
On distribution losses, Mr. Awotwe noted that power purchased and sold during the year showed a loss of 30.27 per cent a figure which was far above the industry approved loss of 21 per cent.
He said out of a total of 334, 937,204 kwh, resulting in a loss of 145, 386,057 kwh or 79,859,691,675 in financial terms.
Mr. Awotwe said VRA needed a 100 per cent tariff increase in order to recover its losses, adding that proposal had been submitted to the Public Utility and Regulatory Agency for approval.
When asked why paying customers would have to be taxed through tariff increment because of non-paying customers, he said the cedi had been devalued against the dollar and crude oil prizes and exchange rates were the determinants of the company’s electricity rates.
Asked by Mr. Albert Kan Dapaah, who chaired the committee, if it was not better to reduce technical and commercial losses instead of increasing tariff, Mr. Awotwe said even if it was reduced from the current 18 per cent to eight per cent, there will be the need to increase the tariffs.
On financial position of VRA, he said total fixed assets rose from 20,616.12 billion in 2003 to 25, 176.5 billion in 2004, recording an increase of 22.1 per cent.
This he said was largely due to additions to property, plant and equipment as well as long-term investments.
He said current assets decreased by 11.4 per cent from 2,082.2 billion in 2002 to 1, 88.28 billion in 2004 mainly from power sales debtors.
According to him, over 80 customers were facing trial for their involvement in power theft between January and April 2005.
He said system upgrade was in progress to rehabilitate exiting distribution network to address the technical losses.
For commercial losses, management of the Northern Electricity Division had formed Loss Control Gangs to monitor and apprehend power theft culprits.
He said prepayment metering programme was the best to minimize the losses adding, the company would speed up its prepaid meter installation project in the cities and major towns.
Asked whether the company would make any headway in the future in the face of these losses, Mr. Awotwe said reduction of technical and commercial losses was important and the company was looking up to adopting the best operating practices.
He said VRA has great potential so that if well managed would transmit power to other countries in the Sub Saharan Africa.
He said the current situation was cumulative poor results of the last 45 years.
Mr. Emmanuel Buah, Deputy Minister said the Ministries, Departments and Agencies would also be given metres to pay for electricity services.