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ECG loses 26.6% of purchased power

ElectricityThe Electricity Company of Ghana (ECG) lost 26.6 per cent of power it purchased from the Volta River Authority for distribution to its customers in 2011, in the midst of an imminent increase in electricity consumption cost, the Auditor-General has revealed.

The total losses translated into a whopping GH¢478.88 million, since every one per cent of system loss incurred by the company cost GH¢17.74 million.

Although the losses were described as technical and commercial, the company could not establish which percentage constituted technical or commercial.

These came up at the ongoing public sitting of the Public Accounts Committee (PAC) of Parliament when the  committee started dealing with the 2010 and 2011 reports of the Auditor-General on the Public Accounts of Ghana on Public Boards, Corporations and other Statutory Institutions.

The 2011 report showed that as a result of the losses, the ECG was deprived of potential revenue from the sale of electricity for the year under review prompting the Auditor-General to recommend that measures should be put in place to reduce and control system losses, be they technical or commercial.

At the sitting to answer questions from members of the PAC were a Deputy Minister of Energy and Petroleum, Mr John Jinapor, and the Managing Director of the company, Mr William Hutton-Mensah, among other officials of the ministry.

The report also said ECG’s inability to bill over 100,000 customers connected under the Self-Help Electrification Programme (SHEP) as a result of the lack of coordination between China Water Limited and ECG contributed greatly to the system losses.

In addition, the inability of the company to account for all energy consumption by prepaid metering costumers further accounted for the system losses by the company.

Answering questions, however, Mr Jinapor explained that as a result of resistance and the use of conductors in the transmission of electricity, system losses were bound to occur.

He stated, however, that efforts were being made to curb commercial losses through the replacement of post-paid meters in all ministries, departments and agencies, as well as selected areas in the country.

It was also revealed at the sitting that the ECG undertook some projects for the government for which payments in respect of materials supplied to the tune of GH¢688,854 had still not been made by the Ministry of Energy.

Other issues which came up were the debit of a total of GH¢92,419.58 from the GCB No 2 Accounts of ECG which could not be identified with any transaction in 2005 and 2007 in addition to the payment of the cost of 44 air conditioners to GHAMERICO Limited although the company installed 40 air conditioners.

Even though, the Managing Director of ECG, Mr Hutson-Mensah, conceded that that should not have happened, it was later explained that the company had installed the remaining four of the air conditioners.

The Auditor-General noted in its report that  the ECG Call Account with the JP Morgan Chase Bank had a balance of $21,313.40 which had been dormant since 2005 while bank statements made available did not show the address of the branch where the account was maintained.

It recommended that management should establish the existence of this bank account in order to safeguard the limited funds of the company.

The report also queried the ECG on an issue in which the Dodowa Rural Bank had failed to transfer ECG collections deposited with the bank amounting to GH¢296,263 to the Prudential Bank contrary to an agreement reached since September, 2010.

The explanation offered by Mr Hutton-Mensah that the Dodowa Rural Bank was now paying the amount in a monthly instalment of GH¢19,000 did not go down well with members of the committee, who urged the ECG to collect interest on the original amount deposited with the  bank.

When officials of the Ministry of Energy in charge of the National Electrification Project appeared before the committee, it was revealed that the project’s total expenditure for 2010 amounted to GH¢398,142,324 compared with the GH¢162,283,776 expended in 2009, registering an increase of 145.3 per cent.

Direct project expenditure went up by 145.0 per cent from GH¢161,460,724 in 2009 to GH¢395,593,846 in 2010.

The project expenditure was made up mainly of contract payments – GH¢391,768,948, consultancy fees – GH¢529,291, projects supervision – GH¢638,207, haulage – GH¢2,431,455 and motor vehicle depreciation – GH¢225,945.

Mr Jinapor explained that the huge difference between the 2009 figures and the 2010 figures was as a result of the implementation of more SHEP projects in 2010.

He stated that while in 2009 226 communities were hooked to the national grid under the programme, as many as 678 communities benefited from the programme in 2010.

When it got to the turn of the National Petroleum Agency (NPA), the Director in charge of Unified Petroleum, Mr Jacob Amoah, stood in for the Chief Executive Officer, Mr Alex Mould.

During the discussions, it came up that  the authority had departed from the norm and was now granting licences to companies to set up filling stations close to borders of the country, thereby encouraging the smuggling of petroleum commodities to neighbouring countries.

Source: Daily Graphic

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