Our lead story yesterday went with the headline “ECG, NEDCo owe GRIDCo: GH¢2.7bn debt threatens power distribution …as govt takes steps to avoid disruption”.
The story briefly has it that two major power distribution companies in the country, the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo), owed the Ghana Grid Company (GRIDCo) GH¢ 2.7 billion.
GRIDCo provides metering and billing services to bulk customers like ECG and NEDCo; carries out transmission system planning; implements the necessary investments to provide the capacity to reliably transmit electric energy; and manages the Wholesale Power Market.
According to the story, the indebtedness of the two companies is impeding GRIDCo’s operations, especially in the areas of infrastructure development and efficiency and so the company is calling for a strategic way to deal with the indebtedness.
On record, GRIDCo, incorporated on December 15, 2006, is a private limited liability company under the Companies Code, 1963 (Act 179), whereas the ECG and NEDCO, a wholly owned VRA subsidiary, are public entities.
Considering the difference in ownership of the three entities, one wonders why public companies rather should owe a private one in the first place.
It is good news, though, to learn that the government is fully aware of the situation and has taken some steps to ensure that operations of GRIDCo are not disrupted.
What steps are the government taking which take precedence over paying off the debt?
We think the best option is to pay the debt, otherwise the unexpected may happen and engender all manner of destructive criticism against the government, which would not augur well for its image.
Industry, including small-scale enterprises like sole proprietorship, need power to run; denial of that power means curtailment of livelihoods with all the attendant ramifications.
This country has suffered power disruptions before and many can testify to the hardship and inconvenience the situation created for both industrial and domestic users of electricity.
We do not expect such unpleasant situation to repeat itself, so we encourage the government to do the needful and prevent a similar or probably even a worse one, taking into account the fact that more private individuals and industries are using electricity now than before to run their various economic activities.
We are not keen on going into what has or have caused the current indebtedness to GRIDCo but we can guess the causes include negligence, unbridled bureaucracy and some collusion somewhere.
The payment of the GRIDCo debt must be the urgent priority of those who must ensure it because apart from stabilising the operations of the company, it needs to use part of the amount to pay compensation to people who have released lands for it to expand its infrastructure and transmission lines.
For a country always touting the private sector as the engine of economic growth, Ghana must encourage the growth of private businesses, including GRIDCo, by avoiding acts that would cripple them such as the State owing them.
