Even though Meralco Consortium led by the Manila Electricity Company of the Philippines has been selected by the Millennium Development Authority (MiDA) to manage the state-owned power provider, Electricity Company of Ghana (ECG), under the Power Compact II agreement, it has emerged that the government of Ghana reserves the right to accept or reject.
The revelation is according to persons close to the deal. It is suggested that, the selection of the concessionaire is not automatic that, the company will begin operations but they are to engage the government, who will access them and make sure that they meet and can go by certain standards set before they can begin operations.
This came to light after, MiDa said in a statement on Thursday, April 19 stated that Meralco Consortium is known to have the highest combined technical and financial score, to turn the fortunes of ECG and, has, therefore, been designated as the preferred bidder.
Meralco according to MiDa has a distribution network which covers a third of the Philippines and serves over six million customers and is said to have discharged their duties efficiently and remained a profitable business over the years.
The statement added “Negotiations will soon commence to finalise all the agreements related to the implementation of the ECG PSP Transaction.”
MiDA however “assures Ghanaians that it will continue to adhere to and uphold high standards of integrity and transparency throughout the process.”
The Meralco Consortium is led by the Manila Electricity Company (Meralco), a 115 year old privately owned company incorporated in the Philippines.
As to how MiDa settled on the current company, information available to the B&FT suggested that, BXC Company Limited and Meralco Consortium were the two bidders after the CH Group withdrew its bid.
Under the Power Compact, six projects will be implemented to address the root causes of the unavailability and unreliability of power in Ghana which are ECG Financial and Operational Turnaround Project, NEDCo Financial and Operational Turnaround Project, Regulatory Strengthening and Capacity Building Project, and Access Project.
With others being Power Generation Sector Improvement Project and Energy Efficiency, and Demand Side Management Project. The Government of Ghana signed the Ghana Power Compact with the Millennium Challenge Corporation (MCC), an independent United States government agency, on the sidelines of the US Africa Leaders’ Summit in Washington on August 5, 2014.
The Ghana Power Compact will provide Ghana with a grant sum of US$498,200,000 to improve the performance of Ghana’s power sector, unlock the country’s economic potential, create jobs, and reduce poverty.
About US$350 million of the grant is being invested in ECG to make the country’s power distributor operationally and financially efficient. The Compact is being implemented by the Government of Ghana through the Millennium Development Authority (MiDA).