This is an abuse of trust’- PUWU-TUC slams gov’t over ECG privatisation plans – Life Pulse Daily

Introduction

The debate over the future of Ghana’s power distribution sector has reached a fever pitch following strong condemnation from organized labor. The Public Utilities Workers’ Union (PUWU), under the Trades Union Congress (TUC), has publicly criticized the government’s renewed push for private sector participation in the Electricity Company of Ghana (ECG). In a recent interview, PUWU General Secretary Timothy Nyame described the move as an “abuse of trust,” arguing that the state-owned utility is currently undergoing a successful turnaround that is being undermined by premature privatization efforts. This article analyzes the union’s objections, the current performance of the ECG, and the broader implications for Ghana’s energy sector.

Key Points

Background

The Electricity Company of Ghana (ECG) has long been a focal point of Ghana’s energy sector reforms. As the primary distributor of electricity across the country, its operational efficiency is critical to national economic stability. Over the years, the ECG has faced numerous challenges, including financial distress, high technical and commercial losses, and aging infrastructure. These challenges prompted the government to consider various forms of private sector participation (PSP) to inject capital, improve management, and enhance service delivery.

Historically, discussions regarding the ECG’s structure have been contentious. The Power Distribution Services (PDS) scandal in 2019, which involved the temporary concession of ECG’s assets to a private consortium, left deep scars on the relationship between the government, workers, and the public. Following the collapse of the PDS agreement, the government assured stakeholders that any future private involvement would be structured differently. It is against this backdrop of broken trust and the desire for a home-grown solution that the current standoff is occurring. The government has recently signaled a return to plans for private investment, citing the need to accelerate the company’s modernization and financial independence.

Analysis

The Union’s Argument: A Betrayal of Trust

At the heart of PUWU’s grievance is the sentiment that the government is reneging on a deal. Timothy Nyame, the General Secretary, emphasized that the union and the government had previously agreed on a roadmap to revitalize the ECG without necessarily resorting to full privatization. The union believes that the current administration is deviating from the “spirit and letter” of these agreements.

When Nyame states, “This is an abuse of trust,” he is referring to the government’s perceived lack of faith in the current management and staff of the ECG. The union argues that the workforce has demonstrated its capacity to turn the company around when given the necessary support and autonomy. By pushing for private sector participation (PSP) despite these efforts, the government is effectively signaling that it does not trust the Ghanaian experts currently running the utility.

Is the ECG Actually Turning Around?

A central pillar of the union’s defense is the claim that the ECG is already recording a “transparent turnaround.” Mr. Nyame pointed to specific metrics to back this claim:

• Reduced System Losses: The union claims that technical and commercial losses have dropped by approximately 3 percentage points. In the energy sector, reducing losses is a direct route to improved financial health, as it means less unbilled energy and better revenue collection.
• Improved Payments to IPPs: One of the major stress points in Ghana’s energy sector is the “Dumsor” (load shedding) cycle, often exacerbated by the inability to pay Independent Power Producers (IPPs). The ECG’s ability to improve payments suggests better cash flow management and operational discipline.
• Operational Efficiency: The reference to “efficient software solutions” likely alludes to the ECG’s ongoing digitization projects, such as the prepaid metering expansion and mobile money payment platforms, which have streamlined revenue collection.

From the union’s perspective, these metrics prove that the company is viable and capable of self-repair. They argue that identifying the problems—which they estimate as “50% of the solution”—has already been done, and the current management is executing the fix.

The Government’s Likely Perspective

While the union’s position is clear, the government’s rationale for pursuing private sector participation typically revolves around three factors: capital injection, technical expertise, and operational agility. State-owned enterprises (SOEs) often struggle with bureaucratic bottlenecks and limited access to the capital markets needed for massive infrastructure upgrades. The government might argue that while the current improvements are positive, they are not happening fast enough to meet the country’s developmental needs or to resolve the debt overhang in the energy sector. However, the union counters this by questioning the logic of bringing in private investors when the current trajectory is already positive.

Practical Advice

For Policymakers and Stakeholders

To bridge the gap between the government’s desire for private capital and the union’s demand for national control, stakeholders should consider a hybrid approach. A transparent, data-driven dialogue is essential. Policymakers should:

• Share the Data: Publicly release the financial models and impact assessments that justify the need for private participation. If the ECG is indeed improving, the government must explain why the current model is insufficient.
• Engage in Social Dialogue: Re-establish the “tripartite” committee involving the government, the union, and employers to negotiate a consensus-based path forward, rather than a unilateral decision.
• Consider Strategic Partnerships over Full Privatisation: Instead of a full sale or concession, options like minority equity stakes or technical partnerships could allow for capital injection while retaining national oversight.

For Consumers and the Public

Consumers remain the ultimate beneficiaries or victims of these decisions. It is practical for the public to:

• Stay Informed: Monitor the debate to understand how potential changes might affect tariffs and service reliability.
• Support Accountability: Demand that any private partnership includes strict performance indicators (KPIs) regarding service delivery and consumer rights protection.

FAQ

Conclusion

The clash between the Public Utilities Workers’ Union and the government over ECG privatisation plans highlights a fundamental disagreement on the best path forward for Ghana’s energy sector. PUWU’s characterization of the government’s move as an “abuse of trust” underscores the deep skepticism regarding private involvement, especially given the union’s belief that the ECG is already performing better under current management. While the government sees private capital as a necessary catalyst for growth, the workers see it as a threat to national sovereignty and a betrayal of recent agreements. Ultimately, resolving this impasse will require not just economic arguments, but a rebuilding of trust between the state, its workers, and the public it serves.