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Strong opposition over proposal to list VRA, GRICo on GSE
Delivering his maiden State of the Nation Address (SONA) last week, President Nana Akufo-Addo announced that the move will enable his administration to fix the almost five-year power crisis and clear the sector’s “heavy indebtedness.”
His administration, he said, inherited “a heavily indebted energy sector, with the net debt reaching $2.4 billion,” from his predecessor, John Mahama.
But the president’s decision has been described as “unfortunate” and “bad idea” by people with vast knowledge in the sector.
Kwabena Donkor, the Former Minister of Energy under the Mahama administration held that the president’s advisers on Energy are doing this country a “disfavour.”
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“To consider listing GRIDCo on the stock exchange will be most unfortunate. Whoever is advising the government will be doing the country a disfavour,” he said on Accra-based Citi FM. “GRIDCo is the nerve centre of the power system. GRIDCo is the brain and is profitable. GRIDCo is a limited liability company owned solely by the state. It has recorded profits in the last couple of years and so why would you put your brain on the stock exchange.”
He further argued that “GRIDCo is not only a commercial entity,” but a strategic national installation.
A financial analyst, Sydney Casely Hayford, in a panel broadcast also held that listing the two companies on the stock exchange will give the private sector significant influence in the country’s energy sector.
He explained on Citi FM “The Big Issue” that the private sector is driven by profit and will not accept a policy to cap their tariffs.
He said:“I really think it’s a bad idea because you are going to give the private sector the opportunity to shut you down. [The]Private sector will not accept that their tariffs are capped and it’s an unprofitable cap. If it is going to work at it has to be calculated in a such a way that the cap will make them profitable and that they will achieve profitability from cost savings and not from raising the cap. So the minute you give them the restriction of making losses…they will shut the system down and walk away.”
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“As we speak, the government owes VRA plenty money. VRA owes GRIDCo. GRIDco is owed by ECG. The public does not owe ECG; they have been paying their tariffs without fail except that in this instance government is subsidising the tariff in order to be able to carry on what it considers to be an affordable rate for the public to pay,” he added.
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