A ruling by the International Court of Arbitration ordering the government to Ghana to pay to “GPGC the full value of the Early Termination Payment, together with Mobilisation, Demobilization and preservation and maintenance costs” is quite disconcerting, to say the least.
In effect, the International Court of Arbitration has awarded a cost of US$134 million and an interest of US$30 million against the Government of Ghana over the cancellation of an Emergency Power Agreement with GCGP limited.
It is recalled that a former Energy Minister, Boakye Agyarko, canceled the contract on the basis that the country did not need the power agreements.
According to another former Power Minister in the Mahama administration and Member of Parliament for Pru East, Dr Kwabena Donkor, the cancellation of the agreement was unnecessary. He believes the country handled the whole issue wrongly.
It is not the aim of this Paper to knock heads but the fact that the country is embroiled in such a matter is of grave concern to the citizenry since we confer power on duty bearers to seek the best interest of the country.
However, when the country is facing such austere moments given the fact that we have been battling an unknown virus that is taking a toll on economic life, the least the citizenry would want to hear is that the country has been slapped with a judgement debt.
Additionally, Minister designate for Energy, Dr. Mattew Opoku Prempeh told Parliament’s Appointment Committee that the country’s energy sector debt may rise to 12.5 billion dollars by 2023 if concrete steps are not taken to address the losses within the electricity sector.
Dr. Mattew Opoku-Prempeh noted that the debt poses a challenge to the economy since the Electricity Company of Ghana cannot collect all the money for the electricity it sells. The Minister designate will have to muster all his negotiating skills in the ongoing renegotiation of power contracts with Independent Power Producers.
Renegotiation of the power deals began in 2019, however, none have agreed to stop charging the government for energy it does not consume. The cost of this excess power is reckoned to cost the nation US$500 million every year.
Obviously, this cannot be sustained and it is within the purview of government to renegotiate these power deals to be truly cost-effective. That is why the ruling has added to the country’s woes.