The public is likely to pay more in taxes well into the future, should the existing problems of non-transparency and politics which shroud power purchasing Agreements remain unsolved.
Challenges within the Energy Sector continue to mount up as financial losses to the State compound- poor negotiations, corruption, mismanagement and embezzlement have been identified over the years as elements mostly uncovered in contracts within the energy sector.
Meanwhile, in all of these, the tax payer is the one upon whom the burden is shifted, to pay in new taxes and re-engineering of existing tax rates.
More or less like a ‘payback’, new administrations also uncover flaws with contracts entered by previous governments and this continues on and on. While there may be some genuineness to the issues, they turn out to be a series of unendingly worrying events (going in circles, and never achieving anything).
Sadly, the ordinary Ghanaian is caught up in the quicksand, firstly, not understanding what the issue really is about due to scanty information available and ultimately, having to bear the cost of the use of tax payers’ money in more taxes.
With no doubt at all, the government is working out some tax calculations, ‘subconsciously’ to transfer the burden on the ordinary Ghanaian in either additional levies or increment of existing ones.
It has almost become a norm that successive governments identify and reveal the flaws in power agreements, but only to keep mute about contracts entered during their tenure, which are consequently uncovered in successive governments.
Happenings of such nature are far from sparse. The latest is a judgment debt to the tune of US$170 million including interests to Ghana Power Generation Company Limited, an Independent Power Producer, over the premature termination of a contract signed by the government.
Other power contracts carry same problems
Indicatively, the total amount liable for payment includes a U$134.35 million which represents the early termination payment claim, and is made up of US $69.36 million as premature termination fee, US$58.49 million for mobilisation costs, US$6.46 million as demobilisation cost and US$32,448 as preservation and maintenance cost.
Additionally, US$614,353.86 against the country as the cost of the trial that ensued between the government and GPGC, and costs of US$3 million against Ghana, being the legal fees by the GPGC during the arbitration.
Without exaggeration, it appears that such liabilities borne by the government recur every complete tenure of existing governments. And essentially, these have been the case under the two major political parties- NDC and NPP who have been at the helm of affairs of the country for more than two decades.
According to an ACET publication in March 2021, Ghana has 32 Power Purchasing Agreements ongoing for the provision of electricity generation. Some of which have been contracted by the Electricity Company of Ghana (ECG), Volta River Authority (VRA) as well as the Energy Ministry.
Consequently, most of these contracts were agreed on a take-or-pay basis, meaning that the government will have to pay for the generation capacity even where no electricity is consumed.
Like the recently squashed power contract, most of these contracts have been entered almost on the grounds of non-transparency, as though confidential. The only publicly-disclosed information on these PPAs are the names of the project, contract type, technology/fuel, location, and total project cost.
Hardly, can any thorough examination be made with this kind of information. It is for this reason that probity and accountability is skewed only at the assumption of office of new administrations. This trend should not be tolerated any longer, as it evidently has caused the country millions of dollars- escalating debt crisis, draining public funds, and increasing already burdensome taxes.
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