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PDS must act swiftly to avert a power crisis!

botchway July 9, 2019

 

Six Independent Power Producers (IPPs), which currently supply about 1,500 megawatts of electricity, have threatened to shut down their plants if the Power Distribution Services (PDS) Limited fails to settle debts amounting to over $700 million within eight working days.

While acknowledging the negative impact a shutdown of the power plants will have, the Independent Power Producers insist they are left with no choice, since they cannot continue to be saddled with huge debts.

According to the IPPs, as at the time the Electricity Company of Ghana (ECG) was taken over by the PDS, they were owed over $400 million.

The Chronicle is apprehensive about the situation and would like to call on the PDS and relevant stakeholders in the power sector to urgently map out effective strategies to avert a possible power crisis, if the threat by the power producers is carried through.

We are worried to hear that ever since the PDS took over, it has not paid the power producers a pesewa, resulting in the accumulation of another debt of over $300 million, bringing the total to over $700 million.

The Chronicle cannot lose sight of the fact that the inaction of the PDS implies that the IPPs are saddled with huge debts to their creditors and suppliers, and are also challenged in paying the salaries of employees.

The Chronicle is aware that energy can neither be stored nor destroyed, which presupposes that consumers are paying for the power consumed, while the PDS is accumulating the revenues.

It for this reason that we are not the least enthused about the fact that the PDS appears to be reliving some of the very ‘bad’ contractual and business practices that characterised the operations of the ECG.

The Chronicle would, therefore, like to appeal to the government, through the Ministry of Energy, to compel PDS to clear the accumulated invoices presented by the IPPs, to forestall any crisis in the energy sector.

We, at The Chronicle, believe that it would not be out of place for the PDS to pay interest on all overdue invoices, which the IPPs could have profitably utilised.

We also urge the Millennium Development Authority (MiDA) to compel PDS to adhere to best business practices, and respect the terms of the PPAs and ensure the nation derives the optimum benefit from the concession arrangement.

In order to keep the nation running, we would humbly appeal to the IPPs that in the event that the PDS is unable to honour its obligations, they should consider the interest of the nation above all other gains, and accept any form of settlement that may be proposed by the PDS.

The Chronicle would further call on the Chamber of Independent Power Producers and Bulk Consumers (CIPDIB) to step up efforts at resolving the ‘energy standoff’ to keep nation’s wheel of development turning.

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