The Electricity Company of Ghana (ECG) has declared GH¢625.34 million as a bad and doubtful debt over three years spanning 2019 to 2021. In 2019, ECG made provision for GH¢58.51 million as bad and doubtful debt.
The figure shot up to GH¢276.50 million and GH¢290.33 million in 2020 and 2021 respectively.
These figures were contained in ECG’s 2022-2026 tariff proposals submitted to the Public Utilities Regulatory Commission (PURC) for consideration. “This is based on the company’s policy on provision for bad and doubtful debts,” ECG said.
It explained that the unrecoverable debt, comprising debt due to demolished structures, debt examined under the ECG’s debt recovery process, and fixed charge debt were due to long periods of disconnection.
“Majority of these bad debts emanate from demolished structures due to road constructions, relocation of slums, removal of temporary structures, illegal transfer and removal of meters by unscrupulous customers (mostly SHEP areas),” it explained.
Touching on the measures being adopted to minimise the bad and doubtful debts, ECG said it regularly engages Districts and Municipal Assemblies to ensure that information on demolishing exercises and road constructions, among others, are communicated to ECG in good time to avoid this problem.
It, however, noted that despite bad and doubtful debts being part of the company’s policy, the board, for the past 10 years, has not approved them even though the necessary provisions were made in the budgets.
