Opinion: Open letter to John Peter Amewu – Minister of energy

Minister of Energy John-Peter Amewu

Dear Honourable John Peter Amewu,

I felt compelled to write this open letter to you after reading the article attributed to you and titled, “Government paying US$500 million annually for power not being used due to Mahama’s bad policies” that was featured on 3news.com on 07 November 2020.

I start by reminding you of the popular Akan adage which translated into English language literally means: If you cannot praise, you do not insult the perceived “incompetent traditional healer” who managed and succeeded to keep the seriously ill patient alive for several days before the arrival of the orthodox medical doctor to continue treatment.

Honourable John Peter Amewu are you not ashamed that for almost four years since the Ghanaian electorate democratically gave their political mandate to your New Patriotic Party (NPP) led by Nana Addo Dankwa Akufo-Addo and Dr. Mahamudu Bawumia, and after your party falsely tagging John Dramani Mahama and the National Democratic Congress (NDC) in 2016 as incompetent and corrupt, with NPP now being at the helm of national affairs since 07 January 2017, your continuous resort to passing the buck and blaming John Mahama and NDC suggests that your party is competently confirming to Ghanaians that NPP is incompetent?

It is regrettable that your NPP administration that has unashamedly plagiarized and claimed credit for projects implemented by John Mahama and NDC, which you personally in good conscience know very well that NPP never conceived let alone had the presence of mind to initiate such landmark projects but you still continue to peddle lies by claiming that NPP curtailed and even resolved ‘dumsor’.

In your previous role as Director of Research and Policy at your Africa Centre for Energy Policy (ACEP) which you co-founded you cannot be pardoned for not having factual insights on Ghana’s electricity generation history and what got us to where we now find ourselves as a country. For the avoidance of doubt and speaking to you as an enlightened Cocoa Farmer I wish to remind you of the following:

You and NPP out of political expediency have decided to “criminalize” and make a fetish out of “take and pay” contract agreements that NDC entered into with Independent Power Producers (IPPs) when you know very well that the Engineering Procurement Contracts (EPCs) that IPPs used to source financing for their thermal electricity power plants brought to Ghana require long term financing and because Government of Ghana (GOG) does not have between US $100milion to $350 million to make outright payments for the cost of acquisition, installation, commissioning and maintenance and running costs associated with a thermal electricity power plants, GOG and electricity consumers together have to pay for the financing cost whether or not we use the electricity produced by the IPP hence the standard industry practice of “take or pay”? The alternative arrangement would have been for GOG to pay and own outright the thermal plant.
Besides the cost of financing for thermal plants, you also know that the running and maintenance cost of the thermal plant is paid for through the end-user electricity tariff that electricity consumers pay for using electricity, and you also know that IPPs on their own do not determine and fix electricity tariffs in Ghana at the desired commercial electricity tariff rates that would give and earn them reasonable profit and returns on their IPP investment.
I am sure that if you (John Peter Amewu) established for yourself an IPP you would not be pleased with receiving irregular payments by intermediary consumers of electricity and also final end-user consumers of electricity the likes of Volta River Authority (VRA), Electricity Company of Ghana (ECG) and the host of Government and Public Agencies, and also private consumers who either don’t pay or pay as and when they feel like paying for electricity consumed notwithstanding the fact that IPPs have to fulfil their regular debt service payments to the banks that financed (lent them money) for the thermal plant through the various EPC contract agreements etc.
You also know that the continuous Cedi depreciation relative to the value of the US dollar implies that overtime the revenue accruing from electricity tariffs loses value and becomes insufficient to cover the fixed foreign currency denominated debt service payments that IPPs have to make to their lenders (bankers) and also investment returns to their shareholders.
You also know that Ghana has major engineering challenges associated with transmission of electricity across the country which contributes to above global industry standards on permissible inherent network electricity transmission losses and as such all electricity consumers in Ghana pay for this inefficiency arising from electricity transmission losses.
Finally, you are aware that illegal electricity connections contribute significantly to the transmission losses and revenue leakages arising from electricity tariff hence as a country’s genuine electricity consumers are compelled to pay a heavy price for electricity theft arising from illegal unmetered electricity connections.
The points enumerated above should have been familiar to you from your ACEP days before you were appointed to hold the Ministry of Energy Portfolio.

The issues enumerated below concern the excess electricity generated in Ghana that you complain and lament about even though the Ghanaian electorate expected you and NPP to solve national problems and not find excuses by blaming John Mahama and NDC for your incompetence.

John Mahama and NDC were not reckless in expanding Ghana’s electricity generation capacity having borne the brunt of NPP’s inability to address the challenges associated with global warming and the hydro energy crises that former NPP President John Agyekum Kufuor failed to resolve in 2007. Also John Mahama and NDC suffered the dumsor crises arising from the damage to the West African Gas Pipeline (WAGP) in 2013-2014 and Nana Akufo-Addo’s and Mahamudu Bawumia’s unnecessary eight months wasting of John Mahama’s presidency at the frivolous Supreme Court Election Petition with Bawumia palpably lying under oath with the sheepish refrain, “you and I were not there”. The time lost at the Supreme Court Election Petition was a loss to Ghana’s economy for eight months. Contrast that to the barely three months impact of Covid-19 lockdown crises which paralyzed the economy.

John Mahama and NDC realized after nearly three years of the debilitating ‘dumsor’ on Ghana’s economy that the country had to create a significant buffer capacity for electricity generation such that the loss of hydro generation capacity or loss of any significant IPPs would not bring about ‘dumsor’ again. Indeed, no protracted debilitating ‘dumsor’ has occurred since 2016.
John Mahama and NDC through the Ghana Gas infrastructure at Atuabo that was conceived and implemented by NDC (under John Atta-Mills and John Mahama) and with foresight on the coming onstream of additional FFPSOs besides the Osagyefo Kwame Nkrumah FFPSO at the Jubilee Oil Fields (and subsequent Kufuor FFPSO and John Atta Mills FFPSO) laid the foundation for the use of cheaper Natural Gas as the fuel for Ghana’s increasing number of thermal electricity generation power plants and discontinuation of the use of the more expensive Light Crude Oil (LCO) that the older installed thermal plants used.

Ghanaians must know that the “take and pay” contracts that GOG entered with IPPs made room for periodic review and renegotiation of some components of the pricing with the IPPs to cover operating and running costs of thermal plants. Under the original plan following the development of the Atuabo Gas infrastructure NDC envisaged that if they were out of Government any responsible Government would renegotiate “take and pay” agreements rather than the irresponsible behaviour of incompetent NPP using “take and pay” for cheap propaganda and vile politics.

Under the 06 September, 2016 Millennium Challenge Corporation (US) Energy Compact of US$498.20 million, Ghana had access to significant cash injection in the form of US Foreign Aid Grant to improve the energy sector and to privatize retail distribution of electricity through a concession agreement which under the watch of NPP was botched through the “family and friends” nepotistic behaviour and wanton greed which saw the termination of the PDS/ECG Concession Agreement.
PDS was described by you (John Peter Amewu) as fraudulent transaction and indeed your incompetent NPP failed to ensure that conditions precedent that were required for the safe transfer of ECG assets valued at Ghc18 billion to be transferred to PDS were fulfilled before transferring the assets to PDS. To date notwithstanding your allegation of the fraudulent nature and by implication the “criminal” intent to defraud Ghana, no individual is under investigation for the alleged crime.
PDS scandal cost Ghana to lose US$190 million which would have been used to improve efficiency in electricity transmission through reduction of electricity transmission losses and electricity power outages.
NDC envisaged that with expansion of rural electrification every corner of the country was to be served with national grid electricity and this was programmed to absorb some of the excess electricity that was being generated in Ghana. NPP under Nana Akufo-Addo however failed to continue the rural electrification project and rather focused on “hijacking ECG” a national asset for their “Akyem Kyebi family and friends” sleaze and state capture.
NDC envisaged that with cheaper Natural Gas from Ghana’s Oilfields Ghana’s IPPs would have access to cheaper fuel for their thermal plants and coupled with NDC’s planned investments in nationwide electricity transmission capacity Ghana would have been part of the proposed West Africa Electricity Power Pool and become a net exporter of electricity to neighbouring countries. Because NPP lacked the strategic intellect and competence to continue with these legacy projects, NPP rather resorted to placating and showcasing their incompetency with the propaganda refrain Ghana paying US$500 annually for electricity it doesn’t use when Ghana could have potentially been generating in excess of US$500 million annually from exporting electricity to neighbouring countries.
Honourable John Peter Amewu please stop blaming John Mahama and NDC because you are only confirming to Ghanaians that NPP is incompetent and bereft of ideas to govern a nation state like Ghana and as such voters should not waste their votes on 07 December, 2020 to vote for Nana Akufo-Addo and incompetent NPP Parliamentary Candidates.

Honourable John Peter Amewu, I end by entreating you to read the following texts:

“The Peter Principle” authored by Laurence J. Peter
The Parable of the three Servants – Matthew 25:14-30 (Good News Bible)
Opanin Archimedes Owusu-Ababio

C/o Cocoa Shed: Suro-nipa Nkwanta

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