ECG Concession: ACEP Worried Over Delays Following BXC Suit
The Africa Center for Energy Policy (ACEP), has said Ghana may miss the deadline for the completion of the concession agreement for the takeover of the Electricity Company of Ghana (ECG).
This is after a disqualified concessionaire in the bid, BXC Consortium, sued the Millennium Development Authority (MIDA) over perceived unfairness.
Though BXC is not seeking to place an injunction on the takeover of ECG by Meralco Consortium, a company led by Manila Electricity Company from the Philippines, the hearing of the case may force a halt in the process.
Speaking to Citi News, Executive Director of ACEP, Ben Boakye, remarked that “if the injunction is granted, it could jeopardize the timing of this concession arrangement. Mind you, we have up until September to conclude the process.”
BXC was deemed to have one or more conflicts of interest situations, hence its disqualification from the bidding process.
The Coordinator of the BXC consortium in the ECG takeover, Daniel Azu, however, insisted that MiDA’s reasons for disqualification were completely flawed and baseless as evidence emerging suggests that it was done to favour Meralco Consortium.
Ben Boakye, who described the turn of events as disappointing, believes the takeover may suffer some timing challenges due to the legal action.
“It is quite disappointing the turn of events. Why did it happen and could it not have been averted from the beginning with a company that has gone through pre-qualification?” he questioned.
BXC’s contract with ECG
BXC Ghana Limited is a Chinese company registered in Ghana and a subsidiary of Xiaocheng Electronic Technology Stock Co. Ltd.
The company is engaged in the business of manufacturing and deploying highly efficient pre-payment metering systems and management of power supply across the world.
BXC Consortium was established in Ghana in 2010. It has over the years trained and used Ghanaians to implement major projects in Ghana.
In September 2011, BXC Consortium and the ECG signed an agreement for 10 years, where BXC was expected to engage in System Loss Reduction in the Teshie and Bortianor areas; the commercial aim of which was to share proportional losses recovered by the project, while technically improving the infrastructure and deploying more modern systems of power distribution management.
Selection of Meralco
The Meralco Consortium was said to have had the highest combined technical and financial score and was therefore designated as the preferred bidder.
The company has a distribution network which covers a third of the Philippines and serves a customer population in excess of six million. It will be recalled that CH Group recently pulled out of the list of bidders leaving BXC Company Limited and Meralco Consortium.
Negotiations were expected to soon commence finalizing all the agreements related to the implementation of the ECG PSP Transaction.
Per the compact, the Millennium Challenge Corporation is expected to inject about 418 million dollars into ECG, whiles Meralco will invest about 500 million dollars.