Kwame Pianim kicks against review of contracts

From Zambaga Rufai Saminu, Takoradi

Mr. Kwame Pianin

Some Ghanaians have consistently appealed to President John Evans Atta Mills’ government to review contracts that were signed between the Government of Ghana, and her development partners, by the previous administration.

Professor Awoonor, Chairman of Council of State, a few months ago, also joined the chorus, and asked the government to review all mining contracts signed between the Government of Ghana and the mining companies.

However, a renowned economist, Mr. Kwame Pianim, has kicked out against the campaign, emphasising that it was only an idiotic investor, who would deal with governments that would review contracts signed between her and her development partners.

“It is only an idiotic investor who will come to a country where, when the government changes, your contract is to be re-engaged, or is to be renegotiated.”

According to him, the controversies over the Vodafone deal and that of Newmont Ghana, which were all signed under the previous government, were classical examples that ought not to have been tampered with by the current administration, yet it happened.

As a result, he warned the administration of Professor John Evans Atta Mills not to tamper with contracts signed between the Government of Ghana and her development partners, because of the obvious implication on the economy.

He advised the government: “We should let everybody know that when the government changes, your contract would be sacrosanct.”

He was speaking at the 10th Anniversary symposium organised by the Takoradi International Company (TICO), one of the power generating companies operating at the Aboadze Thermal Plant in the Western Region, recently.

It was on the theme: “Delivering Quality Electricity Supply: The Role of the Private Operator.” Mr. Pianim characteristically warned against the consequences of such attempts to renegotiate. “For investors, the sanctity of a contract is of critical importance. To suggest a need for review is to imply some wrongdoing that adversely impacts on the brand equity of such global firms,” he pointed out.

According to him, instead of resorting to reviewing contracts signed by predecessors, governments should rather adopt measures that would attract investors into the country, and not the opposite, because such attempts could scare away investors.

“We need to re-adjust our view on foreign investors, and rebrand the nation as a safe destination for investments, and make it clear to the investing world that contracts will be respected, irrespective of the governing political party under whom it is signed, as long as it is approved by the representatives of the sovereign people of Ghana,” he said, but singled out those purported to be tainted with corruption, to be tried in a competent court of law.

The outspoken economist described the investment climate in Ghana as fragile, which should not be damaged, because as he put it, “Once damaged, is very difficult to restore.”

Making a strong case on energy utilisation in the country, the forthright politician did not mince words when he stated: “Until, and unless consumers are faced with full cost of the supply of electricity, we cannot expect serious attempts at energy utilisation, efficiency, and conservation on the part of consumers.”

Mr. Pianim argued that if the tariffs would be accepted as fair by the consuming public, the Public Utilities Regulatory Commission (PURC), regulator of the sector, needs to be empowered and seen as being independent of the government.

He stressed that such institutions should be resourced with human and material adequately, to be able to engage the utility companies professionally, and undertake both technical and financial audits, with a view to arriving at full cost recovery tariffs that ensure a fair risk, adjusted return on their investments, while giving consumers value for money.

Mr. Pianim again opined: “As the role of the private sector gains greater significance in the delivery of quality electricity supply, the role of the PURC, and other regulators such as the Energy Commission, the technical and standards regulator of electricity will assume greater importance.”

A Deputy Minister of Energy, Mr. Emmanuel Armah Kofi Buah, in his address, said the government had projected increasing power generation capacity from the current 2,000 megawatts to 5,000 by 2015.

He said the government also aims at increasing access to electricity, from the current level of 67%, to universal access by 2020, through the involvement of independent power producers (IPPs)

The Deputy Minister, however, explained that in accomplishing these goals set by the government, the challenge now, was to attract investments to build the necessary infrastructure for the generation, transmission and distribution of electricity throughout the country.

“The investment requirement needed in the power sector to meet the goals is such that the government alone cannot shoulder it,” he acknowledged.

Nana Osafo Adjei, General Manager of the company, in his address, disclosed that TICO, being part of the energy suppliers in the country, was providing 220 megawatts, representing almost 50% of the total capacity of the current 550 megawatts being generated by the Aboadze Thermal Plant.

“In the very near future, TICO plans, in concert with its major partners, the Abu Dhabi National Energy (TAQA) 90%, and Volta River Authority (VRA) 10% and with the tacit support of the Government of Ghana, through the Ministry of Energy, to increase its current generation to 330 megawatts.”

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