Dumsor: Government opting for $700m solution while $200m alternative sits idle

A $700m emergency power deal with Dubai company has been criticized as unwise because as a power-thirsty but cash-strapped nation, Government could buy that power for $200m.

African Center for Energy Policy has explained at Joy FM’s Power Forum that Government can get value for money by dealing with an American company, General Electric.

“One wonders why Government would go in for a BOT [Build,Operate,Transfer] arrangement that will require us to pay $700m over 5 years when we could have bought it outright for $200m”, its Executive Director, Amin Mohammed said on Wednesday.

Amin Mohammed formed part of a panel discussing Ghana’s three-year energy crisis at Wednesday at the Ghana-India Kofi Annan Centre of Excellence in ICT.

Following erratic power supply, Government has clinched a deal with a Dubai-based company APR to bring in emergency power generators. The barges are expected in April to complement a shortage rumored to be at a 1,000megawatts.

A power barge

Breaking down the components of the Dubai power deal, Amin Mohammed said government was procuring 10units that could produce 25megawatts each.

The contract comes at a cost of $138m a year and will be leased for five years, running up a bill of nearly $700m.

This bill excludes the cost of fuel to power the barges.

The ownership of the power barges is then transferred to Ghana government by 2021 in a deal know as BOT [Build, Operate, Transfer].

ACEP is unimpressed by this deal.

“If we were to buy them outright, all the 10units we would buy them for $180m to $200m because each unit is about $20m.”

According to the energy policy expert, he has made his checks with American power giant, General Electric.

He suspects that the deal could be an attempt to make money out of the power crisis.

Source: Ghana|Myjoyonline|Edwin Appiah|edwin.appiah@myjoyonline.com