Revealed: Job cuts loom over ECG privatisation

A classified document has warned government that hundreds of Electricity Company of Ghana (ECG) staff are likely to lose their jobs should the power distributor be privatised under a concession contract.

The 168-page document intercepted by Starrfmonline.com and prepared by the International Finance Corporation (IFC) explicitly stated that: “With concession, if terms and conditions of employment are diminished, termination would be triggered and redundancy paid.”

The Government of Ghana is considering two privatisation preferences – partial privatisation or a concession contract – as it weighs measures to attract investment in the state-owned power distribution company.

The document, which was done on behalf of the GoG, the Millennium Challenge Corporation (MCC) and the World Bank, noted: “With regards to job security for ECG employees, partial privatisation has significant advantages as the change in shareholding of ECG has minimal direct impact on employees’ terms and conditions of employment.

“In the case of a concession, all employees that are taken over by the concessionaire need to be transferred to NewCo [new company]. This can provide the opportunity to alter their terms and conditions of employment. However, if there is a diminution in their terms and conditions of employment, then they would need to be terminated by ECG and redundancy payments made according to the terms of the collective bargaining agreement.”

Sources within government have told Starrfmonline.com that the Mahama-led administration is more likely to opt for partial privatisation which is likely to be sealed by March 2016. A transaction advisor is expected to be appointed this month per the document.

Touching on the pros and cons of the two privatisation options, the heavily guarded document said: “Of considerable significances to the choice of option, is the time it is likely to take to implement each option. As described in greater detail below, a concession is likely to take considerably longer to implement. This is principally due to the need to transfer staff over to NewCo, which will necessarily involve significant negotiations, and the need to either assign all other operating contracts held by ECG to NewCo, or terminate existing contracts and have NewCo enter into new ones. These procedures will extend the period between selecting the preferred PSP operator and their taking over the control and operations of ECG.”

Meanwhile, 10 out of 30 potential private investors/operators have expressed interest to become private sector partners (PSP) of the under fire power distribution company, according to the report titled: “Ghana Power Compact Private Sector Participation Options Study for ECG.”

Source: Ghana/Starrfmonline.com/103.5FM