GRi Press Review 04 - 02 - 2002
Electricity company’s cocktail of waste and
fraud - ¢256b lost
Energy crisis looms
Ghanaian
gold miner Ashanti (ASL) underlined speculation about it being the most
eligible stock on the block by trouncing the competition in 2001. After taking
the lead at the mid-way point with strong financial results, the revitalized
company never looked back again and returned 101 per cent aft tax.
Ashanti
has been earmarked as a likely takeover target for one of the gold majors this
year. It was such a convincing winner that runner-up Delta Gold (DGD) of
Australia trailed by massive 11 points, but with a still impressive 90 per cent
after tax total return. (It outperformed the Standard and Poor index and the
Dow Jones Industrial Index).
Last
week, AGC still put up spectacular numbers dumbing its critics, concluded its
hedge book uncertainties, a full year ahead of time and with that, gaining
valuable breathing space and over $54 million equity which will go into shaping
its balance sheet or reducing its debts.
It
appears the sky is not going to tumble on to earth with the almost decisive
statement of intent by the Government Information Minister, Mr Jake
Obetsebi-Lamptey, that he would not stand in the way of any market movement
towards Ashanti but has it that there are no immediate plans of lifting the
golden share, a politically sensitive matter, which Ashanti’s Chief Executive
had been campaigning for with a view to sending AGC shares shooting up for
shareholder values. (He has held discussions with most senior media personnel,
MD’s of most banks, MPs, Ministers and at open forums with government officials
and private sector leadership).
But
on the competitive race of the global players, the genuine surprise was South
Africa’s Durban Roodepoort Deep (DROODY), which started the year with little
promise. It recovered quickly, though as it cleared one corporate logjam after
another and looks set for another spectacular year even after generating an 88
per cent return last year.
Significantly,
most of the major league gold producers were hit when the gold prices jumped
and hurt the hedge books of many of them including Ashanti, which precipitated its
crisis. Its fortunes were not helped by a politically motivated court case in
which the trial judge, Mr Justice Apaloo, gave one of the dumbest decisions in
corporate Ghanaian history and immediately sent AGC shares spinning dangerously
towards the de-listing $1.00 mark.
Another
surprise was GoldCorp (GG). It, ranked fourth with a huge 83 per cent, returned
even though it has been labeled expensive for at least 18 months. The Canadian
maverick has delivered everything it promised with fantastic cash flows kicking
in this year, thanks to the Red Lake mine, which is the industry’s present
mother lodge.
Australia’s
Newcrest (NCM) was a convincing loser with a 4 per cent loss after tax and, if
the speculation is to be believed, is at death’s door, thanks to an
out-of-control hedge book.
Easily,
the most disappointing result was world number 1 by market valuation, Barrick
((ABX). The Canadian miner slipped to a 1 per cent loss for the full year,
pulling up one position from its half-year ranking. Investors will be
disappointed that Barrick is effectively being treated as ex-growth.
But
it would be unwise to write it off given the firm’s tenacious defense of its
market leadership. It may well represent the best value play for 2002. Barrick
under performed the gold price by 3 per cent and the Philadelphia Gold &
Silver Index by 7 per cent. But it did beat the Dow and S&P (Standard and
Poor) 500, underscoring the sector’s safe have status even in rough times.
Newmont
(NEM) had a muted year by its standards returning just 10 per cent, but that
can be attributed to short-selling pressure by hedge funds anticipating its
successful acquisition of Normandy (NDY).
Placer
Dome (PDG) was also a weak performer relative to its peers with a miserly 11
per cent total return. Like Barrick, it is also suffering from perceptions that
it is ex-growth following the write off of its Getchell project and a lack of
world-class prospects in its development pipeline. It is one of the big mines
that lost heavily in the hedge crisis of 1999/2000.
Ashanti’s
performance attributable to strong management and equally strong operations on
the ground means that well heeled investors will be looking leering at Ashanti
with the absence of a hostile anti-private sector Government in place.
More…/
Two
security men in the President’s convoy were killed when they were thrown out of
their vehicle after it hit a big pothole on the Aflao-Tema road, bursting a
tyre and killing them shortly afterwards from head injuries they sustained.
The
President, who was two or three vehicles ahead of the accident vehicle, was
said to be shaken by the incident but returned safely to Accra where he
commiserated with the small number of security detail at his residence. They
were returning from a well-attended durbar at a village in the Volta Region.
Ms
Elizabeth Ohene, Minister of State at the Presidency, was too down to give much
details when contacted by the Chronicle at noon on Sunday. Her vehicle was following
directly behind the car involved in the accident. “I believe a statement would
be issued and the full facts made known…I’m not sure I can say much,” she
muttered heavily, obviously traumatized by the incident, the second tragedy
inside one year which has cost the life of a security officer.
Names
of the deceased were not immediately known, but is said to include one
Morrison, an experienced security officer. Both men suffered serious head
injuries when they were flung out of the vehicle on impact and were taken to
the Tema General and 37 Military hospitals.
Policemen
at the President’s house and friends of the dead were distraught when the news
broke out. President Kufuor himself was deeply pained as he shared his
experiences with his close friends on Sunday, it was gathered.
It
would be recalled that Chronicle last year reported on complaints by security
personnel on the acute shortage of good vehicles in the pool, a significant
number having been commandeered by the ex-President - over 20 - and drawing
fuel from the state in full view of security personnel, frozen into inaction by
the sound and fury of former apparatchiks of the NDC government.
Chronicle
gathered that the vehicle involved in the accident was yet to be declared
mechanically sound, as it had just returned from the workshop after days of
repairs.
Currently,
ex-President Rawlings still keeps more than 14 vehicles and National Security
still has problems with vehicles, not only in numbers but even in quality. On
Sunday, Rawlings was seen driving off from M-Plaza in a powerful exclusive
Toyota Coupe, the only marque in Accra with a gleening VW Passat in tow packed
with security personnel.
GRi…/
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The
government negotiating team on the supply of power to the Volta Aluminium
Company (VALCO) has sent a strong signal to the company’s negotiating team that
it should be prepared to pay more for the power it gets from the Volta River
Authority (VRA).
At
its maiden meeting in Accra, the team’s chairman, Mr B.J. da Rocha, stated
unambiguously that the country can no longer subsidise power for the company.
He submitted that, “the price paid by VALCO for power must bear a direct
relations to the cost of producing and transmitting the power to the company.”
Information
has it that the company buys power below two cents for a kilowatt-hour at the
cost of about 5 cents. He declared: “What it (VALCO) pays now is too low and is
well below the cost of producing the power and additional power when available.
“The
reasons for the new power allocation are obvious. There have been changes in
population, growth of industries, and higher demand for power at all levels.
These clearly justify, the need for a reappraisal of power allocation,” said a
determined da Rocha.
Another
proposal is that electricity supply under the present circumstances should be a
mix of hydro and thermal power for all consumers, including VALCO, to ensure
equitable and optimum use of facilities and resources. Chairman da Rocha
referred to the increasing demand, which prompted the setting up of the Aboadze
Thermal Plant near Takoradi, to buttress his argument that demand for power has
changed significantly since the agreement was signed some 40 years ago.
The
negotiating team wants the status of VALCO, as a pioneer industry, to be
reappraised to reflect the prevailing circumstances. Under the special status,
the company had some privileges and exemptions, which it still enjoys, even
after 30 years.
Figures
from the Internal Revenue Service office show that from 1967 to 2001 the
company tax from VALCO is on the average $8 million a year because the company
pays corporate tax on what is earned from tolling charges and not from what it
earns in the sale of aluminium manufactured from the smelter.
Mr
da Rocha expressed the hope that the negotiations will be conducted in a business-like
manner and realistic way to reach mutual understanding. He was optimistic that
the negotiations will not drag on beyond 90 days. “Should there be a deadlock
after 90 days, each side will consider its options and future action,” he
added.
The
two sides are expected to meet late Monday afternoon during which the VALCO
team will present its comments on the power contract, agreement draft, while
the VALCO Status Agreement will be presented to the company’s representative by
Wednesday.
More…/
The
Brong Ahafo Regional Coordinating Committee of the National Democratic Congress
(NDC) has called on the leadership of the New Patriotic Party (NPP) to desist
from the continuous harassment, molestation, intimidation and violent attacks
on NDC functionaries and their property to ensure peace in the region.
According
to the committee, such acts only go to undermine the peace and unity of the
people. It called for an immediate end to them. The call was contained in a
communiqué issued at the end of its first regional coordinating meeting held at
Sunyani.
It
said such acts threaten the peace of the region and do not augur well for the
development of a tolerant democratic co-existence of all political parties.
The
communiqué, said the committee, has evidence of such attacks and described the
denial of the allegations by the Press Secretary of the NPP on radio and in one
of the dailies as unfortunate because the matter was not investigated. It cited
Sunyani, Dormaa Ahenkro and Kintapo as some of the few places where such acts
have been reported.
The
communiqué mentioned that at Sunyani Johnson Asiedu Nketia was verbally
assaulted while he was on air at Sky FM, on August 31 while on January 11
another supporter of the party, Kojo Ntow, was also assaulted at Dormaa Ahenkro
by some youth of the NPP when he was on his way to pay his water bill.
It
mentioned the destruction of a vehicle belonging to the regional GPRTU after
its chairman, who happens to be the NDC regional chairman had released it to
the police at their request to enable them arrest some youth at Kintampo. The
communiqué said in this era of the rule of law, such acts should not be
permitted and asked the NPP leadership to caution their members to desist from
such acts.
It
said, the NDC as a party, has no interest whatsoever to exacerbate tension in
the region as alleged by the NPP Press Secretary in his press statement. It
said, “It is the constitutional duty of the government to protect all citizens
of the country and that any breach of the peace by elements of the ruling party
should be seen as an indictment on the performance of the NPP government.
The
communiqué also called on the leadership of the party to educate their members,
supporters and activists, particularly the youth, to uphold the cardinal
virtues of love, tolerance and peaceful co-existence so as to avoid such
unwarranted, destructive and provocative acts in the future.
“We
are also calling on the Police Administration in the region to investigate
these incidents and bring the perpetrators to book and institute measures to
prevent further recurrence of any such lawlessness.”
GRi…/
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Exciting
ex-President J.J. Rawlings has told the Ghanaian Voice that he is prepared, ready
and willing to testify in the Quality Grain trial if and when invited to
testify. “I am a citizen of Ghana and I am not above the law.”
The
Quality Grain trial involves officials of his previous government and he has
said on one occasion that it is the programme of his government that is on
trial. The officials involved are Mr Kwame Peprah, former Minister of Finance;
Mr Ibrahim Adam, a former Minister of Food and Agriculture, Dr George Sipa
Yankey, former director of Finance and Dr Dapaah, a former Chief Director of
Ministry of Food and Agriculture and Nana Ato Dazie, former Chief of Staff.
In
the interview with the paper he described the comments of Justice D.K. Afreh
with regards to the interview he granted to Peace FM, an Accra radio station,
as “not inappropriate, but I believe if he (Justice Afreh) knows what I know,
probably his reactions or comments would have been different.”
More…/
Former
Vice President, Professor John Evans Atta Mills, who is now a lecturer at
Vancouver University, Canada has now joined the long list of NDC functionaries
who have been harassed and intimidated by the current government.
The
State Security does not even care that the former Vice President is not in the
country. And gauging his rising popularity even out of office is looking
through the hay-sack to locate a needle to pull him down. So a strategy was
laid and on Thursday January 31, eight security men went to the residence of
the Ex-Vice President and decided to take away four vehicles – Toyota
Landcruiser, a Ford Countour and two Toyota Corona. One of the vehicles belongs
to his wife.
When
the eight security men were told that the three vehicles were allocated to the
ex-Veep by the transitional team they refused and drove them away to the BNI.
It was only at 10 am on Friday that the vehicles were released.
The
question we want to ask is that the security with all the amenities at their
disposal would not find it difficult to know the source of these vehicles. And
do we need eight security men to go for four vehicles from a for vice
president’s house.
GRi…/
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Electricity company’s cocktail of waste and
fraud - ¢256b lost
The Electricity Company of Ghana’s persistent demand on consumers to cough up hard earned income to pay higher rates for the company to survive, rings hallow against revelations by a forensic audit commissioned by Government cataloguing a cocktail of fraud and waste at ECG’s backyard.
One of the colossal disclosures is the amount
the company loses to its system. According to the forensic audit report, the
company loses ¢256 billion per annum in its system. This colossal amount is
lost mainly to power waste, in order words power for which no one pays. The
audit report recommended that the management of ECG should review its operation
to address the losses.
Aside this waste in the ECG system, the audit
implicated some officials of the company and some accomplices for their
involvement in different levels of massive fraud. The officials include a
former Managing Director of the company, Chief M.B. Adam, the Director Finance,
C.S. Tetteh and E.Y. Nyarko of the Company’s Materials Department. Others
include S. Boakye-Appiah and Mariston Co. Ltd.
The forensic audit report recommended the
prosecution of the former Managing Director, Chief of M.B. Adam for the loss of
¢12 billion for the award of procurement contract for metres without the
Board’s approval and excessive mark-up of cost of metres.
Another official the audit recommended for
prosecution for this transaction is C.S. Tetteh. The audit report also
recommended that the beneficiary company- Mariston Co. Ltd- should be made to
refund part of the mark-up. Outstanding payments to Mariston should be withheld
pending any court action.
The former Managing Director, Chief Adam and
another official, E.Y. Nyarko are to face prosecution for financial losses to
the tune of ¢200 million for unfair pricing and overstocking of batteries. They
are also required to refund the lost amount. Aside that Adam and Nyarko are to
refund interest on the sum of ¢677 million lost through over stocking of tyres.
The report has also recommended Nyarko’s
prosecution for over pricing of tyres by GM International Ltd. The audit
estimates that an amount of ¢614 million was lost to the company. Aside
prosecution, Nyarko is to refund the amount.
He faces another prosecution from alleged
involvement the over pricing of tyres by Palmers Green Ltd to the tune of
¢253.7 million. The audit report also recommended that Nyarko be made to refund
the amount involved.
The audit also recommended that Nyarko and
another colleague S. Boakye-Appiah should be made to refund an amount of ¢65
million and be made to face disciplinary action. Nyarko is also to face
disciplinary action from the management of the company for the loss of ¢690.7
million through overpricing of Cable Lugs by Mariston Investments Co. Ltd.
Mariston Co. Ltd are also required to refund excess profit the company made on
this transaction.
GRi…/
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Energy crisis looms
There are indications that the country could be hit by an energy crisis in the near future. This is because the country’s electricity supply is barely enough to meet demand. Should there be any breakdown in the power generating units, or a shortfall in supply, the Volta River Authority (VRA) would have to resort to load shedding.
According to available statistics, the total
demand for power is 1,290 mega watts while the total supply is pegged at 1,190
mega watts, making it impossible for the creation of any backup.
The Minister of Energy, Mr Albert Kan Dapaah,
made these revelations at a two day seminar on Ghana Electric Appliance Standard
and Labelling organised by the Energy Foundation for Parliamentarians and their
stakeholders in the energy sector at Agona Swedru, in the Central Region, at
the weekend.
He stated that rainfall for last year was low
and also only 459 out of the 550 mega watts of power generated from the Aboadze
Thermal Plant got to the Eastern corridor of the country due to poor
transmission lines. He said that to compound the issue, 30 percent of the power
generated got lost due to the inefficient use of energy by Ghanaians.
Mr Kan-Dapaah explained that the 30 per cent of
the end use waste is the total output of the Kpong Power Generation plant
adding that it constituted substantial loss of investment. He said the
government would need about $500 million to construct the Bui Dam in the
Brong-Ahafo Region, however, when constructed its output would only cover the
losses in the system.
He said that results from a study conducted in
Ghana showed that a 10 per cent savings in energy consumption for room
air-conditioners could save residential consumers nearly $8 million and reduce
carbon emissions by 68,000 tonnes. He said for lighting, saving 10 per cent of
the residential load through policy and regulation would translate into $6
million in consumer savings to urban consumers.
On refrigerators, minimum energy performance
could result in savings up to ¢50 million by 2010 for consumers, and reduce
carbon emissions over the same period by 230,000 tonnes. He noted that Ghana
had become a dumping ground for energy inefficient domestic appliances.
The Minister assured Ghanaians of government’s
support for the promotion of efficient standards and labels, which are the most
cost-effective tool to ensure efficient energy use.
Mr Andrew Quayson, chairman of the Energy
Foundation, noted that Ghanaians are inefficient in the use of energy and
called for realistic power tariffs to ensure full cost recovery. He said that
there was a huge energy saving potential to be derived if minimum energy
efficiency standards were adopted and backed by law to operate in Ghana.
More…/
Henceforth, departmental heads would be held
responsible and liable for the insertion of ghost names in pay rolls.
Departmental heads have therefore been tasked to take keen interest in ensuring
the elimination of ghost names from their pay rolls to save them the troubles
of being prosecuted at the law courts.
The Upper West Regional Minister, Mr Mogtari
Sahanun, gave the warning when he opened the first Regional Co-ordinating
Council meeting for the year at Wa.
The meeting that brought together departmental
heads, district chief executives, presiding members and development planners
would among other things map out appropriate development strategies to fight
poverty and disease and to move the region forward in line with the
government’s policy of positive change.
Mr Sahanun said the government had waged a
relentless war on ghost names and told the heads to co-operate to make the
exercise a success. He said any attempt by anybody to, frustrate the exercise
would not be tolerated and that such persons would be brought to book.
The Regional Minister directed all heads, to as
a matter of principle, display, the list of their staff on public notice
boards. The list, he said should be updated monthly for public scrutiny as a
measure to eradicate the menace totally. Mr Sahanun said departmental heads
should also take the trouble to vet monthly salary vouchers before authorising
payment as a means of prompt detection of ghost names.
The Minister remarked “It is unfortunate that
ghosts who are dead and are to lie in their graves should find their way onto
pay rolls and take large sums of money to the detriment of those alive. “This
is highly unacceptable and must be halted at all cost,” he pointed out to the
heads.
GRi…/
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