Uncertainty, disruptions grip businesses

Ireneo B. Acuna, Vice President of Meralco

….as power outages return.

Businesses in the southern part of Ghana have started this week in a cloud of uncertainty as power outages, which have been occurring with alarming regularity since mid-last week, have caused considerable business disruptions, resulting in irregular production and debilitating increases in running costs for enterprises that have opted for power generation from private equipment while the outages last.

While government has assured that the problem is simply a very short term technical one which is expected to be resolved over the coming couple of days, many business owners and corporate executives remain worried that the problem is being understated in similar fashion to the situation at the start of Ghana’s most recent power crisis a few years ago. When it began in 2012, government assured that normalcy would be quickly restored but the resultant power outages intensified and ultimately lasted for more than four years.

However, indications are that this time official assurances of a quick restoration of normal services are true, as state owned and private enterprises along the power generation and distribution supply and value chains are moving to live up to government’s promises.

The Ghana Grid Company Limited (GRIDCo) has asked Power Distribution Services (PDS) to redistribute loads at various Bulk Supply Points to ensure system reliability.

This has become necessary due to the current power situation which has rocked parts of southern Ghana and has, throughout the whole of last week, been posing challenges to businesses in the capital and other urban centres in particular.

The company, in an official statement to PDS, has made a formal appeal to the power distributor to save the situation in a prompt manner.

Meanwhile, Energy Minister, Mr. John Peter Amewu, has said, the recent power situation is as a result of minor technical challenges which would soon be resolved.

The challenge he noted is due to the construction of the road interchange at the ACP Junction, at Pokuase, which has led to taken out of service the 330KV Aboadze-Tema transmission line traversing the road by the Ghana Grid Company to enable the contractor to divert the power line.

However, the Institute of Energy Security (IES) has also warned Ghanaians to prepare for more power outages.

IES’s Executive Director, Paa Kwesi Anamoah Sakyi, explained that PDS, should have known the situation prior to its arrival and updated Ghanaians.

Though some areas were earlier prompted with notices offered for impending power cuts, the outages went beyond such designated areas.

However, PDS has attributed the blackouts to problems experienced at the Bulk Supply Points, but the regularity with which the outages are happening have caused many to doubt their explanations.

Power sector regulator, the Public Utilities and Regulatory Commission (PURC) says it is set to commence investigations into recent power outages in Accra and some parts of the country to ascertain the actual cause and initiate appropriate actions.

According to reports, the Commission has been closely monitoring the development and has reiterated that it will not hesitate to apply the required sanctions should the outcome of their investigations prove that PDS have breached its service delivery guidelines.

Aside this, PDS will also be compelled to compensate customers if the investigations conclude that they are complicit. The recent outages which have each lasted for more than 10 hours consistently for days in succession have arisen less than a month after the Electricity Company of Ghana (ECG) handed over the company’s operations and activities to PDS.

The situation is having adverse impact on businesses and to a large extent, is causing discomfort to people.

While industry does not expect the ongoing outages to have the medium to long term debilitating effects that Ghana’s recent power crisis, between 2012 and 2016 since there are credible assurances that the current situation will be resolved this week, they are nevertheless having to cope with major inconveniences.

Heavy industry, which is hugely reliant on power, has had to cut back production during the outages because the technical challenges, and sheer financial economics of switching over to private generating sources for just a few days, make it not worth the effort.

Some industries though have computed that it is worth the effort and have therefore done so, but the resultant extra costs are eating away their profitability while they use private power generation. Indeed, industrial economists are claiming that they are doing so only to ensure that they do not loser market share to competitors who mare not so adversely affected by the current problem.

“If your regular orders from customers are met by your competitors, even for a couple of days, it may be difficult to get those customers back when normal production resumes, especially if your competitors deliver similarly high product and service quality” one industrialist told Goldstreet Business at the weekend.

Many small and micro sized enterprises are simply riding out the problem. “I had a generator which I used during the dumsor of a few years ago, but I sold it in 2017, based on government’s assurances that the problem would not re-occur again” lamented one personal grooming entrepreneur at the weekend. “I cannot afford another one right now so I can only hope that government’s latest assurances that the situation will be normalized imminently is true.”

Indeed, it is the uncertainty surrounding the problem, rather than the immediate power outages themselves that are giving business owners and corporate executives the biggest headache. This is why an independent energy think tank, the Africa Centre for Energy Policy (ACEP) has called for the need to promote public understanding concerning the actual cause of the outages.

In a statement signed by its Executive Director, Benjamin Boakye, ACEP is admonishing all power utility service providers to properly inform customers ahead of time about any interruptions to enable customers, most especially entities and businesses make alternative plans.

By Wisdom Jonny-Nuekpe & Dundas Whigham