A recent investigation has exposed major procurement irregularities and financial mismanagement at the Electricity Company of Ghana (ECG), resulting in significant losses running into over GHS 900 million in demurrage charges.
The investigation, conducted by a government-appointed technical committee, highlights the negligence of ECG management in handling procurement processes, leading to a substantial backlog of containers at the Tema Port.
The report, which has been submitted to the Ministry of Energy & Green Transition, found that ECG’s failure to clear containers from the port was not due to financial constraints, as claimed by the company, but rather due to poor management decisions and over-procurement.
The committee, which analyzed ECG’s procurement practices, revealed that the company had acquired more materials than necessary, largely due to undue influence from top management, including the former Managing Director.
According to the investigation, the procurement issues worsened in 2023, after the merging of the Procurement Directorate with the Premises & Estates Directorate.
The Director of Procurement, Premises & Estates admitted that a majority of the stranded containers were purchased during his tenure.
He further disclosed that these purchases were driven by pressure from top management, specifically, the former MD, who awarded contracts to select suppliers without following proper competitive bidding processes.
This mismanagement led to overspending, pushing ECG’s procurement budget for 2023 into the billions of cedis beyond the planned figure.
The investigation revealed even more alarming findings, including the unaccounted disappearance of 1,346 containers worth over $489 million, which included high-value equipment like transformers.
Despite claims of financial difficulties, ECG had awarded a pre-financed clearing contract worth GHS 30 million to Mint Logistics Ltd, yet failed to clear essential equipment, highlighting severe operational inefficiency.
Moreover, a contract worth GHS 127.65million was awarded to a clearing company that was not even a registered Customs House Agent, despite ECG having its own internal unit capable of handling such shipments.
Another contract awarded to Dawards Bond Ltd. saw 47 containers fraudulently cleared without paying the required duties. Only 46 of the containers were delivered to ECG, and the company now demands an additional GHS 5.29 million for services rendered, while taxes on these shipments, which were evaded, amount to nearly GHS 4.8million.
The committee’s report also suggests that the backlog at the port may have been deliberately created to justify awarding third-party clearing contracts totaling GHS159.65 million.
Despite ECG’s functional internal shipping unit, the company outsourced this work, leading to further financial strain and mismanagement.
The findings of the investigation paint a grim picture of financial irresponsibility at ECG, underlining the need for strict reforms in procurement processes and financial management.
This report sheds light on the systemic issues that have plagued the company and resulted in significant losses, raising serious questions about the accountability of top management at the time.
With the full scale of the mismanagement now exposed, the NDC government is under pressure to take action to prevent further waste of public resources and ensure that such practices are not repeated.
-BY Daniel Bampoe
