STATEMENT BY TONY OTENG-GYASI ON THE OCCASION OF COMMISSIONING OF 5.1 MEGAWATT DIESEL GENERATORS BY GHACEM – 18TH APRIL 2007

Hon. Minister, Ladies and Gentlemen, thank you for the opportunity to say a few words on this important occasion.
The current electricity situation is of great concern to industry and we are closely monitoring the efforts of government to solve the problem. In the long term from what we have seen and heard from government so far we are inclined to give government the benefit of the doubt and trust that appropriate solutions are in the works.
However our immediate concern is for the next few months. Industry as a whole has shown commitment to the 25% cut requested by the utilities. It is worth knowing that this 25% cut is required irrespective of the load shedding programme. By investing in stand by generation and also using energy saving measures industry is working hard to achieve this saving.
It is worrying that these measures by industry are not being replicated by residential and commercial users. It is important that as a nation we bear the brunt of this problem together. I wish to reiterate that it is essential in our view that all residential and commercial consumers also reduce their electricity consumption. Indeed between electricity for industry and for residences, many people agree that industry should have priority.
We also urge government to expedite action on the energy saving lamps. We are reliably informed that this is on order and should help achieve some savings.

Running a generator has been estimated to cost about three times the cost of using power from the national grid. In this regard industry has made representation to the Finance Ministry for various concessions. These range from accelerated depreciation of newly purchased generators for companies which purchase generators to price reduction for diesel used in running industrial generators. In addition maximum demand surcharges are inappropriate, especially for LV customers, when usage is limited. Charges should be only for actual power used. We are pursuing these discussions vigorously.
A few weeks ago, I observed that ultimately the solution to this electricity problem lies in paying realistic tariffs. The cost of running generators has brought this forcibly home to all of us. By realistic tariff we mean a tariff which allows producers to cover the cost and thus encourages continuous investment. I wish to add that this is best achieved by regular review of the tariff in small changes rather than sudden large jumps. For industry the appropriate model would be the one used for petroleum products.
Permit me to say a few words to the management of Ghacem. I congratulate you for taking this bold step to bring in these generators expecially so promptly after the meeting of your top management with the President of Ghana. The hard words we heard reported on that occasion has made many of us in industry wonder if you had failed to appreciate the gravity of the electricity problem and the critical role the production of cement plays in the development of a country such as ours. May I gently suggest that this may be a time for you to continue increasing the number of Ghanaians in the top echelon of the management of Ghacem. It may help you better appreciate the cultural milieu in which you operate in Ghana.
Finally this crisis may itself present an opportunity for government to nudge companies involved in import and servicing of generators in the direction of local assembly of gensets. Some policy thought in this direction may be worthwhile and bring us some benefit from this crisis.
Once more congratulations, Ghacem, and many more industries follow your example.

I thank you for your attention.