POWER GURUS PLEDGES COMMITMENT TO LOCAL CONTENT

The Volta River Authority on Monday, December 17, 2012 organized its 2nd Local Content Stakeholders’ Forum at the Movenpick Hotel on the theme: “Promoting Local Content Development in the Power Utilities and Related Industries in Ghana – Achievements and Sustainable Initiatives.”

Speaking at the function, Chief Executive of VRA, Mr. Kweku Andoh Awotwi indicated that the forum aimed at providing a guide to promoting the adoption of local content in the power utility companies in Africa. He called on all stakeholders to join hands in a concerted effort to bring together the fragmented policies in the various sectors into a national policy to enhance participation of local businesses.

According to Mr. Awotwi, the VRA Local Content policy stipulates that all energy stakeholders and regulatory authorities should increase local labour, goods and services in the delivery of infrastructure projects in the country. He therefore urged governments of the developed countries to review the policy issues of tying bi-lateral assistance to developing countries to the purchase of goods and service from the donor country. He explained that such bilateral arrangements negated the recommendations from the Organization for Economic Cooperation and Development/Development Assistance Committee (OECD/DAC) to unite aid as spelt out in 2001.

The VRA Chief further called for a review of the high fixed cost of access (regulation and prequalification costs), high costs of tender information, the policy of ‘bundling’ contracts which favours large firms, and financial constraints. He added that “the exemption of foreign contractors in construction markets in Africa from paying VAT and other taxes, and access to cheap financing from state-owned banks should be waived to promote competition between the local and foreign enterprises. He cautioned that, “Unless the challenges are addressed satisfactorily, enterprises in Ghana and other developing countries will be at a disadvantage against international companies. The playing field needs to be tilted to favour the weaker side. “

On his part, Mr. Charles Darku, Chief Executive Officer of the Ghana Grid Company (GRIDCo) indicated that in taking advantage of local content policy, the level of Ghanaian ownership should be an important factor for the award of contracts. He suggested that the domestic contractors should also demonstrate a beneficiary interest of more than 30%. He disclosed that to support the local content agenda, GRIDCo will award contracts among ten local companies and develop them in the businesses of substations and transmission line works.

The Director of Customer Services of the Electricity Company of Ghana, Dr. N.K. Smart-Yeboah affirmed that the ECG has incorporated over 500 contractors and communities in its operations and will continue to build on the relationship and existing number. He stated that all ECG’s procurements involving World Bank and other bilateral sources, have always lived by the application of the local preference margin as regulated by the Procurement Law to assist the local companies.

He expressed gratitude to the VRA for setting the benchmark, and providing an opening for all major organizations and institutions to fight for the success of the local content development policy through such fora.

Over 60 institutions and organizations participated in the forum.