ECG busted in GH¢221.1m contracts without PPA approval

The Auditor General has indicted the Electricity Company of Ghana (ECG) for breaching Public Procurement Authority rules governing single source procurement.

GH¢221.1m single source contracts

According to the Auditor General’s report for 2021, ECG used single source to procure items to the tune of GH¢221.1 million (GH¢221,152,473.98413) without recourse to the Public Procurement Authority.

This is contained in the Report of the Auditor-General on the Public Accounts of Ghana – Public Boards, Corporations and other Statutory Institutions for the period ended 31 December 2021.

The report signed by Johnson Akuamoah Asiedu Auditor-General and submitted to Parliament and published on the website of the Audit Service is dated June 1, 2022.

Section 40 of Public Procurement Act

Section 40 of Public Procurement (Amendment) Act, 2016, (Act 914) requires procurement entities to obtain the approval of the PPA when it becomes necessary to apply direct sourcing for goods and services.

All the contracts were awarded in 2019

Despite this clear provision, ECG awarded several contracts in 2019 using single source without approval of PPA.

85 foreign and local orders reviewed

The Auditor General said it reviewed a sample of 85 foreign and local orders for goods and noted that a total amount of the Cedi equivalent of the various procurements largely in Dollar, Euro and Pound Sterling amounted to  GH¢221.1 million (GH¢221,152,473.98413).

Currencies in which the procurement was done

The report gave the breakdown of currencies used in the procurement as $33.8 million   ($33,864,855.98), €945,742.17, £729,161.38 and GH¢5.3 million (GH¢5,373,100.00).

Some of the items procured

Some of the items procured using single source include 33KV polymeric pin  insulator lightning arrestors, plastic cable cover tiles, 11kV polymeric pin Insulators, HRC Fuses, security plastic seals, Pole-mounted transformers, 11kV lightning arrestors, 11Kv dropout fusegear, 33Kv dropout fusegear, silicon insulators, 11KV crossarms, channel crossarms, 33KV galvanzed angle crossamrs, among others.

Others are 11KV galvanized angle crossarms, stay equipment, D-iron, handheld GPS, electrical materials and  equipment, single-phase prepayment meters with enclosures, buar cable test vans, megger cable test vans, emergency shower and eye wash station, two-piece coverall and two- piece coverall etc.

Public Procurement Board

According to the Auditor General, ECG’s Procurement Manual did not demand management to seek approval from the Public Procurement Board before engaging in the single source procurement.

The Auditor General attributed the lapse is to ECG management’s disregard for the country’s procurement laws.

Compromising value for money

The report cautioned that ECG management’s non-compliance with the law could undermine transparency in contract management and compromise value for money.

The Auditor General tasked ECG’s General Manager of Procurement to ensure efficient and effective functioning of the established procurement structures and systems as enshrined in the Public Procurement Act to aid compliance with the provisions of the Act.

The Auditor General further advised management to seek approval from Public Procurement Authority whenever single source methods are to be used

Management of ECG responded that Auditor General’s recommendation is noted and where required, the necessary approvals from the relevant authorities will be sought.