The Africa Center for Energy Policy (ACEP) is calling for a thorough audit of the contract between the Electricity Company of Ghana (ECG) and Hubtel over the design and development of the ECG PowerAPP.
To improve the efficiency of ECG’s digital payment systems, the company awarded a contract to Hubtel to develop an application to replace the old ECG App. In January 2023, the company introduced the new ECG PowerAPP which incorporated digital payment solutions.
But ACEP says after careful scrutiny, they can conclude that the contract is shrouded in too much secrecy and discrepancies.
In a statement copied to The High Street Journal, ACEP revealed that while the contract document received from ECG states that the total cost for the design and development of the platform is GHS 171.8 million, Hubtel after executing the contract stated that the contract cost of developing the system was US$25 million equivalent to GHS 315 million.
“ECG had to outsource the development and maintenance of its payment system to Hubtel. According to a contract received from ECG, the total cost for the design and development of the platform is about GHS171.8 million. Between November 2022 and December 2023, the cumulative service charge was over GHS100 million. In addition, Hubtel will be paid 0.95% of all revenues collected as service charges. At the time of contract execution, GHS75 million had been paid to Hubtel on the framework cost,” ACEP revealed.
The energy policy think tank added that, “this information in the contract contradicts information Hubtel has communicated on its proceeds from the agreement. On March 28th, 2024, eight days after the contract was executed, Hubtel published the cost of developing the payment system at US$25 million (GHS315 million), of which US$12 million (GHS151 million) had been paid.”
In addition, ACEP says it cannot fathom why ECG abandoned its internal capacity to build on its already existing ECG app and outsource the development of a new app at an exorbitant cost.
ACEP further states that certain aspects of the contract that give Hubtel the authority to control “all revenues collected until such a time it is disbursed to ECG” undermine the current cash waterfall mechanism.
Given these discrepancies, ACEP is calling for a thorough audit of the contract by the Public Utilities Regulatory Commission (PURC) to clarify issues.
“PURC should immediately audit the Hubtel contract and verify all the payments made to the company to assure value for money for the country and clarify discrepancies in cash values reported by Hubtel and ECG,” the statement signed by Policy Lead, Petroleum & Conventional Energy, Kodzo Yaotse of ACEP demanded.
