The study was conducted on the argument that the working relationship that partners develop would define them as either ‘collaborative’ or ‘exchange’ and consequently demonstrate their ability to reach stated goals. The Theory of Collaborative Advantage by Vangen and Huxham (2010) which postulates that there should be more than just exchange in a partnership to achieve stated goals therefore guided the conduct of this study. The study in this regard adopted the Theory of Collaborative Advantage as it describes how the relationship between partners influences the extent to which they attain their objectives. Another justification for the use of the theory is because of the perceived benefits that accrue from partnerships that individual organisations cannot achieve without joining forces with others. The elements of partnership functioning adopted from the theory that define the characteristics of the partnership understudy include; formulation and working towards mutual goals, existence of partnership trust and mutual resource contribution (adopted from the Resource Dependence Theory). From these elements, an effective partnership (with collaborative features) would exhibit partners who are committed to stated goal through the type of managerial practices they adopt in working together, high level of partnership trust to enhance resource expansion and mutual relational power to ensure partnership stability.
Formulation and Working Towards Mutual Goals 7.4.1
Findings from the study supported the assumption that, frequent communication and flexible
relationship between partners may clarify individual differences and may enhance the achievement of mutual goals. The multi-level strategy of communication and the regularity
with which meetings occur between principal partners at ECG, Sunon Asogli and CENIT Energy, as well as other public actors from the Ministry of Energy, the PURC and the Energy Commission ensures familiarity with stated goal. The formal relationship between ECG and IPPs however emanates from the dictates of the Power Purchase Agreement and ensures adherence to contractual obligations. Nonetheless, the support shown by both public and private actors (the partnership and the national levels) in the attainment of individual organisational goals enhances their commitment to achieve partnership goals as they identify with the goal and work towards it.
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Existence of Partnership Trust 7.4.2
Despite the show of commitment by private partners (Sunon Asogli and CENIT Energy) to achieve partnership goals, their low confidence in their principal partners at ECG makes them uncertain of future investment to expand electricity generation capacities to meet stated goals. Currently, Sunon Asogli and CENIT Energy bear financial risks due to payment inconsistency by ECG. In this regard, findings from the study affirmed the assumption that, consistent
meeting of expectations reinforces trusting attitudes and enables partners to move from low risk ventures to more ambitious ones. To warrant further resource contribution by IPPs to
attain the stipulated goal of 5000MW therefore, partners at ECG must consistently meet financial expectations to enhance trust. To reiterate a comment by an official at CENIT Energy, his organisation would not expand ‘…not until we are sure of an off-taker that
guarantees us payment…’
Mutual Resource Contribution 7.4.3
Apart from the low level of trust by partners at Sunon Asogli and CENIT Energy which is inhibiting the expansion of their generation facilities, the unequal relational power that exists in their partnership with ECG threatens the stability of their venture. The monopolistic nature of ECG serves as its main strategic advantage in the partnership thus, unthreatened by retaliations in the failure of meeting payment obligations. More so, without financial guarantees from the government, Sunon Asogli and CENIT Energy remain at a disadvantage because they have invested in power generation and need to recoup their profits, hence, they constantly endure the non-fulfilment of payment obligation by ECG. The assumption that
strategic resource contribution influences the level of interdependence between partners which in turn influences power relations and its impact on partnership stability and success is
therefore supported by the study findings. This is to mean that, in the absence of other viable off-takers (potential buyers of electricity) in the power sector, ECG’s largest market remains its strategic resource contribution to the partnership and utilises it as its source of advantage to retain more resources (generated power and finances) from these IPPs. Findings therefore suggest that, if these private partners had an option, they would be in other profitable partnerships other than with ECG, thus the stability of the partnership to meet target goal cannot be guaranteed.
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Table 6: SUMMARY ON PARTNERSHIP PRACTICES AND EFFECT ON ATTAINMENT OF PARTNERSHIP GOAL
The Theory of Collaborative Advantage (Themes)
Variables Major Findings
Mutual Goals Formulation and Working Towards Mutual Goals
Network approach (involvement of both public and private actors) to decision making at the national level enables better coordination of sector activities (such as information on fuel availability for generation stations by which actors take prompt actions to forestall unanticipated power outages) and enhances commitment of partners
to achieve government’s goal of improved electricity delivery
Trust Existence of Partnership Trust
Trust by IPPs in their partners at ECG is low due to the latter’s inconsistency in meeting payment obligation for services provided. In the absence of effective risk mitigation measures to secure IPPs investment, further resource contribution by IPPs to meet
the 5000MW target of government is contingent on the enhanced credibility of ECG in making prompt payment for
services provided
Resource Dependence Mutual Resource Contribution
ECG’s monopoly in electricity distribution serves as its strategic contribution to the partnership as IPPs
have limited options in selling their services. Unthreatened by sanctions due to its monopoly, ECG withholds more resources from IPPs (generated power and finance), thus creates a situation of dependence asymmetry in which IPPs contribute more than they gain. This ultimately jeopardises the stability of the partnership in attaining
the 5000MW goal of government
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7.5 POLICY IMPLICATION OF STUDY FINDINGS
This study from the beginning made an assertion that, the current state of electricity deficit (challenges) in Ghana has created an appropriate time for rigorous research to identify relevant policy areas that need to be given attention. This study consequently focused on examining the working relationship between IPPs and their public partners and how it enhances the achievement of the target goal of 5000MW of generation infrastructure. Findings from the study suggest that, even though there is commitment by partners by virtue of the involvement of various sector actors in decision making, the low level of trust and unequal relational power between ECG and IPPs impedes on the attainment of this goal. In the absence of such collaborative features as enhanced trust and mutual relational power therefore, the partnership demonstrates characteristics of ‘exchange partnership’ with traits of high alertness on guarding against opportunistic behaviour and the uncertainty of transactional costs. Consequently, the goal of government to achieve 5000MW remains unrealistic and unpredictable as current IPPs are unwilling to expand generation capacities, and also because potential IPPs are unable to start production due to the prevailing financial challenges of ECG.
The contribution of this study to the discussion of PPP in the power sector of Ghana therefore is that, it has highlighted the major threat to the partnership as the nonfulfillment of contractual obligation by ECG which severs trust with existing IPP partners. Another challenge of the partnership is the unavailability of gas for operations by IPPs. However, the study opines that, since government is making efforts to ensure adequate gas supply especially with the discovery of oil and gas reserves in Ghana, the relational challenge of partners remains the major threat to the attainment of goals. Overall, this study accentuates a remark by a concept paper of the Ghana Millennium Challenge Account Program-Compact II (2012:1) that, “investment in infrastructure alone will not produce the desired improvement in reliability of electricity supply, without measures to increase the operational efficiency of the operating entities in the power sector, in particular ECG, to increase the creditworthiness of these entities, and thereby attract private capital to the power sector”. In other words, even though the problem of the sector has been named as power generation deficit, which necessitates the operations of IPPs, a chunk of the challenge is the inefficiency of the distribution system operator (ECG). Thus, as government fashions strategies (regulatory frameworks and incentives) to attract private investment, there ought to be equal attention to
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strengthening the institutional capacities of its agencies (especially ECG) to complement the efforts by IPPs.
The study has underscored the significance of the ‘network approach’ in decision making comprising both public and private actors at the national level, which is in consonance with effective partnership practices. This, the study argues consolidates commitment to work towards target goal. However, to translate this positive attribute into achieving substantive gains in expanding power generation, the practice of collaborative partnership requires partners at ECG to consistently meet payment expectations by IPPs to gradually gain their trust, and consequently, contribute more resources into expanding their power generation facilities. In the presence of trust, ECG’s monopoly in the power industry may not be a threat to the partnership as there is mutual fulfillment of expectation, thus, reduced sense of investment risks for IPPs.
7.6 LIMITATIONS OF THE STUDY AND IMPLICATION FOR FUTURE