Tariffs To Rise 25%?   11-Mar-2013

Electricity and water providers in the country have submitted proposals for a 20-25% rise in tariffs in order to revamp their old systems and recover their operational costs. The proposal statements argue that if the service providers – the Ghana Water Company (GEC), the Volta River Authority (VRA), Ghana Grid Company (GRIDCo) and the Electricity Company of Ghana (ECG) – do not get the money they are asking for, the situations with the old systems and operations will only get worse. Some government ministers have expressed support for demands by the utility bodies. Speaking on Citi FM last Saturday, Lands and Natural Resources Minister, Alhaji Inusah Fuseini, who was formerly a Deputy Energy Minister, said the VRA has a case for demanding an upward review of tariffs. However, speaking to The Finder, a source close to the Public Utilities Regulatory Commission (PURC) said the PURC was yet to receive the proposals. According to the source, the commission is unlikely to approve increases in utility tariffs in the short term as it would have to hold stakeholder consultations before approving any such requests. He said the Ghana Water Company loses 45% of treated water currently while about 18-25% of electricity produced by the country’s energy producers is also not accounted for. The PURC believes that it is important to factor in managerial competence and operational efficiencies of the service providers when discussing the price of utility services. The PURC is also insisting that the GWCL, VRA and ECG collect all money owed them by government and private entities. The government is said to owe the Electricity Company of Ghana (ECG) close to US $500 million in bills. On energy, particularly, it was also important to take account of the gas project at Aboadze and the hydro dam at Bui, which will be coming on stream shortly. He said while the country’s current energy requirement is estimated at about 2,975 megawatts of power, current production capacity of the power produced is around 1,600 megawatts daily. The Bui hydro dam, expected to be completed by the middle of this year, is expected to add 400 megawatts of power while the Ghana Gas Company, expected to provide gas to the Aboadze thermal plant, is expected to add over 100 megawatts of power to the total. According a source, the main concern of the PURC in its dealing with utility providers is to protect public interest by ensuring quality of service by providers.