We Can’t Reduce Tariffs — PURC

The Public Utilities Regulatory Commission (PURC) says it has no plans to review downwards water and electricity tariffs to meet the demands of organised labour.

The Director of Public Relations and External Affairs of the commission, Nana Yaa Jantuah, told the Daily Graphic yesterday that any further reduction could cripple the utility service providers and lead the country back to the era of load-shedding.

Reacting to organised labour’s threat to embark on a nationwide strike if the government and the PURC did not reduce the recently announced tariffs, she said, “If we are going to reduce, we are going to be doing load-shedding.”

She said instead of the proposed 150 percent increase on electricity, the commission settled on 78.9 percent.

Organised labour expressed discontent with the increment in utility tariffs — 78.9 percent for electricity and 52 percent for water —and so on October 8, 2013 gave the government a 10-day ultimatum to review the tariffs or face a nationwide strike.

To address the concerns of labour, the government established a technical committee led by the renowned economist, Dr Joe Abbey, to review the tariff hikes.

A day before the expiration of the ultimatum, organised labour, at a crunch meeting, announced a suspension of the strike until the report of the committee was released. It, however, urged workers to put on red armbands and fly red flags at their workplaces.

With the report submitted to President John Dramani Mahama warning that a 50 per cent increase in tariffs was not sustainable, organised labour appeared to have been tickled on the wrong side.

Using different scenarios to arrive at its position, the technical committee had indicated that if the base tariff of 60 percent was adopted, it would be necessary for a higher adjustment over the next five quarters in order to eliminate the deficit on the budget.

But the TUC had no ears for the proposal of the committee.

“After a thorough examination of the TWG report, we have come to the conclusion that none of the scenarios presented in the report addresses the concerns of organised labour,” a statement issued by labour groups said.

It, therefore, rallied all workers, both in the formal and the informal sectors, to lay down their tools and stay at home on November 18, 2013.

Before that, organised labour had issued a directive to all labour groups in the 10 regions to convene meetings to plan and stage demonstrations in all the regional capitals before the day of the strike.

This is not the first time the TUC has used these tactics to force the PURC to reduce utility tariffs considered to be on the high side.

In May 2010, the PURC announced an 89 percent and a 36 percent increase in electricity and water, respectively, but the TUC, breathing down heavily on the government, forced a downward review.

But a not-so-enthused Ms Jantuah said, “If two bodies are saying the same thing, why then do you say you’ll not agree? They (organised labour) were part of the technical committee and if there was the possibility of reducing the tariffs and it was going to help the utility service providers to bring reliability into the system, the committee would have said it.

“If the TUC wants to go on strike, the PURC cannot do anything about it. But our guidelines enjoin us to look at the economic development of this country. Ghana’s economic development hinges on the reliability and sustainability of electricity supply.

“No investor comes into this country and factors into his or her business plan the price for alternative sources of energy,” she added.

Ms Jantuah said for now, the main focus of the PURC was the interest of consumers to ensure that post-tariff billing challenges were resolved.

Days before and after the new tariffs took effect, consumers were up in arms against the Electricity Company of Ghana for arbitrary increases that were more than the tariff increases.

“We want to go on monitoring and checking the kind of software they are using for the meters, the metering system, the way people are inputting the new tariff into the meters and whether the people doing it are knowledgeable,” she said.

“We went to some vending points and got to know that even some of the vendors did not understand how the meters work,” she added.

Source: Daily Graphic