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Utility Tariff Increase: No Consensus Yet   
 
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12-Aug-2013  
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The announcement by the Public Utilities Regulatory Commission (PURC) that consensus had been reached for tariff increases has been rebuffed by some major stakeholders.

The Association of Ghana Industries (AGI), the National Democratic Congress (NDC) and the Progressive People’s Party (PPP) said they had not reached consensus on the issue and, therefore, advised the PURC to tread cautiously.

The New Patriotic Party (NPP), however, believes that without any prudent economic management, the poor consumer would be made to make unnecessary sacrifices.

Background

Last week, the PURC indicated that it would soon announce an upward adjustment in electricity tariffs. That, it said, followed a general consensus that had been reached among stakeholders for the commission to grant tariff increases.

In June, this year, the PURC met with representatives of four political parties as part of its consultation process, but all the four kicked against the high tariff proposals of the utility companies, saying their arguments were not convincing enough for upward adjustments.

At a stakeholder consultative meeting on the 2013 major tariff review process, organised by the PURC, the representatives of the NDC, the NPP, Convention Peoples Party (CPP) and the Peoples National Convention (PNC) said they did not understand the basis for such big tariff demands.

Stick to automatic adjustment—AGI

But the AGI said it was yet to conclude discussions with the PURC on the rate of increase for the utilities.

“In principle, we are not against tariff increments. What we are against is the amount they are requesting for,” the Executive Director of AGI, Mr Seth Twum-Akwaboah, told the Daily Graphic and reminded the PURC of its agreement with the AGI to announce any upward adjustment after the two bodies had reached consensus.

The AGI has a membership of more than 1,200 businesses.

Mr Twum-Akwaboah said the AGI was advocating an automatic adjustment of tariffs so as to insulate industries from the stress that a one-time increment brought to their operations. “The tariffs can be adjusted gradually instead of waiting for a whole year to increase it by over 100 per cent. That affects businesses a lot,” he added.

He also said the association took cognisance of the fact that whenever there were changes in exchange rates, hydro/thermal mix and upsurge in crude oil prices, the PURC was mandated by law to come out up periodically with new tariffs.

Mr Twum-Akwaboah, however, said it was important that the PURC stuck to the automatic tariff adjustment, since the resort to one-time increases, impacted negatively on members of the AGI.

Improve services before any increases - NDC

The NDC, in justifying its kicking against any move by the PURC to increase tariffs for the utility companies, argued that Ghanaians had, over the years, been lured into believing that if they “pay realistic prices”, service would improve, only for them to “enjoy bitter and worse services after paying the so-called realistic prices”.

Mr George Lawson, a Deputy General Secretary of the NDC, stated that the party would not support any tariff hikes until the utility companies had improved the quality of their services. He wondered why after years of paying realistic tariffs, customers continued to endure days of power outages and water shortages.

“It is unacceptable that when outages and shortages occur, the onus falls on the consumer to find out why and not the utility explaining the situation to consumers”.

Mr Lawson also said not until the utility companies improved their services and customer relations, the party would not support any tariff increases.

NPP blames woes of utilities on bad economic policies

The Communications Director of the NPP, Nana Akomea, described the issue as a “Catch 22” situation. He said the situation where consumers were asked to pay realistic prices before they got quality service needed to be looked at.

He added that most of the inputs for the utility companies were imported and that anytime the cedi depreciated against the dollar, the companies required additional resources to purchase such inputs.

Nana Akomea also said it was incumbent on the government, therefore, to get the economic conditions right, since those factors affected everything.

PPP — The Ghanaian is overburdened

For its part, the PPP stated that the party had not been part of any consultations with the PURC and made it clear that the party was against any hikes in utility prices. The party’s Secretary-General, Mr Kofi Siaw Asamoah, was of the view that the utility companies were trying to pass on their inefficiencies and incompetencies to consumers.

Mr Asamoah said until the utility companies justified shortfalls in revenue, especially those resulting from revenue generation and theft, there would be no justification for the increases.

 
 
Source: Daily Graphic
 
 

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