Volta Rejects Killer Tariffs

Some participants at a forum organised by the Public Utilities and Regulatory Commission (PURC) in Ho, the Volta Regional capital, have kicked against the proposed increases in utility tariffs.

The Ghana Water Company Limited (GWCL), the Electricity Company of Ghana (ECG), the Ghana Grid Company Limited (GRIDCO) and the Volta River Authority (VRA) are jointly requesting over 100 percent increment in tariffs.

ECG is requesting a tariff increase from GH¢16.5p to GH¢35.00p per a kilowatt hour (kwh). GRIDCO is requesting an increment from GH¢4.00p to GH¢5.31p while VRA wants an increment from GH¢14.6p to GH¢30.34p. GWCL also appealed to the public to grant their request for an increment of GH¢1.70 to GH¢4.00 per cubic meter of water – thus every 1,000 liters of water.

According to their arguments, should their requests be approved, they would lessen the impact of the high cost of production, reduce the debt stock and make the companies more efficient and effective.

In order to get their message across, the PURC, which is a regulator of the service providers and an intermediary between them and consumers, is holding nationwide public fora on the proposals in order to get a national consensus on the proposed increases.

After the many presentations by the service providers, majority of the participants who took turns to share their views, kicked against any upwardly adjustment of the tariffs. Their reason was that the services of the utility companies are poor, referring to the ongoing nationwide load shedding exercise in the area of electricity supply.

In the case of water, many of the participants complained about the lack of pipe borne water in their various communities. In areas that have water, the supply is mostly inconsistent and in some cases, the water does not flow at all.

In earlier engagements in the Eastern, Central, Western, Ashanti and Northern Regions, the people had also kicked against the proposals.

In the Ashanti Region, barbers and other informal sector workers threatened a civil demonstration if the PURC approved of the upward adjustment of the tariffs.

Despite the opposition by the public, the VRA fears that the country will not be able to enjoy power, should the current situation persist. Mr. Joseph Adokoh, Principal Financial Officer at VRA, said currently 'VRA is operating on debts. We are borrowing to produce power. Without borrowing the many plants and setups cannot run.' He said that VRA's debt had risen from $637 to $1 billion in recent times.

He pointed out that the cedi depreciation by over 100 percent since 2013 had made interest on the borrowing very high.

GRIDCO also believes that with the kind of investments made by the VRA, it was necessary to have adequate transmission infrastructure to match up with the generation capacity.

The PURC promised that the proposals by the service providers would properly be scrutinized to ensure a fair deal for customers.

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From Fred Duodu, Ho