25.06.2006 Business & Finance

Govt considering bailing out distressed utility companies

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Akosombo (E/R), June 24, GNA - Government is considering writing off the debt owed to it by utility companies to help enhance their operations and ensure the rendering of effective service to the public. Dr Anthony Akoto Osei, Deputy Minister of Finance, who disclosed this, said however that the relief would only be granted when the management of the utility companies demonstrated good performance and improved service delivery.

He underscored government preparedness to change the status of the utility companies through investment into infrastructure and equipment to enable the country to accelerate economic growth and enhance the standard of living of the people.

"The government has amply shown this through increased financial outlay and investment to the utility companies in recent years," Dr Osei said at a Ministerial and Parliamentary retreat organized by the Public Utilities Regulatory Commission to discuss the "State of The Utilities and the Role of PURC in the Delivery of Quality Service". He said, while the government would help the companies to revive their operations, this would however, not be done through subsidies or increased tariff adjustment.

"The only way to ensure that the companies return to profit and deliver effective and efficient service to the client is through good management and that part of the contract is essential for the managers to deliver on," he said.

Mr. Hackman Owusu-Agyeman, Minister of Works and Housing and Water Resources, said the current state of disrepair of the utility companies was making it difficult for them to deliver on their mandate. He said the infrastructure had crumbled and in urgent need of repair, adding that government was tackling the problem through huge investment in the water and energy sector. The Minister cited the over 120 million dollar investment in water systems.

Mr Owusu-Agyeman asked the management of the utility companies to live up to their responsibilities, especially relating to monies owed to them.

It is estimated that customers owed the Electricity Company of Ghana over 1.3 trillion cedis as at the end of 2005. He asked the PURC to embark on public campaign to educate the public to frown on illegal connections and get saboteurs to be arrested and prosecuted. Mr Kwame Pianim, Chairman of the PURC, said to enable the utility companies to deliver on their mandate, government needed to invest 300 million dollars annually for the next five years to revamp them to provide efficient service. Issues being discussed include activities of the PURC, the state of the utilities and the delivery of quality service, prudent and efficient cost recovery practices by utility companies and boards and the tariff structure and the equitable distribution of utility services.

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