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02.04.2007 General News

Electricity tariffs to rise 400 percent

By s at the Vo1ta River Authority say that tariffs could go up by as much as between 400 and 500 percent in the next couple of months.

The power crisis would not be met any time soon

The indications are that even if government manages to get its act together and facilitate the generation of adequate power, Ghana would be hit by a new kind of crisis.

Energy experts say that in the short term, improvements in hydro generations are not possible and therefore Ghana will have to look to increasing thermal generation as a short term measure.

However a switch from hydro generation to thermal generation comes with significant cost implications which would lead to tariff adjustments.

Sources at the Vo1ta River Authority say that tariffs could go up by as much as between 400 and 500 percent in the next couple of months.

This would significantly alter the cost structure of industry and commerce and could lead to general price increases and the mass retrenchment of labour.

An expected outcome of the tariff increase would be a substantial loss of revenue to government with very dire consequences for the national development effort.

Politically, it could substantially damage the New Patriotic Party's (NPP) chances of getting re-elected.

Already, the VRA is indebted to the tune of US $535 million and may have difficulty raising the financial resources to bring in crude 0il for thermal generation.

Source: The Insight

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