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19.10.2007 Business & Finance

Full Cost Recovery Programme Begins?

By Daily Guide

Even though the Public Utilities Regulatory Commission (PURC) is yet to announce a new tariff adjustment, the Electricity Company of Ghana (ECG) and the Volta River Authority (VRA) seem to have begun the full cost recovery programme in the energy sector.

CITY& BUSINESS GUIDE can confirm that the ECG had begun replacing old electric meters with new prepaid meters as part of preparations for the realistic payment of tariffs programme.

The move also suggested that consumers would have to conserve the energy they used to avert over-consumption of electrical energy.

Areas such as Laterbiokorshie, Korle Bu, Mamprobi, Sabon Zongo, and Abossey Okai among others in the capital, Accra had begun experiencing this new shift by the ECG and the VRA.

The ECG was expected to extend the programme to other parts of the capital before proceeding to the other regions.

Recently, both the Volta River Authority (VRA) and the Electricity Company of Ghana (ECG) petitioned the PURC to increase electricity fee by 100 per cent in order to ensure efficient operations of the two companies.

The decision was also to assist the two companies procure adequate infrastructure to augment the already existing ones.

The subject of payment of realistic tariffs or full cost recovery programme had been ringing a bell for sometime now because of the just-ended energy crisis that engulfed the nation.

Government seemed to be backing the idea, and at a recent press conference, the Minister of Energy, Joseph Kofi Ada said government was not going to influence the PURC's decision in announcing a new tariff adjustment for the utility sector.

According to him, good pricing policy was significant to the survival of the utility sector.

In June this year, government abolished tariff absorption for industries which the Association of Ghana Industries (AGI) accepted saying it would help attract private sector operators into the sector.

Other private sector bodies such as the Private Enterprise Foundation (PEF) as well as the Institute of Statistical, Social and Economic Research (ISSER) had also called for deregulation of the electricity sector as pertains in the oil sector to ensure a fair adjustment in terms of tariffs.

By Charles Nixon Yeboah

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