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23.10.2007 Business & Finance

VRA Demands More From PURC

By Daily Guide

The Volta River Authority (VRA) has expressed dissatisfaction over last weekend's 35 per cent tariff adjustment by the Public Utilities Regulatory Commission (PURC).

According to the Chief Executive Officer of VRA, Joshua Ofeide, the 35 per cent upward adjustment would not be enough to support operations of the power-generating company.

The PURC had approved 35 percent tariff increases for electricity and water and according to the utility regulator, the approval was to take immediate effect following requests from the utility companies.

The VRA, the Electricity Company of Ghana and the Ghana Water Company were hoping for between 60 and 100 percent increases.

They had said they needed the adjustments to cater for the increasing cost of power generation and to improve their service quality.

The VRA especially was insisting on a full cost recovery in the energy sector on the back of the recent energy crisis in the country. But the PURC said it hoped the new tariffs would kick-start the process towards full cost recovery.

Mr. Ofedie said the VRA needed a 100 per cent tariff increment to enable his outfit embark on a vigorous project to augment the country's energy capacity programme.

It had almost completed the installation of a 126 megawatts (MW) emergency power plant as part of government efforts to make up for the shortfall in the energy sector. Additionally, the VRA wanted to acquire adequate plants to increase its energy generating capacity.

Even before the full cost recovery programme begins in the energy sector, the ECG had begun replacing old electric meters with new prepaid meters as part of the realistic payment of tariffs that it had been calling for.

CITY & BUSINESS GUIDE reported last week that the ECG had began replacing old electric meters with new ones at Laterbiokorshie, Korle Bu, Mamprobi, Zabon Zongo, Abossey Okai among others in the Accra Metropolitan area.

In a related development, the Association of Ghana Industries (AGI) has welcomed the new tariff adjustment, urging its members to redesign their operations in order to avert any high cost of production.

The AGI said the move would help attract private sector operators into the sector, which would mean the nation would have adequate energy especially for industries.

Meanwhile, individual consumers have expressed worry over the tariff increment insisting that the 35 per cent rise is too astronomical.

A cross- section of Ghanaians that CITY & BUSINESS GUIDE spoke to criticized the government for not absorbing some of the tariff hikes.

“How can tariffs be increased; coming immediately after the energy crisis?” Kwesi Amoako of Kaneshie questioned.
“We plead with government to do something about it,” Michael Lartey of Abeka lamented.

Others also called for total withdrawal of the tariff adjustments.
Government had declared its intention to implement full cost recovery programme in the energy sector.

Recently, the Minister of Energy, Joseph Kofi Ada said good pricing policy was significant to the survival of the utility sector, not forgetting its effectiveness.

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