Befesa Desalination Plant drains Ghana Water of $1.42m monthly – TUC
The Trades Union Congress (TUC) says an agreement between Befesa Desalination Plant and the Ghana Water Company is an albatross, which is draining $1.42 million from the Water Company every month.
The TUC has also proposed a further reduction of electricity tariff by 15 per cent and a reduction in water tariff by 12 per cent.
This, the TUC said in a statement, copied to the Ghana News agency, would stimulate economic growth that could lead to increased job creation.
It stated that the Befesa Desalination Plant, which was commissioned in 2015, on the basis of a Build, Own, Operate, Transfer Water Purchase Agreement between the Ghana Water Company Limited and Befesa Desalination Development Ghana Limited, had become a big financial drain on Ghana Water Company Limited.
It said the agreement was an albatross, which was draining the GWCL of $1.42 million every month in capacity charge alone, adding that, the cost of operating the Befesa Desalination Plant must not be passed on to consumers.
“In 2019, it is expected that the price of fuel and natural gas will reduce and inflation is also expected to decline to a single digit and the value of the Ghana cedi is expected to be stable,” it added.
It also called for prudent and efficient management in the operations of the utility companies to reduce cost because there were still inefficiencies in the utility sector, it believed, that were being passed on to consumers.
“We expect PURC to provide consumers with its regulatory benchmarks for efficiency to convince us that the operational costs of utility companies are in line with the standards of best practice,” it said.
It raised issues about the excess capacity of the Independent Power Producers, saying the consumer should not be burdened with the payment for excess capacity.
“It is very unfair to pass on the cost of excess capacity to consumers, especially working people, whose wages and salaries do not match the rate of increase of electricity tariffs,” it said.
It stated that the government had promised to review the Power Purchase Agreements, but they were not aware of any practical steps toward the review, most of which were signed under emergency conditions that could hardly pass the transparency and ‘value for money’ tests.
The TUC said the government, Power Distribution Services of Ghana Limited and the ECG signed transaction agreements, which had been ratified by Parliament.
It said the status of ECG as an electricity distribution company would, therefore, change to an asset owner and a bulk energy trader from February 1, 2019.
Consumers, it said, were yet to be informed of the effects of such major policy change in the electricity distribution on electricity tariff.
“The Union is urging PURC to ensure that this arrangement will not lead to higher tariffs,” the TUC said.