ECG, GWCL proposed tariff increment will compound Ghana’s economic crisis – TUC
The Trades Union Congress (TUC) says the request by utility service providers in the country for increment in prices of electricity and water will compound the current hardship that Ghanaians are going through.
The Union said the proposals, ranging from 37 per cent to 334 per cent, “have a great potential to turn the economic crisis into social and political crisis that will be more difficult to address.”
The utilities explained that the rising prices and the depreciation of the Cedi had increased their cost of operations far above their revenues and needed to undertake critical investments and upgrade of their infrastructure with the proposed increment.
However, the Union said, since the economy had not fully recovered from the ravages of the COVID-19 pandemic, with emerging challenges from the Russia-Ukraine conflict, the upward review of tariff would compound the plight of households who were already suffering from the severe economic crisis.
As such, the Union, which is the largest umbrella body of workers in Ghana, had asked the sector regulator, the Public Utilities Regulatory Commission (PURC), not to grant the request of the utilities until the crisis was over.
The Union said: “In our current economic and social situation, workers and Ghanaians will have very little levers to absorb such shocks. This is not the time for a major review of utility tariffs. Any astronomical increases in tariffs could trigger social upheavals.”
“The major tariff review should, therefore, be postponed until the cost-of-living crisis is over,” it added.
“Rather, what we need are measures that will reduce waste to the barest minimum and infuse efficiency in the operations of the utility companies that will help to sustain them over a long period of time,” the Union noted in its submission to PURC.
It recommended that ECG increased efforts at collecting revenues, stopped illegal connections and closed the gap between its billing and electricity sales, while GWCL should also do more metering and stop charging flat rates.
TUC said it was important for the Government to continue to support the utility companies to undertake some of the critical investments needed to ensure the stability of the electricity and water networks.
It also asked the Government to consider absorbing some of the losses of the utility companies that had come from the current levels of inflation and currency depreciation.
The Government should also ensure a comprehensive review of the 25-year take or pay contract of the Desalination Project, to make it fair to Ghana.
The contract has obliged GWCL to pay Befesa Company Limited $1.3 million every month whether the Company produces water or not.
The Ghana Water Company Limited (GWCL) is seeking an increase in water tariff of 334 per cent, while the Electricity Company of Ghana (ECG) is asking for a 148 per cent increase in tariffs for 2022.
The Volta River Authority (VRA) has proposed a tariff increase of 37 per cent, Northern Electricity Distribution Company (NEDCo), 113 percent, and Ghana Grid Company Limited (GRIDCo), 48 per cent increase in transmission charge.
Meanwhile, PUCR has said that it would protect consumers of electricity and water against the infliction of high tariffs by not transferring losses incurred by the utilities to consumers to worsen their plight.
Dr Ishmael Ackah, Executive Secretary, PURC, gave the assurance, saying: “We sit between the Utilities and the customers, and we want the customers to be happy and pay competitive prices.”
He told the Ghana News Agency that the Board of the Commission would meet on Thursday, June 30 to consider the work done, and do further consultations before announcing the 2022 tariff on July 15.