PURC Unlikely To Grant Utility Companies 300% Price Hike

The Public Utilities Regulatory Commission (PURC) has served notice that electricity and water tariffs would go up soon but it may not grant the 300 per cent increases being demanded by the three service providers.

Mr. Stephen Adu, Executive Secretary of PURC, told the GNA That the proposed percentage increase being demanded by the Volta River Authority (VRA), Electricity Company of Ghana (ECG) and Ghana Water Company Limited (GWCL) is an unrealistic. He, however, declined to say by what per centage the new tariffs for water and electricity would go up.

"The two utility companies (ECG and GWCL) would have to reach their targets through a gradual approach ... in view of pertinent issues such as wages of Ghanaian workers and the poor quality of services," he said. Mr. Adu said the PURC had been considering granting GWCL and ECG tariff increases before the submission of their proposals.

"What we are trying to do now is to set targets for them in the area of quality of service which we will monitor periodically. We will then match subsequent tariff increases with improvement in quality of service before fine-tuning the figures for adjustments," he said.

VRA, the sole body that produces electricity in the country has warned that it faced imminent collapse unless consumers paid realistic tariffs. It said the company is in a deep financial crisis as tariffs are only a fraction of the cost of production of electricity and urged the PURC to award it a steep tariff increase from 95 cedis a unit to 432 cedis to save the situation.

VRA owes about 34 million dollars to Cote d'Ivoire from whom it buys power during peak periods, especially from 1800 to 2200 hours, and in times of crisis. It also owes commercial banks millions of cedis used to purchase fuel to operate the Takoradi thermal plant. In the meantime, ECG owes it a whopping 325 billion cedis.

The GWCL also said the tariffs paid by consumers are only a fraction of cost of production and needs the money to improve on its performance. However, government officials have been demanding a commitment from the utility companies to improve on their performance and cut down on waste.

Government last week gave a 24-hour ultimatum to the public utility companies to furnish it with a program of action to improve on the quality of services before considering any upward adjustments of tariffs.