Utilities plead for higher tariffs

Sector institutions under the Ministry of Energy on Friday repeated calls for realistic tariffs for utility companies if they are to remain competitive and cover their operational costs.

This, they indicated, would make them operate efficiently and be in a position not to only pay back loans but ensure that the loans are paid on time.

The institutions are the Volta River Authority (VRA), Electricity Corporation of Ghana (ECG) and Public Utilities Regulation Commission (PURC).

The institutions made this known at a day's Sector Performance Review Monitoring Meeting at Akosombo. Also in attendance were oil marketing companies, Energy Foundation, Tema Oil Refinery, GOIL, GCMC and the GNPC.

Other issues that attracted attention included prospects and benefits of the West African Gas Pipeline Project and development of extra power generating and distribution stations.

Also discussed was the problem of non-payment of competitive rates by domestic users who constitute 50 per cent of power users but do not pay much.

A team from the VRA said exports of power to neighbouring countries have gone down significantly putting returns on investments at zero.

"Profits made over the years have all been eroded, especially on domestic users. For instance, we produce power at 5.1 cents and sell the same product at 2.6 cents. Besides we owe 50 million dollars of power imported from Cote d'Ivoire"

The VRA said a number of expansion projects and equipment upgrading must be made if they are to survive.

Mr. Fred Asante of the ECG also proposed charging realistic tariffs to put the company's operations back on track from more than a decade of loss making.

"We are in the process of replacing our obsolete equipment throughout the country and need consumers to pay realistic tariffs to be able to carry this programme out successfully'', he said.

Mr Asante said ECG last year made a loss of 388 billion cedis, adding that, "factors such as the loss of foreign exchange, inadequate tariff and system losses contributed mmensely to our precarious situation."

On ECG's indebtedness, Mr Asante said, "We owed VRA 390 billion cedis as at the end of March 2001 including a VAT of 88 billion cedis. We also owe our suppliers 138 billion cedis, 870 billion cedis as loans arrears and 195 billion cedis as debt service charges, among others."

He suggested the establishment of special courts to prosecute recalcitrant customers and also make laws to make non-payment of bills a criminal act.