Utility tariffs to undergo modest reduction

Utility tariffs in the country are expected to undergo a downward review following the presentation of a report by the technical committee set up by the government to consider concerns raised by the consumers.

The report of the committee was presented to the Vice-President, Mr John Dramani Mahama, at the Castle, Osu, Friday.

Although the contents of the reports were not made available, Daily Graphic information has it that the Vice-President will formally announce details to the press on Monday.

A source said all the stakeholders were satisfied with the agreement reached and had appended their signatures, stressing that the reduction would give some relief to utility consumers.

A meeting between Vice-President Mahama and executives of labour and industry last month decided that a technical committee be formed to deliberate on how much increase in utility tariffs was reasonable.

The Ghana Trades Union Congress (GTUC) and the Association of Ghana Industries (AGI) have, since May 2010 when the Public Utilities Regulatory Commission (PURC) announced hikes in electricity and water tariffs, condemned the increases, explaining that they posed a serious threat to the survival of industry and jobs.

While calling for the suspension of the new tariffs, they also threatened demonstrations to back their demand. Following the development, the government urged the PURC to meet with stakeholders and agree on a common ground.

The source said notwithstanding the downward review, the PURC would, in October this year, take a second look at the tariff regime when the West African Gas Pipeline was expected to come into operation.

It said with the commencement of the Asogli Power Plant, substantial increases would be made in energy generation and supply at a relatively cheaper cost.

The source emphasised that the VRA had been facing significant financial difficulties following the failure of the previous government to fulfill its promise to absorb the 35 per cent increase in electricity tariffs announced by the PURC in 2007.

“The failure of the previous government to live up to its promise to absorb the 35 per cent increase in the utility price in 2007 has eroded the working capital of the VRA,” the source stressed.

Source: Daily Graphic/Ghana