Calls for utility tariff increment justified – CUTS International

CUTS International Accra, a research and public policy think tank focused on consumer sovereignty says calls for increased tariffs by utility companies are justified and must be considered.

Its Executive Director, Appiah Adomako said without an adjustment in tariffs, the operations of the utility companies may grind to a halt.

Speaking on The Point of View on Monday, he said while increasing tariffs may strain the finances of consumers, the prevailing situation of the utility companies and related factors on the market makes it necessary.

According to him, since products required for the operations of the Ghana Water Company Limited and the Electricity Company of Ghana are imported, the depreciation of the cedi among other factors has increased the cost incurred by the companies to discharge their services.

He said holding back ECG and the Ghana Water Company from increasing the tariffs will deprive them of the needed investments.

“We can’t be irrational because most of the thing ECG uses, it imports them; crude oil is being imported with all the dollar and exchange rate issues. If you don’t permit the utility companies to increase their prices, there wouldn’t be the required investment that will help keep the system running, so one day we will suffer a situation where electricity goes down. There will not be any incentive for investors to come into the sector, especially the Independent Power Producers,” he argued.

As many Ghanaians continue to grapple with the rising cost of living in the country, utility companies have indicated their resolve to push for increased tariffs as well.

ECG, for instance, is making proposals for tariffs to go up by 148% while the Ghana Water Company Limited is pushing for a nearly 326% hike in tariffs.

Some have described the proposals as outrageous, but according to Appiah Adomako, they are justified.

“I support the principle that tariffs need to go up so the ECG can go on with its mandate. The water company buys chemicals and these are imported. Exchange rate, freight and the cost of the items themselves have also gone up, so we need to allow them to get some increment so that the business is sustainable,” he said.

He was, however, optimistic that the percentage increment would be far less than requested to ensure that consumers are not overly burdened.

“PURC will look at them. If you look at the historical data, PURC will give them not more than 50% of their request,” he noted.

SOURCE CITINEWS