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Tariff hikes: We want water up by 334%, electricity by 148% – GWCL/ECG to PURC

Ecg

Tariff hikes: We want water up by 334%, electricity by 148% – GWCL/ECG to PURC

Management of Ghana Water Company (GWCL) has proposed to the Public Utilities Regulatory Commission (PURC) increase water tariff.

Whereas GWCL has proposed to the PURC 334%, the Electricity Company of Ghana (ECG) wants 148% upward adjustment in tariff.

The GWCL in its proposal said over the years, the approved tariffs have not been full cost reflective.

This has led to the inability of GWCL to raise enough revenue to finance the much needed capital investment projects, with a consequent unsatisfactory level of service, the company said.

“Among the urban poor, water can be a critical resource in short supply. GWCL has therefore set up a Low-Income Customer Support Department (LICSD) to deliver improved services to targeted low income urban poor areas.

“The Government of Ghana is committed to expanding access to safe water supply services in urban areas with particular focus on improving water production and expansion of distribution systems and ensuring sustainable financing of the sector. It is estimated that about $2billion will have to be invested in water production to help increase current urban coverage to 100% country-wide by 2025.

“Notwithstanding the challenges mentioned above, it is important to consider the broad sectoral focal areas that impact on water operations. These include sustainable water sources, access to potable water, sustainable financing, improved public private partnerships, capacity building, good governance, good research and development, monitoring and evaluation, water safety and customer interest/education.

“GWCL therefore has embarked on an image redeeming mission, for transformation into a ‘world class utility company’. We therefore call on our Regulator, the PURC, to provide every necessary support to enable us turn things around,” the proposal said.

It added “Like any utility, GWCL is expected among others to: Provide services that are safe, desirable, and affordable to consumers; and Ensure an institutional and commercial system capable of recovering costs.

“GWCL must at least recover its costs if we are to sustain our operations. Over the years, however, the approved tariffs have not been full cost reflective. This has led to the inability of GWCL to raise enough revenue to finance the much needed capital investment projects,
with a consequent unsatisfactory level of service.

“Below are some major issues which have prevailed since the last tariff adjustment, and which have necessitated this review. Inadequacy of tariff to carry out urgent repairs of assets and minor extensions Unlike the previous years where the Automatic Tariff Adjustment Formula (ATAF) has been applied every quarter, PURC has not applied it for some time now.

“In real terms the average tariff per cubic meter in 2019 was USD 1.27, but has reduced to USD 1.13 as a result of the cedi depreciation over the period as shown in the figure below.

“This has affected our ability to carry out repairs and replacement of aged and obsolete equipment and pipelines, and other critical assets as would be expected and has given rise to high levels of NRW. As part of this proposal GWCL has included measures to reduce NRW for the consideration of PURC.

“The PURC should also play a significant role in making water services available to low income dwellers in the country through the review and approval of a ‘GWCL Low Income Distribution Extension Fund’. The terms which should cover this arrangement would be that GWCL shall extend pipelines to low income communities and new consumers”.

Ecg

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