CUTS International justifies calls for review of utility tariffs

Think tank, Consumer Unity and Trust Society (CUTS) International, has backed the push for a review of utility tariffs by the Electricity Company of Ghana and the Ghana Water Company Limited.

The Think Tank, however, maintains that there is the need to speedily address the inefficiencies within the system to make the companies sustainable.

CUTS call comes after the Electricity Company of Ghana, proposed a 148% jump in tariffs.

The sharp proposed increment, according to ECG, is due to the gap between the actual cost recovery tariff and the PURC-approved tariffs as well as the cost of completed projects.

West Africa Regional Director for CUTS International, Appiah – Kusi Adomako, spoke to Bernard Avle on the Point of View on Citi TV.

“I support the principle that tariffs need to go up to make ECG able to fulfil its mandate. If ECG is deprived of increment, what it means is that ECG may not be able to invest. And we are told that most of the cables and other things are old and need replacement, or we might go back to the dumsor era. Water is also justifiable because the water company buys chemicals. These chemicals are imported into the country. Freight prices have also gone up, exchange rate has also gone up and even the cost of buying those items has also gone up between the last time tariffs were increased. So, we need to allow these firms to be able to get some increment so that the business will be sustainable. When it is sustainable, people will find them attractive to invest in,” he said.

The Electricity Company of Ghana called for tariffs to be increased by 148% for 2022 in its proposal document forwarded to the PURC.

According to ECG, the sharp proposed increment is due to the gap between the actual cost recovery tariff and PURC-approved tariffs, as well as the cost of completed projects.

The Ghana Water Company also proposed an increment in its tariffs to be able to at least recover its costs.

Source: Citi Business News