2.10.07

Nii Moi Thompson...Utility companies don’t deserve tariff hikes

The Public Utilities Regulatory Commission is expected to announce tariff increase of between 35 and 40 percent for electricity and water following a proposal by the utility companies to have their tariffs adjusted upward to meet their increased cost of production. They also say it will enable them to improve on their service delivery. But in a paper titled “the case against higher utility tariffs”, an Economist Dr Nii Moi Thompson argues that various tariff increases in the past, in addition to loans contracted have made little impact on their service delivery. He told Joy News that the inefficiencies of the utility companies must first be addressed before asking the public to pay more.
Nii Moi-Thompson aregued that in the recent past the government, based on arguements for a tariff increase, guaranteed huge loans for the companies which unfortunaletly did not reflect in any service improvement."In the case of Ghana water company there was $110.7 million in internationally guaranteed loans and then Electricity Company of Ghana, $143.1 million ...without explaining to us what happened to thses huge sums of money."The PURC has told Joy News that it will provide final figures on the quantum of increase and effective date of implementation by close of Tuesday.
It however provided a conservative estimate of 35 percent. The decision comes closely on the heels of government announcement of an end to the year-long energy crisis which affected effective supply of electricity and water. Interest groups in the energy and water sector have been making a case for the increases citing the need for full cost recovery and the need to improve on the infrastructure to guarantee good service delivery.

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