The Trades Union Congress (TUC) says the demand from the country’s utility providers to raise electricity and water prices will compound the current hardships Ghanaians are going through.
The Union said the proposals, ranging from 37% to 334%, “have great potential to turn the economic crisis into a social and political crisis that will be more difficult to resolve”.
Utilities explained that the rising prices and depreciation of the Cedi had raised their operating costs well above their revenues and had to undertake critical investments and upgrade their infrastructure with the proposed increase.
However, the Union said, given that the economy had not fully recovered from the ravages of the COVID-19 pandemic, with the emerging challenges of the Russian-Ukrainian conflict, the upward revision of tariffs would aggravate the fate of households that were already suffering from the severe economic crisis.
As such, the union, which is the largest co-ordinating body for workers in Ghana, had asked the sector regulator, the Public Utilities Regulatory Commission (PURC), not to accede to the demand for public services until that the crisis was not over.
The union said: “In our current economic and social situation, workers and Ghanaians will have very little leverage to absorb such shocks. Now is not the time to drastically review utility rates. Any astronomical increase in tariffs could trigger social upheaval.
“The major revision of tariffs should therefore be postponed until the end of the cost of living crisis,” he added.
“What we need instead are measures that will reduce waste to a bare minimum and inject efficiency into the operations of utility companies that will help sustain them over a long period of time,” the union noted in its statement. submission to PURC.
He recommended that ECG step up its efforts to collect revenue, stop illegal connections and bridge the gap between its billing and electricity sales, while GWCL should also do more metering and stop charging flat rates. .
The TUC said it was important the government continued to help utility companies undertake some of the critical investments needed to keep electricity and water networks stable.
He also asked the government to consider absorbing some of the utility company losses resulting from current levels of inflation and currency depreciation.
The government should also ensure a full review of the 25-year take-or-pay contract for the desalination project, to make it fair for Ghana.
The contract required GWCL to pay Befesa Company Limited US$1.3 million each month, whether or not the company produced water.
The Ghana Water Company Limited (GWCL) is asking for a 334% water tariff increase, while the Electricity Company of Ghana (ECG) is asking for a 148% tariff increase for 2022.
The Volta River Authority (VRA) proposed a 37% tariff increase, Northern Electricity Distribution Company (NEDCo), 113%, and Ghana Grid Company Limited (GRIDCo), a 48% increase in transmission charges.
Meanwhile, the PUCR said it would protect electricity and water consumers from the imposition of high tariffs by not passing on utility losses to consumers to make them worse off.
Dr Ishmael Ackah, Executive Secretary of PURC, gave the assurance saying, “We sit between utilities and customers, and we want customers to be satisfied and to pay competitive prices.”
He told the Ghana News Agency that the Board of the Commission would meet on Thursday, June 30 to review the work done and hold further consultations before announcing the 2022 tariff on July 15.