If legacy debts, others are sorted, water tariffs could drop to 0% – GWCL MD
The Managing Director of the Ghana Water Company Limited (GWCL), Dr. Clifford Braimah, says the tariff hike the company is demanding could be reduced drastically if certain costs the company is burdened with, are removed.
According to him, the company could maintain its current tariffs if costs such as its legacy debts, capital investments, unlend loans among others, are taken care of by the state.
He noted that a discussion could be had to find a convenient way so that such an arrangement could be had as it is done in other jurisdictions.
“….it can even come down to 0. Yes. That is what I said at the beginning, that the current tariff if some cost elements or cost items are taken away, the tariffs are enough,” he said on JoyNews’ Newsfile on Saturday.
The Water Company is demanding a 334% upward adjustment in tariffs from the Public Utilities Regulatory Commission (PURC) in the upcoming tariff adjustment window.https://58810da7bb43c0315269602ff1c7c118.safeframe.googlesyndication.com/safeframe/1-0-38/html/container.html
According to them, the current tariffs are not enough to support their operations.
The Managing Director explained that the 334% increase in tariff is only seen as exorbitant due to the fact that unlike the electricity generating and distributing regulated utilities companies which control different aspects of the chain of supply of electricity, the Water Company controls all of its chain of supply and thus must request a combined tariff increment for all.
“The structure of Ghana Water Company is that, we do production, we do transmission, and we do distribution. So the three different units that you’re seeing as small, if you had aggregated them like we used to have VRA doing all, the tariff of Ghana Water Company would not have been seen as that high relative to the other ones,” he said.
He also noted that tariff increases being demanded by the Electricity Company of Ghana (ECG) also affects the Water Company as they are listed by the ECG as a commercial entity, hence the need for the tariff increment.
“Also remember that the tariff ECG is asking for is a pass through cost for Ghana Water Company. Meaning we pay, our systems rely on ECG, and we’re treated as a commercial entity not a company that is running water for you at a lower tariff. They charge us as a commercial entity. So these are things that we can discuss and bring the values actually down,” he said.
Mr. Braimah stated that if the government was indeed interested in seeing to it that the tariffs were reduced drastically; it could take up some of the costs.
“So these are things that when we begin to discuss we’ll realize that some of these costs if they’re taken off, one, if our debts, they call them legacy debts are taken away, if the unlend loans are no longer unlend to Ghana Water Company, if we say that the capital investments are going to be taken care of by the state, all these things will go down, and our citizens are those that pollute our water, so if citizens take the responsibility not to pollute the water we are not going to increase the usage of chemical like we are doing currently in Weija. From 200 bags of aluminum sulphate a day, we are now using 300. That’s an increase to cost and this is citizens who are polluting the environment,” he said.
