The Public Utilities Regulatory Commission (PURC) says the latest water tariff adjustment only covers the most basic survival needs of Ghana Water Company Limited (GWCL).
Acting Executive Secretary of PURC, Dr Shaffic Suleman, said the Commission had to make tough choices to ensure Ghana Water Company Limited (GWCL) can keep operating while protecting consumers from unbearable increases.
He said the decision was driven by what he described as a strict focus on critical inputs.
“So we did a balancing act, and that is not easy at all, and further consultations to try as much as possible. But the most important issue, as I’ve indicated, is the investment.”
He explained that the approved 15% adjustment simply gives GWCL enough room to secure the most urgent items needed to keep water flowing.
He said the tariff only captured what was necessary to “at least sustain their current operations.”
“What the 15% did was to actually capture the most critical investments that Ghana water, for instance, will require to be able to at least sustain their current operations and possibly push them a little bit to also invest in new extensions, building new laboratories, the most important building new laboratories to be able to test the quality of water that the consumer is getting at the pump at every point in time.”
Dr Suleman said the Commission did not approve everything the utilities demanded. He insisted that the PURC only accepted what would improve service in the immediate term.
“So we added some reasonable amount of investment that will allow them to be able to improve on their services, especially the laboratories that they requested for and some pipe extensions, and most importantly, also the chemicals that they use to actually treat the water. Okay, so these are the investments that were considered.”
When asked if the situation Ghana Water faces is the same for the Electricity Company of Ghana (ECG), Dr Suleman said the Commission used the same rigid criteria for both utilities.
He said ECG, too, had many investment proposals, but the PURC only approved the most essential ones.
“Looking at the investments that were proposed, very important investment, as I said, for this time around, what we did was to indicate to the Electricity Company of Ghana and then Ghana Water Company Limited, not only to bring investments that they would just want us to pass through the tariff, but they must indicate the outcome of the investment.”
He said the Commission demanded clarity from the utilities about the impact of every investment before any approval.
“Assuming they are building a BSP in this particular area. They must tell us the current load for the area and the benefit of the new investment. And most importantly, how will the new investment influence the improvement of the quality of service to the consumers?”
Dr Suleman said the PURC had to reject several proposals because of the economic situation and the need to protect consumers.
“So they did that, unfortunately, because of the economic conditions and the least of that, well, we couldn’t allow all those investments to pass through the tariff. Have to carefully select the most critical ones.”
He said ECG’s long-term projects were excluded entirely.
“In fact, we have to reduce the majority of the as for the short-term investment. We didn’t consider them at all. We only look at the medium term. We took the most important short-term and critical investment.”
Only ongoing medium- to short-term works were considered, he stated.
“The long-term investment, none of them was accepted. Medium and short-term investments. We only considered those that are ongoing, but all those that are yet to commence have also been taken, and then we focus more on the investment, and that’s what resulted in the 9.6% you see.”
Dr Suleman admitted that ECG will still struggle, just as Ghana Water will. But he insisted the Commission had no choice.
“It will not be easy for them as well. They will also be having issues as to whether more should have been allowed, but it’s a balancing act.”