Ghana Water Company Limited (GWCL) has again proposed a thirty percent increment in water tariffs pending the approval of its regulator – the Public Utilities and Regulatory Commission (PURC).
The company argues that the country recorded a rise in inflation over the last quarter which caused an impact on the cost of regular water supply hence the need for an increment in the tariff.
Speaking to Citi News, Managing Director of the Ghana Water Company Limited, Ing. Dr. Clifford Braimah further explains the reasons for the proposal.
“If you take the dollar rise for instance between the time they approved the recent increment and now, that’s depreciation. Other things have also come up like inflation. It has also gone up so if they give us an additional 30 percent increase, why not? We will love it.”
The PURC has already said, it will by end of year announce its quarterly tariff adjustment.
The review is expected to take effect from January 1, 2023.
PURC adjusts tariffs to reflect changes in macroeconomic variables such as inflation and exchange rate.
Head of Research and Cooperate Affairs at the PURC, Dr. Eric Obutey had told Citi News: “The cedi’s rate against the dollar and inflation are some of the factors we try to correct using the quarterly tariff adjustments. We should be expecting an announcement before the close of 2022 because it is supposed to take effect from the 1st of January.”
Earlier this year, the PURC announced a 27.15% increase in tariff for electricity and 21.55% increase in water tariff effective September 1, 2022.
This was after utility companies including the Electricity Company of Ghana and Ghana Water Company Limited proposed an increase in tariffs by 148% and 334% respectively.
The authority justified the upward review of tariffs despite the worsening cost of living.
It explained that the decision was arrived at after rigorous analysis and extensive consultations with industry players, as well as an assessment of the economic conditions of consumers.
The ECG had proposed that its tariffs be increased by 148% for 2022 and with 7.6% average adjustments between the periods of 2023 to 2026.
The sharp increase, according to the ECG was due to the gap between the actual cost recovery tariff and PURC-approved tariffs as well as the cost of completed projects.
The GWCL also argued that while the average tariff per cubic metre in 2019 was 1.27 USD, the same was reduced to USD 1.13 as a result of cedi depreciation.
The GWCL said this had affected its ability to carry out repairs and replacements of aged and obsolete equipment and pipelines.
Source: Modern Ghana
