Government’s contribution to new tariffs does not amount to subsidy – PURC Boss

The Executive Secretary of the Public Utilities Regulatory Commission (PURC), Dr. Ishmael Ackah says government’s contribution to the newly announced tariffs does not amount to a subsidy.

He made this comment in an interaction on the JoyNews’ PM Express on Monday.

Tariffs for electricity and water are expected to go up by 27.15% and 21.55% respectively by September 1, 2022.

He explained that what the PURC sought to do was to pass on cost that was prudent to the customer.

“So we go to the utility and we say that when you take your asset, can we still disaggregate the same asset into; the asset you bought yourself, the asset you got from donors and the asset funded by government.

“So we will take the asset funded by government. Let’s say 40 percent, government is the owner of ECG, Ghana Water, so if government pays for those assets then the return on equity should go to the government,” he stressed.

According to him, the government decided to forego its investment, hence the percentages that were arrived at for the utility tariffs.

When asked if the government’s decision to forego its investment can be referred to as a subsidy, he replied in the negative.

“Well I won’t call it a subsidy. It is more of government zeroing its returns” he said.

Meanwhile, the Electricity Company Limited (ECG) has accepted the tariff increase approved by the Public Utilities Regulatory Commission (PURC) expected to take effect September 1, 2022.

The Director of External Affairs, Charles Nii Ayiku stated that the power distribution company will continue to provide consumers with quality feed and reliable power despite the new tariff being lower than expected.

“Yes, as expected by all, of course you will not be excited about what has been given by the PURC but we have accepted it.”

Mr. Ayiku added that “where we have any challenges, we will consult with our stakeholders including PURC.”

Source: MyJoyOnline