The Public Utilities Regulatory Commission (PURC) has directed the Ghana Water Company Limited (GWCL) to reduce tariff by 10.08 per cent on its prevailing rates.
The directive is to take effect on Sunday, September 16, 2018.
The order follows the GWCL’s non-compliance with tariff decision and regulatory directives concerning the Teshie Desalination plant.
The reduction is expected to remain until the desalination plant is put back into operation.
The Teshie desalination plant has been shut down to allow for the renegotiation of the contract which is said to be costing government GHc6 million monthly.
GWCL makes payments of GHc 8 million a month to the financiers of the project, although it generates only GHc2 million by supplying treated water from the plant.
Water is supplied to the people of Teshie and its environs from the Tema and Accra booster stations during the period.
The Commission in a statement said “Between January and July 2018, the Commission undertook a number of measures aimed at giving GWCL a hearing and clarifying the tariff implications associated with GWCL’s operational decisions in respect of the desalination plant. The Commission subsequently issued an enforcement notification which the company failed to comply with”.
It explained further that, the July 2018 new water tariffs announced by the Commission maintained costs related to the desalination plant based on GWCL’s decision to operate the desalination plant.
However, monitoring exercises undertaken by the Commission have established that the GWCL has failed or refused to allow the desalination plant to operate, contrary to the Commission’s tariff decision.
Meanwhile GWCL has been directed to refund a total of GH¢14,640,084.48 to its customers for breaching Section 11 of the PURC Act 1997, (Act 538).
“This results in a further 1.41% tariff reduction which shall be applied from September 16 to December 31, 2018,” it said.
The Commission has also asked Ghana Water to pay GH¢542,938.48 only as compensation to all its customers.
The compensation represents 8.627% of the annual capacity charge of the desalination plant, pro-rated for one month.
By: Jennifer Avemee