High utility tariffs killing our businesses — AGI

The Association of Ghana Industries (AGI) has expressed worry about the current high utility tariffs that are impacting local businesses negatively. 

According to the AGI, its members are paying more than the agreed utility tariffs announced by the Public Utilities Regulatory Commission (PURC) in December 2015.

At a public forum, attended by officials of the AGI, PURC, Ghana Water Company Limited (GWCL) and the Electricity Company of Ghana (ECG), the captains of industry, said the present utility tariffs were forcing them to either downsize or close down their businesses.

Concerns 

Representatives of various companies including Rose Aluminium, Medlab, Pioneer Food Cannery, Akosombo Textiles Limited, Kempiski, Tropical Cables, BBC Industries and Holiday Inn, said since December 2015 to date they had received bills from ECG and the GWCL which showed increments of between 350 and 790 per cent. 

They said if nothing was done about the present situation they would be forced to close down.

They, therefore, called on the government to intervene in the situation since it was making their products uncompetitive, compared to the foreign goods on the market as well as pushing the cost of their services upwards.

According to some of the industry players, the high utility tariffs were also making them produce low-quality products since they could not pass on the utility costs to their customers.

A representative of Fabri Metal Ghana Limited, a new steel company located on the Tema-Aflao road, said the company was yet to open for business in the country but with the current utility tariffs, it was considering relocating to a neighbouring country.

The representative who wanted to remain anonymous said the company had so far invested $20 million in the local economy.

Already the company was operating in nine African countries which included the Democratic Republic of Congo (DRC), Angola, Gabon and Rwanda.

Utility regulators

The Director, Regulatory Economics of the PURC, Dr Simon Akorli, said the commission was discussing with the two utility companies to help resolve some of the issues that had so far been reported to the commission.

He said the increases in utility tariffs were necessitated by the generating companies’ inability to recover their operational costs.

Mr Ango Bediako Fredrick, Manager of Billing Services, ECG, gave the assurance that the ECG would not deliberately increase the bills of its customers, saying that people who had concerns should raise them for investigations and possible rectification.

The Commercial Manager of the GWCL, Mr Kenneth Ennin, said the company was aware of the challenges that the companies were facing and added that the GWCL was also facing similar challenges since it spent about 50 per cent of its revenue on electricity.

He stated that the company also spent about 30 per cent of its revenue on the purification of water for its consumers.

Mr Ennin added that the company needed a tariff increase that would  keep the company in business.

Writer's email-rebecca.quaicoe-duho@graphic.com.gh