Move to help poor pay utility tarrif

Page 3 (lead) May 2/2008

Story: Charles Benoni Okine

THE Executive Secretary of the Public Utilities and Regulatory Commission (PURC), Mr Stephen Adu, has advocated policies that will identify ‘poor’ people who genuinely require government subsidies to pay their utility tariffs.
According to him, the present system whereby the payment of subsidies was holistic was not the best way to subsidise the utilities for consumers.
Mr Adu made the suggestion when he answered questions from the media during a news conference to draw the curtain on the 5th Africa Forum for Utility Regulators (AFUR) annual conference in Accra on Wednesday.
As a result of the recent increases in the tariffs of the utilities, the government raised the lifeline for consumers of electricity from 50 units to 150 units per month to enable more people to fall within the lifeline.
But Mr Adu said the move was not in the best interest of the state because more people who could afford to pay realistic tariffs had been roped in to pay less, thereby burdening not only the state but the utility companies as well.
“Subsidies are necessary, particularly when one considers the poverty levels in the country and in Africa as a whole, but we also need to ensure that we identify the poor ones among us who cannot genuinely pay and assist them,” he added.
On the utilities being accessible to the people, he described the situation as a worrying phenomenon on the continent in general.
He said investments in utility projects were enormous, to the extent that there was the need for both local and foreign investors to show greater interest in the sector.
As a result of the poverty levels on the continent, investors normally shy away from the sector because of the fear that they may not be able to have returns on their investments.
It was against that background that Mr Adu called for an enabling environment that would attract investors to help improve access to the utilities on the continent.
He admitted that huge capital outlays were involved in the execution of such projects, hence the need for investors to recoup their investments.
However, Mr Adu gave the assurance that the utility commissions on the continent were resolved to ensure that such investors get the returns on their investments by ensuring that the tariffs paid them were enough to secure their investments.
For consumers, he said the utility commissions would protect their interests by ensuring that any such investor did not pass on his inefficiencies in terms of cost to the consumers.
“If investors produce inefficiently, they will incur cost and they would want to pass that on to the consumers. But we will be resolute to ensure that it does not happen,” he said.
Mr Adu said the AFUR had come far and described this year’s conference as a huge success because of the attendance and the quality of delivery by the various speakers.
He expressed the hope that the regulators forum would continue to grow to discharge their duties as expected.
The Chairman of the AFUR, Mr Smundu Mokoena, for his part, mentioned the huge utility infrastructural gap on the continent, which was making access to it difficult.
He said the forum had made proposals, through the various sector ministries, for consideration by the African Union.