25 July 2003

Ghana: Water Company, ECG to Be Penalised for Poor Delivery

In spite of the astronomical increases in the tariffs on water and electricity, Ghanaians continue to experience poor supplies though the hikes were made on the promise to improve the services.

Chronicle's constant monitoring and complaints received so far from a section of the public since the two-tier increment can reveal that the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL) are performing below the expectations of the average Ghanaian consumer.

The paper gathered that there have been frequent power cuts and interruption in water supply without prior notice to consumers while the quality of water supplied to residents in some parts of Accra has often been questioned.

In Chronicle's bid to find out what the Public Utility Regulatory Commission (PURC) is doing to put the utility providers on their toes to salvage the situation since the commission has the statutory responsibilities to adequately protect consumer's interest, the paper spoke to the executive secretary of the commission, Mr. Stephen Adu. He disclosed that, "all tariff decisions, since the commission's inception, have been, inter alia, performance-based."

According to him, certain performance targets and operational benchmarks are incorporated into the tariff and when the utility fails to meet the benchmarks there is an automatic revenue loss.

Mentioning some of the benchmarks as the collection ratio-pertaining to utility revenue collection performance and directions on system loss reduction, Mr. Aidoo noted that these have been put in place to ensure vigilance by the management of the utility companies and keen shareholder interest in their performance.

Quizzed further as to whether the PURC has in place certain penalties to be imposed on utility providers who fail to meet standards of performance, the executive secretary answered that the commission is adopting a phased approach towards the institution of a sanction regime, adding that the initial penalties under the scheme will include fines imposed and collected by the commission.

Also in place is a monetary compensation for customers who suffer damage or some loss for failure of the utility to meet performance standards or breach of other service responsibilities.

He also stressed that other penalties in the nature of fines for non-compliance and compensation for failure to provide adequate service are being developed by the commission in consultation with the utilities licensing bodies such as the Energy Commission and other stakeholders.

Mr. Adu hinted that currently, monetary penalties guidelines are being formulated for consideration and adoption after due stakeholder discussions.

"These penalties cover aspects of service provision that do not require huge capital investments. Activities such as wrong billing, unlawful disconnections, poor response to customers' complaints and failure to provide requested feedback through the PURC stipulated reporting format will be penalized under the next phase of the sanctioning" he added.

Asked whether the public has been educated on the penalties to be implemented, Mr. Adu replied that funds are being mobilized by the commission to deliver more effectively on its monitoring and sanctioning mandates and also speed up the decentralization drive aimed at bringing services to consumers' steps.

"Being committed to protecting customers, the commission will organise workshops to outdoor the penalties when instituted and thereafter hold public fora at various major centres to publicise them and increase awareness," he added.

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