PURC penalizes GWCL

Ing. Clifford Braimah, MD, GWCL

…orders repayment of over GHS14m to consumers

The Public Utilities Regulatory Commission (PURC) has directed the Ghana Water Company Limited (GWCL) to pay a total of GHS14, 640,084.48 to consumers, for flouting Section 11 of the PURC Act 1997, (Act 538).

The PURC has also requested the GWCL to effect a 10.08 percent reduction in tariff on prevailing rates for all customers effective September 16, 2018.

A statement from the PURC, signed by the commission’s Executive Secretary, Mrs Mami Dufie Ofori on September 13, 2018, said the penalties imposed on the GWCL is as a result of the failure to comply with the July 2018 new water tariffs which kept charges associated with the Teshie Desalination Plant operated by Befesa Desalination Developments Ghana Limited.

Following the GWCL’s agreement with Befesa to build, own, operate and transfer water purchase agreement, the Commission has since December 2015 included the contracted cost of the plant in its major tariff reviews.

PURC, since January this year, has embarked on a number of measures to clarify the tariff implications associated with GWCL’s operational decisions in respect of the desalination plant.

The Commission afterward issued an enforcement notification which the company failed to comply with,” the statement noted.

Monitoring exercises undertaken by the PURC have established that the GWCL has refused to allow the desalination plant to operate, contrary to the commission’s tariff assessment.

The PURC has therefore, as part of sanctions on the GWCL, reduced the water tariffs by 8.64 percent effective September 16, 2018.

The amount represents the component of costs related to the desalination plant approved as part of the July 2018 water tariff decision.

The amount represents five months’ tariff income unfairly over-recovered by GWCL between March 15 and September 15, 2018.

“This refund results in a further 1.41 percent tariff reduction which shall be applied from 16th September 2018 to December 31, 2018,” the statement said.

The company has further been asked to pay GHS542, 938.48 as compensation to all its customers.

It concluded that the tariff reduction shall remain in effect until the desalination plant is put back into operation or until otherwise decided by the Commission.

“The refund and compensation to customers shall be reflected in customer bills from September to December 2018 billing cycle,” the statement said.

By Wisdom Jonny-Nuekpe