Govt to review utility tariffs to accommodate concerns of Organised Labour

The government has indicated its preparedness to accommodate a downward review of utility tariffs announced by the Public Utilities Regulatory Commission (PURC) in December.

It has, however, said that it is unable to scrap the Energy Sector Levies Act 2015 because of the relevance of the law in fixing the challenges with the power sector.

The Minister of Employment and Labour Relations, Mr Haruna Iddrisu, who made this known at a press briefing in Accra yesterday, said it was the intention of the government to fix dumsor and not manage it, hence the Energy Sector Levies Act 2015.

Utility review

He said the government appreciated the position of organised labour on the erosion of the incomes of workers as a result of the hikes in utilities and the levies on fuel.

He said a committee constituted by the government, comprising him, the deputy ministers of Finance and Power, the chief executives of the Volta River Authority (VRA), the

Electricity Company of Ghana (ECG) and the Ghana Grid Company (GRIDCo), was working on adjustments that could be accommodated by the government.

Mr Iddrisu said with the current increase of 59.2 per cent for electricity, a review to 52 per cent, for example, would mean that the government needed about GH₵500 million to offset the shortfall.

He was confident that at the next meeting between organised labour and the government on Thursday, January 21, 2016, the committee would furnish the government with the figures for some adjustments to be made.

He said the issue of a cost of living allowance (COLA) to cushion workers was also not off the table and would be discussed.

He said although the government respected the right of organised labour to demonstrate, the appeal was for labour to abandon the path of demonstrations and strikes once opportunities for compromises and dialogue were still being explored.

“Embarking on such actions means holding a gun to my head while we are still talking,” Mr Iddrisu said.

Energy Sector Levies Act 2015
On the demand by organised labour to scrap the Energy Sector Levies Act 2015, he said mindful of the sector’s importance, the government had passed the law to deal with four critical areas — the growing legacy debt of $1.2 million as a result of foreign exchange losses and crude imports; to clear arrears owed contractors in the road sector and initiate new projects; ensure an expansion of the rural electrification project, and ensure the financial stability of utility services providers.

“The financial situation of the ECG and the VRA is unhealthy. The procurement of crude will not be possible if the institutions are not assured of a consistent source of funding,” the minister said.

He said all the initiatives for which reason the act was passed were to ensure a sound footing for the country’s economy.

“The decision is in the best interest of the country and it is impossible for a review of the act,” Mr Iddrisu stated.

Writer’s email: caroline.boateng@graphic.com.gh