ECG does not need a tariff increase due to forex losses – Ghana Electrical Contractors Association

The Ghana Electrical Contractors Association (GECA) has expressed a firm conviction that the Electricity Company of Ghana (ECG) does not need a special upward tariff adjustment to resolve its challenges especially with forex losses.

The power distribution company, ECG is seeking a 34% increment on the current tariff. Key among the reasons given for the need for the tariffs increase is forex losses.

However, GECA is of the view that the focus should be to address the very fundamental and administrative challenges rather than going for the low hanging fruit which is tariff increment that will not resolve the issues in the long run.

In an interview with Helen Appiah Ampofo on the 3FM Sunrise Morning Show, the President of GECA, Awal Sakib Mohammed stated that ECG should allow the Public Utilities Regulations Commission (PURC) to use its own mechanism to adjust tariff knowing very well that they consider several factors such as technical and forex losses in their computations.

“We know that PURC has their own mechanism which takes into consideration several factors including forex and technical losses in adjusting tariffs so for ECG to request for special increment based on forex losses, we think it’s unfair.”

“At this juncture, even if the tariff is increased, ECG will come back and tell us again about the same forex issues” the GECA President stressed.

GECA is therefore entreating ECG to deal with the about 30% losses in its operational system such as distribution losses and ineffective revenue collection.

He further noted that most of the losses are as a result of people using electricity without paying for it but not all are power thefts. It is not that the people are not willing to pay, except that the one who is supposed to regularize their status is not doing it.

“Some of them are not power theft. They are results of faulty meters. There are a lot of faulty meters in this country which some of them have been reported to ECG but are yet to be replaced” the GECA President asserted.

The Ghana Electrical Contractors Association has suggested that ECG should adopt a more effective and efficient revenue collection mechanism, deploy a comprehensive loss reduction program, and adopt prudent strategies to manage the company’s limited resources.

“We advocate for a solution that addresses the root causes of systems losses and illegal power usage, through rigorous monitoring, maintenance of networks, and enforcement of pertinent statutes governing power distribution. Recognizing ECG’s overwhelmed state, we propose the introduction of third-party contractor maintenance programs which we believe will inject fresh energy and enthusiasm, leading to a reduction in losses” GECA stated in its press release issued on April 2, 2024.

By Samuel Afriyie Owusu|3news.com|Ghana