The Public Utilities Regulatory Commission (PURC) has ordered a 10.08 percent tariff reduction on prevailing rates for all customers of the Ghana Water Company Limited (GWCL).
The order follows the GWCL’s non-compliance with tariff decision and regulatory directives concerning the Teshie Desalination plant.
There will also be significant refunds given to customers.
In a statement copied to Citi News and signed by the Executive Secretary of the PURC, Mami Dufie Ofori, indicated that monitoring exercises revealed that the GWCL refused to allow the desalination plant to operate contrary to the PURC’s tariff decision.
The reduction, which takes effect from September 16, will remain until the desalination plant is put back into operation.
The Teshie desalination plant has been shut down to allow for the renegotiation of the contract which is said to be costing government GHc 6 million monthly.
GWCL makes payments of GHc 8 million a month to the financiers of the project, although it generates only GHc 2 million by supplying treated water from the plant.
Water is supplied to the people of Teshie and its environs from the Tema and Accra booster stations during the period.
“The reduction represents the component of costs related to the desalination plant approved as part of the July 2018 water tariff decision,” the statement explained.
In July 2018, the PURC published new water tariffs which maintained costs related to the desalination plant.
“The commission’s decision to maintain costs relating to the plan in the tariff was informed by GWCL’s own decision to operate the desalination plant,” the statement explained.
The GWCL is expected to refund “an amount totaling GHs14,097,146.oo only to all its customers. The amount represents five months’ tariff income unfairly over-recovered by GWCL between March 15, 2018, and September 15, 2018.”
“This refund results in a further 1.41% tariff reduction which shall be applied from 16th September 2018 to December 31, 2018,” the statement added.
The GWCL is also to pay GHc542,938.48 only as compensation to all its customers.
“This compensation represents 8.627% of the annual capacity charge of the desalination plant, pro-rated for one month,” the statement said.