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1st July, 2010
LISTEN TO AGI AND EMPLOYERS
The Trades Union Congress has threatened to embark on a series of strikes with effect from July 13 if by that date, the PURC has not announced a downward re-adjustment in utility tariffs.
The new tariffs of 89 per cent increase (for electricity) and 36 per cent (water) were announced on May 31.
Last June 15, the leadership of the TUC met with officials of the PURC to press home their demand for a downward review of the newly announced utility tariffs. That meeting ended in a stalemate following the refusal of PURC to budge on the demand by Labour.
With the breakdown of the talks, the TUC had planned to march to the seat of government to meet with the President.
The May 31 increases have attracted angry reactions from both labour and representative bodies for industrial and commercial concerns such as Association of Ghana Industries, the Chamber of Mines, employers Association, among others.
From all these groups, it has been clear that it is not the increase, per se, that they are against: what they are against is the magnitude or quantum of increase.
Employers, commerce and industry have pointed out that the electricity tariff adjustments culminate in increase of 131 per cent for the lower voltage consumers (SMEs) to as high as 200 per cent in the high voltage consumer class.
For the steel, textiles and garments, pharmaceuticals and household (aluminium) manufacturing industries, the new tariff translates to 170 per cent to 200 per cent average increases.
Pointing out that the increases would raise product and service costs for the consumer and make local products and services even less competitive, their fear is that some businesses might be forced into closure, leading to job losses.
These shouts of no have not come alone. They have been accompanied by suggestions of how PURC can go about the increases in a way that will not hurt the consumer and yet ensure enough returns for the utility companies.
The Association of Ghana Industries and the Ghana Employers Association, for instance, have proposed a two-phase increases: 40 per cent immediate increase effective July 1, 2010 and 20 per cent increase in January 2011.
The PURC has been heard defending the hikes; indeed, the very fact that its talks with labour broke down is proof that it has decided not to budge.
Listening to Electricity Corporation of Ghana, GRIDCO, the Volta River Authority and Ghana Water Company, there is no Ghanaian who should be left in any doubt that some level of increase is needed at this time.
However, the Times wishes to plead with the PURC to consider the latest proposal on the table (re: for a two-phase increase). We think that it makes sense as it will allow industry to adjust and plan, long term, for the 60 per cent total increase.
It is not known how government plans to handle the series of industrial actions which the TUC and certainly other labour organizations have threatened to embark on. What we do know is that those strikes have in the past been known to paralyse the economy.
It is for the avoidance of a head-on collision between labour and government that the Times is asking the PURC to give the two-phase increase a serious thought.
Perhaps this is also the time to ask ourselves as a nation: how come that there had been no tariff increases since November 2007? We suspect the fear of the almighty thumb.
Well, polticians understand this better than all of us, but if the recent increases should teach Ghanaians anything, it is that we cannot postpone certain major economic or financial decisions forever.
The new tariffs of 89 per cent increase (for electricity) and 36 per cent (water) were announced on May 31.
Last June 15, the leadership of the TUC met with officials of the PURC to press home their demand for a downward review of the newly announced utility tariffs. That meeting ended in a stalemate following the refusal of PURC to budge on the demand by Labour.
With the breakdown of the talks, the TUC had planned to march to the seat of government to meet with the President.
The May 31 increases have attracted angry reactions from both labour and representative bodies for industrial and commercial concerns such as Association of Ghana Industries, the Chamber of Mines, employers Association, among others.
From all these groups, it has been clear that it is not the increase, per se, that they are against: what they are against is the magnitude or quantum of increase.
Employers, commerce and industry have pointed out that the electricity tariff adjustments culminate in increase of 131 per cent for the lower voltage consumers (SMEs) to as high as 200 per cent in the high voltage consumer class.
For the steel, textiles and garments, pharmaceuticals and household (aluminium) manufacturing industries, the new tariff translates to 170 per cent to 200 per cent average increases.
Pointing out that the increases would raise product and service costs for the consumer and make local products and services even less competitive, their fear is that some businesses might be forced into closure, leading to job losses.
These shouts of no have not come alone. They have been accompanied by suggestions of how PURC can go about the increases in a way that will not hurt the consumer and yet ensure enough returns for the utility companies.
The Association of Ghana Industries and the Ghana Employers Association, for instance, have proposed a two-phase increases: 40 per cent immediate increase effective July 1, 2010 and 20 per cent increase in January 2011.
The PURC has been heard defending the hikes; indeed, the very fact that its talks with labour broke down is proof that it has decided not to budge.
Listening to Electricity Corporation of Ghana, GRIDCO, the Volta River Authority and Ghana Water Company, there is no Ghanaian who should be left in any doubt that some level of increase is needed at this time.
However, the Times wishes to plead with the PURC to consider the latest proposal on the table (re: for a two-phase increase). We think that it makes sense as it will allow industry to adjust and plan, long term, for the 60 per cent total increase.
It is not known how government plans to handle the series of industrial actions which the TUC and certainly other labour organizations have threatened to embark on. What we do know is that those strikes have in the past been known to paralyse the economy.
It is for the avoidance of a head-on collision between labour and government that the Times is asking the PURC to give the two-phase increase a serious thought.
Perhaps this is also the time to ask ourselves as a nation: how come that there had been no tariff increases since November 2007? We suspect the fear of the almighty thumb.
Well, polticians understand this better than all of us, but if the recent increases should teach Ghanaians anything, it is that we cannot postpone certain major economic or financial decisions forever.
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