Following the increases of utility tariffs by the Public Utilities Regulatory Commission (PURC) in September, 2013 Organised Labour demanded the staggering of the tariff increases as a means of reducing the negative effects of the hikes on consumers.
A ten-day ultimatum was issued by Organised Labour to Government and the PURC to meet its demand or face the wrath of workers.
Subsequently, Government constituted Technical Working Group (TWG) to make recommendations for consideration, taking into account Organised Labour’s demands.
We threatened to embark upon nationwide demonstrations and a one-day general strike on 18th November, 2013 when the TWG’s recommendations failed to address our concerns.
Since then, Government has engaged the leadership of Organised Labour on a regular basis with the aim of averting the strike action because of its potential devastating effects on the economy and at the same time finding lasting solutions to the challenges facing the utility companies.
As we are all aware by now, Government has finally agreed to subsidize the cost of electricity until full cost recovery is achieved. Subsequently, the starting point of the average electricity tariff increase will reduce from 78.9 percent to 59.18 percent (including all taxes, levies and charges). This represents a reduction of 25 percent.
Government has, therefore, agreed to pay about GH₵410 million to the utility companies to ensure a steady supply of electricity.
We understand that a full cost recovery will require an increase of electricity tariff by 120 percent and that will be achieved within nine months (October, 2013 to June, 2014).
We also understand that the PURC will start the implementation of the Automatic Tariff Adjustment Formula (ATAF) from January, 2014 along with the agreed plan to recover the full cost of the generation, transmission and distribution of electricity.
Organised Labour has accepted this arrangement in good faith based on the positive outcome of our consultations with the Government, the Ghana Employers’ Association (GEA), the Association of Ghana Industries (AGI) and the Chamber of Commerce.
We believe that the 25 percent reduction of the starting point of the electricity tariff increase will significantly cushion consumers from the negative effects of the tariff hikes. We would have preferred even a lower starting point but that would mean higher increases in tariffs towards full cost recovery in the coming year.
We would like to express our appreciation to the working people of Ghana for their support in this struggle.
In response to the effort by Government to cushion the negative effects of the utility tariff hikes on consumers and taking into account the understanding reached with Government and our social partners (i.e., the Ghana Employers’ Association, the Association of Ghana Industries and the Chamber of Commerce) we hereby call off all the planned nationwide demonstrations and the one-day strike scheduled for 18th November 2013.
We expect the PURC to implement the Automatic Tariff Adjustment Formula to spare consumers the shocks that have characterized tariff adjustments. We also expect Government to ensure that the public utility companies operate efficiently.
Secretary General of TUC
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