Compared to what?
New rates of water and electricity tariffs took effect from yesterday, October 1, 2013. According to the Public Utility Regulatory Commission (PURC), these were the first substantial adjustments in the rates since August 2010.
Unfortunately, if the reminder of the three-year hiatus was to show us how stable the price of the erratically unstable and unreliable services had been, the punch line of "therefore time to increase", was spoilt by the rider that rates had been adjusted via the Automatic Adjustment Formula (AAF) throughout the three-year period.
Before PURC Executive Secretary, Samuel Sarpong, could sit down after his announcement to take a sip of the now very expensive and luxury sachet water, the usual suspects were jumping to the “Yentua” circus.
Politicians, seasoned, in the JSS and even the totally privatised day nurseries and prep schools, were sounding in loud and shrill competition to see who/which of them could condemn the new rates faster than “Speedy Gonzales.”
But really, do increases of 52 per cent and 78 per cent respectively in water and electricity tariffs justify the threats of looming display of infantile disorderliness and the call for mass exercises of freedoms and limbs? The answer is “yes” and “no” and emanates, like political as opposed to electrical power (which are both unstable and unreliable), from the people’s understanding and appreciation of the innards of the question: “compared to what?”
With the entire hullabaloo about the supposedly gargantuan leap in prices, the average unit price of water is now 130 pesewas per cubic metre (1000 litres) and that of electricity is 15.7 pesewas per kWh. Now let’s get all of this into perspective by delving into our “compared to what” analysis.
A few weeks ago, an obviously underpaid mason literally dropped a ton of blocks on the pipes carrying water to the houses in my neighbourhood. The consequence for me and most of my neighbours was to purchase water from one of the ubiquitous water tanker merchants. After the missus had shelled out GH¢ 80 for the privilege, my mind was yanked right back to proposals by the public utilities for “realistic” increases in tariffs.
The fact is that, the GH¢ 80 I paid for one tanker load of water represents about one sixth of the annual bill I would have paid to GWCL at the new tariff rates for the privilege of having piped water to my home, even as those privileges have been severely curtailed by the water flowing for only two of the seven days of each week.
I really do doff my hat to the residents of Adenta, Teshie Nungua and the myriad of sprawling urban communities dotted around Ghana who have had to put up with “waiting at the Pearly Gate without entering the Kingdom” for 30 years or more. The residents of Adenta and related communes have had to feed the profits of the water tanker operators for more than 30 years.
And likewise, until the Nation Electrification Programme started in 1989, almost 75 per cent of Ghanaians had to rely on candles and kerosene lamps to light up their homes.
Of course, real and substantial progress has come and now just a little over 25 per cent of Ghanaians still have to rely on candles and kerosene lamps; except for the year-long period of “load shedding time table turned guide of ‘dum so dum so’, where every Ghanaian living everywhere had to face the reality of poor and expensive alternatives to pipe water and connected electricity into poor homes.
It is from the foregoing perspective and analysis that I have little time and certainly no tolerance for the "Pavlovian"(knee-jerk) reaction of “we can’t afford it”, that has been the stock response of the lucky urban folks who have utility services delivered right to their door steps.
The combination of having to buy water occasionally and fuelling my generator over the nearly one year of has had two major effects on my psyche and thinking about this whole matter of what we pay and must for the utility services
When I was in the Gaffers’ chair at VRA and had to go to my brother Stephen “Pata” Adu and his PURC to ask for “realistic tariffs”, I got into a little wahala with my uncle the Gentle Giant when I boomed in a characteristic Tarzan tone that: “Anybody who thought that electricity was expensive, should try using candles and Keta lamps”.
My intent then and now was to position the debate on the insistence on having modern utility services and the reluctance to pay for it to be provided on a sustainable basis. My argument then and now was simple, “Have we considered the cost of alternative services for the unlucky Ghanaians who are not connected to the piped water and electricity supply?
I recently bought a stick of candle for 30 pesewas (15 US cents). I also bought 2 AA Batteries for GH¢ 3.00 (US$1.50). The unit price of electricity which took effect yesterday costs one half of one candle. Put another way, for the cost of lighting one candle to give bad and smoky lighting, I can light up 100 of 20 watts bulbs for one hour. .
Please don’t get me wrong. I am a great supporter of my twin brother Kan-Dapaah’s affordability (with one F) school of “there is little point in extending utility services to the poor, if they cannot pay to access it.
To demonstrate my commitment to the poor, I pushed for the creation of the lifeline tariff of virtually giving away the first 50 kWh of electricity free to users and a similarly low entry point tariff for water use.
Unfortunately, it has become manifestly clear that those targeted to enjoy lifeline tariffs never get to do so because they either live in a compound house of 20 -30 distinct customers unit all sharing 50 units of lifeline electricity or have to buy water at exorbitant prices because their homes are not connected to the GWCL grid.
By the same token, those of us living in our homes and enjoying connected water and electricity get to enjoy the full 50 kWh of lifeline power and a similar quantum of water. So here we have the absurd situation of those we want to help not getting it and those who do not need the help at all enjoying subsidies they really do not need.
What I am driving at is that, the debate about utility tariffs must focus more on the quality of the service being given to us by the service providers than on the price we are paying, which though important, pales into insignificance when compared to the cost of the alternative. If we are getting c***p service, and we have a choice, we would walk away from the very poor quality service given to us by the current providers even if it was for free.
Unfortunately, unlike the all round poor quality of supposedly competing mobile phone services, we have only ‘once choice’ when it comes to who provides us with water (GWCL) and electricity (six disaggregated but connected companies).
Ironically, as we have seen the power of competition in the acquisition of the white goods that we purchase expensively so we can complain loudly about the cheap electricity and water we use wastefully to operate then???
It is here that the PURC should have to ensure that the monopoly utility providers don’t just talk when looking for tariffs and then go on to deliver bad service when they get their money.
By aiding the utilities to get away yet again with higher tariffs on the mere promise of “will do better,” the PURC has acted as “an AWAM” referee in the match between the utility companies’ case for realistic tariffs and the consumers’ right to the highest quality of service.
This is the 2nd tier of the “compared to what” discussion; which I fear will have to continue next week as I am already stretching Auntie Doreen’s generosity and tolerance for pushing past my 1000 word limit.
By Charles Wereko-Brobby/Daily Graphic/Ghana
Chief Policy Analyst , Ghana Inst for Public Policy Options, (GIPPO)
Email: [email protected]
