Labour, Industry Pressure Government
14 July 2010
In their first ever bilateral talks, organised labour and private sector employers jointly signalled their continuing strong resentment of power tariff increases, ostensibly moving government to indicate it will take a second look at the increases which came into effect in June.
The President of the Assocation of Ghana Industries (AGI), Nana Owusu-Afari and the Secretary-General of the Ghana Trades Union Congress (TUC), Mr Kofi Asamoah, however, differed in terms of what line of action to adopt over the electricity end-user tariff adjustment of 89 percent announced by the Public Utilities Regulatory Commission (PURC).
A joint communique issues last week noted that the TUC, having exhausted is ultimatum, was poised to mobilise its membership to embark on peaceful demonstrations and strike actions throughout the country.
The AGI on its part said it "stands for a no-straightjacket approach, but can foresee bulk power consumers being pushed to embark on ill-fated labour lay-offs and last-resort company shutdowns".
While organised labour has argued that the quantum leap in tariffs would be an unbearable burden on workers, the AGI has established that the adjustment bloats some manufacturers' power consumption bills by between 131 percent and 250 percent.
The AGI recently noted that energy intensive industries such as aluminium smelting, textiles and cement manufacturing, are all threatened - which could result in massive worker lay-offs and production line shutdonws as a measure of reducing costs.
Reports since Monday indicate that President Atta Mills has assured the TUC that government is prepared to consider their concerns and could prompt the PURC to review their tariff adjustment. The President however did not say where the emphasis would be.
The two leaders of industry and labour affirmed in their joint communique that they are not necessarily against the current tariff increases per se, but they have an axe to grind with the quantum and focus of the increase.
They pointed out that they have adequately and persuasively engaged the PURC on the matter, going the distance to propose a more acceptable alternative - a 40 pcercent increase in 2010 and a further 20 percent hike in 2011.
The two registered the refusal of their members "to be made to bear the full brunt of the tariff adjustments, which had been left in limbo since 2007", adding that they are at a loss in regard to emerging percentage inconsistencies in the tariff adjustment.
Prior to PURC's announced tariff adjustment, the AGI issued a seven-point recommendation targetted at the industry regulator, including the need to envisage multi-faceted alternative solutions to enegy generation, supply and distribution as as well as infrastructure expansion and financing, rather than continued reliance on the age-old consumer tariff increases as the sole panacea.
The industrialists indicated Ghana needs short, medium and long term Enegy Sector Strategic Development Planning - with concomitant financing strategy and consumer tariff-pricing policy that would guarantee the right of the citizenry and of industry to dependable power supply.
Utility Providers (UP) should also perenially pursue their revenue collection with vigour and without fear or favour, regardless of the consumer taking a cue from the VAT Service and other similar State revenue collecting agencies.
The AGI contended that the tenure of office of PURC as well as UP's Boards and Managements should be so structured as not to coincide with political transfers of office - with the view to averting operational and administrative disruptions.
They expect the PURC, as much as possible, to also sterm the practice whereby tariff adjustment proclamations are allowed to cause public outcry and industrial panic.
The statement also stressed it was imperative to assure industry of future stability and availability of competitively-priced utilities, so that it can in turn price goods and services properly.
It emphasised that in case an upward adjustment of utility tariffs became necessary, it should be graduated and resonably affordable, since huge tariff increases are not good for job retention, business growth and wealth-creation.
The industrialists prompted government that urgent and priority steps should be taken to redeem the huge Government outstanding public utility bill, a move that in the considered opinion of the AGI will go a long way to off-set the cash flow problems currently being experienced by the utility providers.
Source: B & FT