Parliament rejects calls for Gov’t intervention to subsidize utility tariffs

Posted: July 16, 2010 in Agriculture/Poverty, Economic Reporting, Politics
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A proposed motion to call for government intervention to subsidise and initiate mitigating measures to absorb part of the cost in the recent increase in utility tariffs by the Public Utility Regulatory Commission (PURC), to afford consumers the ability to pay, was turned down by Parliament on Tuesday.The Majority members of the House, after a lengthy debate, voted against the motion, and rather insisted that the PURC do its work as an independent body, without the interference of the government or by any other body.

The motion was moved by the Member of Parliament (MP) for Afigya-Sekyere West, Mr. Albert Kan-Dapaah, and was seconded by the by MP for Essikado/Ketan, Mr. Joe Ghartey.

Kan-Dapaah, in moving the motion, proposed an amendment to an earlier motion moved by the MP for Obuasi, Edward Ennin, on Monday, and called on the government to initiate intervention measures that would save consumers from bearing the brunt of the recently increased electricity and water tariffs.

“Madam Speaker, I want to propose an amendment to the effect that this honourable house expresses concern on the recently announced increased electricity and water tariffs, and calls for its immediate reconsideration by government,” he noted.

He had earlier shared the views of some members of the house that it was “very dangerous for the government to call the PURC, and ask them to reconsider” the hikes in utility tariffs, but stressed that in responding to the plight of consumers, the government could subsidise some percentage of the tariffs, in order to provide a lifeline to consumers.

This, according to him, was an initiative which was implemented by the New Patriotic Party (NPP) government during its eight years in power.

 His argument attracted support from all the minority members, who shouted ‘hear, hear’ to cheer him up.

Contrary to Mr. Kan-Dapaah’s claim, the MP for Tamale South and Minister for Communications, Haruna Iddrisu, argued that the House should move away from partisan politics, and rather focus on the issues being discussed.
“Mr. Speaker, government remains very sensitive to the issue. Indeed, we made a pledge to improve on the quality of life of Ghanaians, and to improve upon the performance of state institutions, including the ECG, VRA and Ghana Water Company Limited. But, Mr. Speaker, my first major point is that in undertaking this very important function, utility tariffs have been increased, the Ghanaian public is concerned, and industry is concerned, because of its related consequence or cost of living and the cost of doing business, appropriately so. But, Mr. Speaker, we should go beyond mere partisanship to appreciate the challenges of the utility companies. We should be driving towards full cost recovery,” he stressed.

According to him, the utility companies were requesting for an increase of 154 per cent, but upon further consultation, the figure was pruned down to 89 per cent on the average, whilst non-residential users accounted for 42 per cent.

Stressing further, the Minister said the PURC, from June-December 2010, would require GH¢802 million to effectively carry out its operations, but the government, being mindful of the hardship effect of the increased tariffs on consumers, would be subsidiszing about GH¢74 million.

“On this tariff adjustment, legitimately are concerns about its impact on consumers on whether industrial or lifeline users will use GH¢752 million providing a shortfall of GH¢48 million. Additionally, there is GH¢22 million based on the old tariffs subsidy to the ECG for consumers using 0-150 units. So, overall, government subsidy is in the region of GH¢74 million. That is a mitigating measure by the Government of Ghana.”

Prior to Mr. Kan-Dapaah’s argument, the MP for Central Tongu and Minister for Roads and Transport, Mr. Joe Kwashie Gidisu, proposed an amendment to the motion moved by Mr. Ennin, “That this Honourable House calls on the Public Utility Regulatory Commission to reconsider the recent increases in electricity and water tariffs, in view of their impact on the general economic situation in the country.”

Mr. Edward Ennim, MP for Obuasi, on Monday moved a private member’s motion, and proposed that the “House express concern on the recently announced increased electricity and water tariffs, and call for its immediate reconsideration.”

But, having listened to the views from both sides of the House, the Speaker called for a headcount on the two amended motions proposed by Mr. Kan-Dapaah and Mr. Joe Gidisu.

Mr. Kan-Dapaah’s proposed amended motion received the minority votes of 87, as against that of 94 from the majority members. That of Mr. Gidisu received the majority votes of 95, against the minority votes of 89.

That notwithstanding, the results did not go down with the minority members, who challenged the verdict, and insisted that the doors to the floor of the House be closed to pave way for a recount.

“Mr. Speaker, we disagree with the results. The majority members are not up to ninety. Let us close the doors immediately and count again,” pleaded the Minority Leader, Osei-Kyei Mensah-Bonsu.

But, the Speaker disagreed, saying “Hon members, you know those who brought the figures to me did the counting. And that is what I have pronounced. Therefore, Hon. Kan-Dapaah’s motion is lost.”

Not satisfied with the pronouncement by the Speaker, the Minority Leader again, intervened, using the Standing Orders of the House, Order 114, to buttress his argument. “Mr. Speaker, I have asked for Order 114 for a division immediately. These numbers that you have announced, we challenge it,” he stressed.

But, the Speaker stood his grounds, arguing that the Minority Leader could only call for a division when a voice vote is challenged.
His resolved decision did not deter the minority from rescinding their decision, and insisted for re-voting.

“Mr. Speaker, I insist that what you have done is wrong, and it amounts to rigging in this house, and if you insist on holding onto this voting, we will leavee it to you. I want to put it on record that the number of the majority at the time you were counting was 86, and this amounts to rigging in this House. And, if you insist, as I said, we will leavee it to your conscience,” noted the Minority Leader.

“Hon. Minority Leader, I called for a headcount right from the beginning. I did not call for a voice vote. If at that end, you had called for a division, then it would have been different. Hon. members I did not call for a voice vote, and therefore, you have nothing to challenge,” responded Mr. Doe Adjaho.
The House, accordingly adopted calls on the PURC to reconsider the recent increases in electricity and water tariffs, in view of their impact on the general economic situation in the country.

The First Deputy Speaker directed that the decision of the House, in respect of the Private Member’s Motion, be communicated to the PURC.

Prior to the commencement of the debate, Rt. Hon. Justice Joyce Bamford-Addo ruled in favour for the debate on the issue to continue, after initially receiving a setback that it was pending before a court of competent jurisdiction.


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