Tuesday, March 15, 2011

NAWEC refutes claim that Gambia have highest electricity tariff

by Lamin Jahateh, Banjul
NAWEC have disapproved the notion that Gambia have the highest electricity tariff in the sub-region. “Countries like Burkina Faso, Mali, and Liberia have higher electricity tariff than The Gambia,” said Mr. Jallow, the Finance Director of NAWEC.
He said most of the time when people said that electricity tariff in The Gambia is high compared to other countries in the sub-region, what they don’t tell other people is that the sources of production of electricity are different from country to country.
“If you take Ghana, for instance, where they use hydro to generate electricity which is far cheaper in terms cost of production you cannot compare that to a thermal power plant such as the one we used in The Gambia and naturally our cost of production will not be the same,” Mr. Jallow said.
He continued: “Just to give you a simple example, if you have a bottle (0.5 Liter) of water costing D10, but if you put NAWEC water inside the bottle you cannot charge the same price and there is a good reason for that.  The company that bottled this water have cost that they incurred before getting the water into the bottle and for them to be able to remain in business the least they could price for the bottle is their cost and of course to make further investment to expand they need to add some margin to the cost of production.
So naturally that is why they price the 0.5 liter bottle at D10, if you put NAWEC water in the bottle you cannot sell it to anybody for D10 because that is not the cost to NAWEC.  So this is a simple analogy, so if people are comparing let say electricity tariff in Gambia to Ghana they have to understand what the sources of production is and the cost related to that,”
NAWEC is mandated for the provision of electricity, water and sewerage service in The Gambia.  As a public enterprise NAWEC has not operated on a commercial basis in the sense that both water and the provinces are subsidised by the Electricity Division. Although NAWEC has achieved financial sustainability for its normal operations, it still lacks the resources to properly expand the electricity system. Due to this the system is ill equipped to satisfy the growing demand and needs substantial investment for maintenance and expansion.


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