Friday, March 23, 2012

Consumer associations condemn NAWEC’s proposed tariff increment

The Consumer Protection Consortium (CPC), formed by various consumer associations in The Gambia, has condemned the proposed tariff increment by NAWEC describing it as ‘a costly move’ that will make life difficult for people in the country.

“The proposed tariff increase, particularly that of electricity, will have a multiplier effect, as it would translate into higher operational cost for business which will in turn trigger a proportionate rise in the cost of basic goods and services,” Mr Alpha Jallow, a board member of CPC said.

Nawec has proposed to increase the tariff of water, electricity, and sewerage by 33% due to the rising cost of inputs such as fuel and lubricants.

However, though Mr Jallow said the CPC is concerned and acknowledges the plight of Nawec with regard to the current challenges of high operational costs due to rising cost of inputs, the tariff increment will have negative impact on the efforts of the government and consumer associations to stabilize prices of basic commodities to promote sustainable development. 

The CPC was involved in the second step of the tariff review process, which was the consultative meeting with consumer groups, he noted, saying that at the meeting after Nawec’s presentation, about 90% of the consumer association representatives said they were “not sufficiently convinced” by the justifications for the tariff increment and therefore have not bought into it.

Mr Jallow said the CPC executive had discussed the proposed tariff increment and made some recommendations one of which is for government to bailout Nawec to salvage the Gambian people from a costly venture that could result in an inflationary situation in the country.

They also recommended that Nawec scale down its operations and suspend the proposed increase in tariffs for the next 6 months during which a taskforce involving various stakeholders, including consumer organizations, be set up to study Nawec’s situation and come up with a workable formula to bailout the company.

The board member of the consumer rights organization said an audited report of Nawec’s account should be available to the taskforce to enable them to have a clearer understanding of its operational costs and effectiveness in the utilization of scarce resources.

They also recommended that a study should be conducted to determine network losses and the degree of leakages in Nawec’s electricity and water supply.

The CPC said Nawec and its stakeholders should explore the available opportunities and look at alternative renewable energy sources, solar, wind energy, and biogas, so as to reduce their costs and maintain subsequent tariff reductions.

In this vein, the CPC said it is appealing to the Public Utilities Regulatory Authority (PURA), as the regulator, not to unilaterally approve and effect the tariff increment without calling another consultative stakeholders meeting.


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