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Opinions of Thursday, 18 February 2016

Columnist: Kwame Atta Tawiah

GWCL policies against bottled water companies?

Water is a basic necessity of life and because it has no alternative it is a very precious resource.

Luckily for Ghana, the country abounds in water bodies on which water systems have been built to supply potable water to the people.

The government over the last few years has been trying to improve water coverage and presently we are told it is over 70 per cent. This is laudable.

But following the hike in water tariffs by the Public Utilities Regulatory Commission (PURC) with effect from December 14, 2015, consumers have been slapped with astronomical increases since the end of January 2016.

The recent hikes in the water tariffs by 67 per cent, bring to mind many questions we need to ask ourselves if that information is accurate, or is the PURC also hiding the true facts and deceiving the public that they are acting in the public interest?

The Ghana Water Company Limited (GWCL) recently introduced a new tariff category called Special Commercial Tariff which was specifically introduced to apparently attack the bottled water industry.

Firstly, the recent increase in tariffs from 1,080.63Gp to 5,078.91Gp works out to a 400 per cent increase and not 67 per cent as published.

Then another tariff category called Sachet Water Tariff was also increased to 1,121.02Gp.

Category of tariffs

We ask GWCL and the PURC, why such a huge difference in the bottled water tariff as compared to the Sachet Water Tariff? Both are being used for the same application so why this gap?

As per the GWCL website, the Special Commercial refers to bulk customers who use GWCL treated water as the main raw material for bottling water for resale.

If that is the case, why do we have separate tariffs for bottled water and sachet water; when both use GWCL treated water as the main raw material, even though all companies actually do conduct various methods of further treatment before bottling and not directly rely on GWCL treated water which many people consider not safe for drinking.

Are we promoting the consumption of sachet water as against bottled water or because sachet water is affordable by the masses due to the low cost of packaging compared to bottled water? Obviously, sachet water would be cheaper as the packaging costs are different. What about hygiene and our environment; has that been considered?

Nowhere in the advanced world would you find sachet water; only bottled water is seen. So is the motive to go backwards and get rid of all bottled water?

Are we really interested in development or we prefer to see heaps of sachet water in all 5-STAR hotels during our meetings?

One can say that the GWCL and the PURC are totally biased in fixing rates for industrial or commercial consumers.

For these two organisations to suddenly introduce new categories of tariffs for water producing companies is respected, but for the commission to categorise rates based on the same applications is baseless, unless some members from both organisations have their own sachet water business which they want to promote.

What is the basis of new tariffs

More interestingly, those manufacturers producing soft drinks such as Cola, Orange, Lemon and alcoholic beverages such as beer which contain 97 per cent of water and three per cent with artificial flavours and sugar are categorised under Industrial Tariff and paying 1007Gp which is 400 per cent less compared to the rates of bottled water tariffs even though they consume the same quantities of water from GWCL – Can you believe that?

What is the logic here? Are they trying to encourage our youth to consume soft drinks and beers in replacement of the most important necessity of life, water?

How can bottled water companies survive if the cost of water is four times higher than the cost of a Cola drink? Or they believe that water in a bottle is considered an upper-class commodity for the rich but a cola in a bottle is for all classes! Think about this, do we really have a PURC that takes care of all consumers?

Revenue to GWCL

Should all bottled water companies in Ghana shift to sachet water which will bring their cost of production down by 400 per cent? Is that the motive?

It is more economical for GWCL to gain some reasonable revenue from such companies but to directly attack and shut them down with ‘killer’ tariffs will only leave them with nothing!

Then what next, would they then decide to increase tariff on sachet water by 400 per cent to save the beer companies? Bottled water is sold currently for 30 per cent more than the price of such soft drinks and beer.

I expect the PURC and the GWCL to answer whether these companies expect that bottled water would be sold at a higher price compared to those drinks.

Have you ever come across such pricing method globally?

It is believed that the government is not well aware of such bias acts by the GWCL and the PURC.

There is neither fair play nor is the PURC ready to act as a regulator whose job profile is to protect the public against the monopolistic tendencies of the GWCL.

I humbly submit to the government to intervene and clean up this mess created and approved by the PURC to create the enabling environment for businesses to thrive.