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It is increasingly becoming clear that the last thing Gambians and residents would accept is an increase in electricity tariff by the Government-owned National Water and Electricity Company (NAWEC).
The people said they are already grappling with the realities
of economic hardship - rising food prices, poverty, low income and
unemployment. But NAWEC, which enjoys hegemony in the production, transmission
and distribution of essential social services (electricity, water, and
sewerage), says the company desperately need to increase charges to avoid
collapse.
On March 17, 2012 the company’s proposal for a 33 per cent
increase on the above social services was open to debate for consumers to (approve
or disapprove) during a Public Hearing organised by the Public Utilities
Regulatory Authority (PURA). The Voice Newspaper’s Modou S. Joof recounts.
After brief opening statements by the PURA Managing
Director, Mr. Abdou Jobe, NAWEC Managing Director, Mr. Ebrima Sanyang who both
give a background of the tariff review process and a presentation on NAWEC’s
proposal for tariff review by Finance Director Alhagie Jallow – the subject was
open to debate to every Tom, Dick and Harry.
NAWEC will have a very big problem trying to increase
so-called prices for their services, stressed Mr. Pa Modou Faal, Secretary
General of Gambia Workers Confederation. “Gambia is not an oil producing
country,” he said, noting that the company depends heavily on a variety of
imported fuel.
He charged that the company should reveal when last it imported
fuel into the country and whether the company does have other markets were fuel
prices are cheaper. For him, an increase in tariff could increase fuel prices in
the country.
NAWEC commercial director Mr. Nani Juwara agreed. He said
Gambia is not an oil producing country for now, but says the company can
neither control fuel prices nor the importation of fuel into the country.
His managing director, Mr. Ebrima Sanyang explains that
the company does not import fuel in small amounts. “The fuel is procured based
on contracts with our suppliers,” he said.
NAWEC’s expansion project is increasing problems faced by
the company, argues a man who only introduces himself as Mr. Jallow. He
recalled that in 2011 the overall power supply has gone up to 51megawatts,
which was only enough to cover one-third of the country. “Why do you want to
expand when your services has not been improved,” he asked. “As long as we
cannot be assured of improved services, I do not agree on a tariff increase.”
However, Mr. Nani Juwara says NAWEC cannot scale down
expansion. This is a government company guided by policies. If we want to scale
down expansion then we’ll contradict government policies, including the rural
electrification expansion project.
He argues that services have been improved, citing
electricity supply brought to what he called “disadvantaged communities” in
Tallinding and Mandinaba. “If you look our debt, there is no way we can sustain
the company if there is no increment on our tariff,” Juwara said.
The expansion project is the solution to the erratic power
supply, argues Mr. Ebrima Sanyang, saying the Venezuela network upgrading
project in the Greater Banjul region (of more than D331 million) will solve the
problem of obsolete machinery. He assured: “If tariff is increased, service
will improved. We will be able to do maintenance on time, address leakages and
attract investment.”
On PURA, Mr. Jallow said, last year people opposed a 37 per cent proposed increment on electricity.
Why should 99 per cent of the public oppose the proposal and yet PURA
grant NAWEC a 17 per cent increase? He said it’s like a waste of time to call
people to the hearing.
“People have lost confidence in the public hearing, that
is why the poor attendance,” said Mr. Yorro N. Jallow of Ibo Town, who observed
that majority of the attendees are made up of NAWEC and PURA staff, a small
mobilized group from the Consumer Rights Protection Consortium (CPC) and a few
individuals.
But PURA managing director, Mr. Abdou Jobe argues “We’ve
not call people here just to waste their time.” He explain that the Public
Hearing is the six of nine steps required of the utilities regulatory body in
the tariff review process before NAWEC’s application is granted or refused.
The only woman who subscribed to the February 12, 2011 proposal, Aji Haddy Jobe of Bakau says she still favours an increase in price
of electricity one year later. However, Jobe, who is yet to have NAWEC-supplied
electricity in her home, admits people are living in hard times.
“The CPC is concerned that an increase on electricity
tariff will have a multiplier effect and will translate into higher production
cost of businesses and could trigger a proportionate rise in prices of goods
and services,” the CPC said in a statement.
In response, Mr. Nani Juwara said NAWEC has no control
over a projected increase in prices of basic commodities which may come as a
result of electricity tariff increase. He lament that 90% of the company’s
expenditure on (heavy fuel, lubricants, spare parts etc) is beyond their
control. "So we need help. The 33% increase is not enough to
breakeven," he said.
MD Ebrima Sanyang argues that he never heard the CPC raise
voices against the frequent unannounced fuel price increase in the country that
are normally effected without consultations. The CPC had earlier emphasize in a long lists of goods that the proposed
tariff increase could also result to an increase in prices of second-hand clothes,
but Mr. Sanyang disagreed. He said that is very unlikely.
“90 per cent of stakeholders, including designated
consumer groups who were consulted during step-two of the tariff review process
opposed NAWEC’s proposed 33% tariff increase,” a representative of the CPC, Mr.
Alpha Jallow reveals.
PURA MD Mr. Jobe agreed. He said PURA is working in the
interest of consumers and utilities service providers but that does not mean
that if the public disapprove of the tariff increase proposal PURA will have to
refuse the application.
“It has to be thoroughly looked into in the next step of
the process based on the application and the comments during the public
hearing. Then PURA makes a justified decision based on all the steps taken,”
Mr. Jobe explains.
Notwithstanding, the CPC recommends that NAWEC scales down
operations and PURA suspend the review for 6 months to enable establishment of a
taskforce committee of various stakeholders to study NAWEC’s situation and come
up with a workable formula to bail it out;
A final report of NAWEC audited financial accounts made
available to the taskforce to look into its operational cost and effectiveness
in utilization of scarce resources;
A study be conducted to determine network losses and
degree of wastage and leakages; NAWEC and stakeholders explore available
opportunities to review operations and look at alternative renewable energy
sources (solar, wind, biogas etc);
PURA and stakeholders assist NAWEC to recover pending bad
debts and look for alternative sources of funding from within and outside the
country; and
That PURA does not unilaterally approve tariff increment
without another consultative stakeholders meeting.
Another representative of the CPC argues that NAWEC can
never repay its loans of (D3, 198, 859, 422) if it wants to rely purely on
tariff increase. He said NAWEC needs a government bailout or else it will
default in its debt. He blames the company for a lack of maintenance of its
equipments and over staffing.
As usual, Mr. Nani Juwara will not agree. He argued that
the company is manned by responsible people, citing that some of NAWEC engines
are three decades old – still operating 24 hours and has been maintained
rightly despite resource constraint.
“Our staffing has
always been an issue. We are not over staff, we still need more staff. Only
eight per cent of our budget goes to staff salaries and allowances,” he said.
Contradictorily, he said the NAWEC management had
recommended redundancy of 45 staff. This, according to him, is contained in an
internal report by the company. However, no one has lost his job as a result
just yet.
The issue of Senegal's SENELEC Company once faced with
similar financial woes and subsequently bailed out by the Senegal government
was also raised. As NAWEC’s MD explains, the Senegalese Government was able to
tap previously untapped revenue sources to solve their problem.
When the issue of NAWEC to focus on collecting its
outstanding debts than increasing tariff was raised, Mr. Juwara said the company
successfully collects 80 percent of monies owed to it monthly. However, he fell
short of admitting that the remaining 20 per cent has been proving difficult to
collect from the government. “It is only the government that we sometimes have
to “maslaahaa” (compromise),” he said. “NAWEC is own by the government.”
In the absence of a cost-reflective tariff it is important
that we come up with measures on how this (loan) can be paid, Mr. Ebrima
Sanyang added.
At the beginning of the hearing, the moderator Mr. Malick
Jones introduces two panels recording questions, comments and responses, as
experts from NAWEC and PURA.
I was happy to hear you say these are the experts, said
Christiana Jatta, a political science student of the University of The Gambia
(UTG).
What are experts for, she asked. They should be able to
look into the issues affecting NAWEC and come up with tangible solutions to the
problem instead of depending on a tariff increase. She compared "our
experts" with those in Europe who would go to the extent of forecasting
issues that are likely to affect people and give recommendations and measures
to be taken to avert any future problems.
Can't these experts work like that and come up with
reasonable measures to address NAWEC's problem, she asked, arguing she did not
mean to "embarrass" them anyway. Christiana, who suggest it’s high
time for Africans to take their priorities right, laments now-a-days people
knew when they will have or will not have power supply. “You can hear people
saying today we will not have light,” she said, apparently referring to the
ever-increasing shifts adopted to supply power to the most populous region in
the country, Greater Banjul Area.
The managing director of Gambia Postal Services, Mr.
Momodou Ceesay said he did not oppose the proposed tariff increase, but note
that the 33% is far beyond peoples’ income. “We should also remember that the
average wage in this country is D1300,” he said.
He said his office pays one million Dalasis on electricity
annually and a 33% per cent increase means he will spend an extra D330, 000.
For him, access to electricity is in fact viewed as a
human right in some countries in the world, but Mr. Nani Juwara, NAWEC
commercial director argues that electricity is more of a commodity than human
right.
The propose tariff increase also applies to water and
sewerage, but people in The Gambia are more concerned with the cost of
electricity, which has been in erratic supply over the years. No one talk about
water and sewerage and when the moderator urged them to do so, one man claimed
Gambia has the “lowest charges” for water in the sub-region.
They voted 12-3 in disapproval of NAWEC’s proposal;
however, their stance leaves little hope for a refusal of the application by
PURA.
“A bag of rice is costing D1000 and this country is
already heading for a food crisis, yet they want to increase the tariff for
electricity,” grumble an “angry-looking man” who would not introduce himself as
he walks out of the Father Farrell Hall at West Field, Serrekunda where the
public hearing was held.
The Author, Modou S. Joof, is the news editor of The Voice newspaper in Banjul. He is also a contributor to the Daily News newspaper and the Market Place Business Magazine in Banjul and the African Voice newspaper in Dublin.
As IIJ
Alumni, he also writes for the IIJ-Weblog
and the publisher of The North Bank Evening
Standard.
He twits @thenorthbankeve and
you can also follow him on Facebook: The-North-Bank-Evening-Standard
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