Assessment of Sewerage Tariff in Accra

Abstract

Adequate sewerage tariff determination has been a challenge to the Accra Metropolitan Assembly (AMA) for effective management of sewerage in Accra. Hence the aim of this study is to assess the current tariff system for provision of sewerage services and how its review can improve upon the system in Accra. The study which was conducted from July 2009 to December 2009 looked at the sewerage tariff model being implemented, willingness and ability of sewerage users to pay for the service, full cost recovery tariff and operation and maintenance (O&M) cost recovery tariff as well as the amount of subsidies to be paid to support proper delivery of sewerage services in Accra. While the Statistical Package for Social Sciences was used to analyse data to determine the willingness and ability to pay for sewer usage, the Average Incremental Cost was used to determine the O&M and full cost recovery tariffs.  The results indicated that while full cost recovery tariff and O&M cost recovery tariff per month were determined to be GH¢ 17.06 per household (GH¢ 2.06/m³) and GH¢ 7.12 per household (GH¢ 0.86/m³) respectively, the current average sewer user fee is GH¢ 5.14 per household (GH¢ 0.62/m³). Therefore the current sewer user fee is inadequate to generate enough revenue for the service provider to increase the level of service needed by customers. It is therefore recommended that sewer user charges should be increased progressively to achieve O&M cost recovery and full cost recovery, subject to affordability. Also major industrial polluters should be charged on a two-part tariff system based on volume of wastewater and level of pollution. Public education and awareness of tariff increases should be done for customers to understand the main components of the tariff and what the increased revenue resulting from increased tariff will be used for, so as to enhance payment. For the regulatory body (ies) to fix realistic tariffs or request for the right amount of subsidy within a particular period time, elaborate studies on sewer user fees must be conducted regularly (once every other year).

Keywords: Sewerage, block tariff/pricing, fixed charges and gap financing, Fair/Equity pricing