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PUC readjusts utilities tariffs as of November 1 |30 October 2013

As from November 1 the government will embark on a programme to readjust water, electricity and sewerage tariffs for a period of 10 years, it has been announced.
The Minister for Environment and Energy Rolph Payet made the announcement on Monday.

As per the readjustment, for the first two years electricity consumers using less than 400 units as well as commercial users will not be affected by the readjustments.
 
Domestic water consumers using less than 10 cubic metres of water will not see any change in their bills for the first two years even though the tariff will increase.

 This is because the R25 environment levy on all water bills will be reduced by R10 and this will also apply for all commercial tariffs – 0-5 cubic metres – for the next two years.

Yesterday during Question Time in the National Assembly, Minister Payet gave more details on the programme when he answered an urgent question on the issue.

The leader of government business Marie-Antoinette Rose asked Minister Payet to explain why the readjustments were necessary and what is being done to ensure the more vulnerable groups in society are protected from the impacts.

Minister Payet explained that the readjustments are aimed at making the Public Utilities Corporation (PUC) financially  viable  so it can carry out a number of planned investment projects over a 10-year period and these have been estimated to cost R4 billion.

The projects include expanding electricity power stations on Mahé and Praslin, new distribution lines for Mahé and Praslin, increase water treatment storage and distribution capacities, continue the project to replace water pipes, replace the Victoria sewerage system which is over 30 years old, install new sewerage system at Pointe Larue, Au Cap and Anse Aux Pins among others.
 
Minister Payet explained that the two-year grace period will allow utility consumers to review the way they use energy at home.

“Consumers can do a lot at home to protect themselves and reduce their energy consumptions,” said Minister Payet.

There he cited putting in place measures to harvest rain water, measures to reduce water use in the kitchen and toilets and replacing ordinary bulbs with energy saving ones among others.
 
He said the government is, meanwhile, also putting in place structures to help consumers with the above measures.

“The Environment and Energy ministry is in talks with the Ministry of Finance, Trade and Investment to get commercial banks to put in place credit facilities to help consumers acquire energy-saving equipment to reduce their energy consumption, thus resulting in smaller bills to pay,” he said, adding that more details on these will be given before the end of the year once the talks have been finalised.

He said his ministry in collaboration with the Energy Commission is also working on educational programme for consumers.

Minister Payet explained that there are a number of factors to be considered in the tariff readjustment process and these include economic growth, cost of living, the cost of the different projects, foreign currency rates among others.

He said Seychelles has received help from the World Bank to work on the new tariffs which take into consideration the specificities of Seychelles as a small island state so as to come up with something that translates clearly to consumers how much it costs the PUC to put in place all the necessary utility infrastructure.

Minister Payet explained that it is important to have in place a tariff system which is transparent with all   the necessary components incorporated to provide for future energy providers, other than the PUC and to which people can easily relate.

“The tariffs are also in line with the economic reform programme which Seychelles embarked on with the help of the International Monetary Fund (IMF) in 2008.
 
Minister Payet said the new tariff system will be carried out and managed through the Seychelles Energy Commission and not the PUC as it has been the case.
 
“This will clearly define the guidelines and allow for a level playing field for other stakeholders to join the energy providing sector,” Minister Payet added.













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