Ghana Water Company Threatens Plant Shutdowns Over 280% Tariff Rejection

By News Ghana 

September 11, 2025

Ghana Water Company Limited has warned of potential treatment plant closures if regulators reject its proposed 280 percent water tariff increase, blaming illegal mining pollution for unsustainable operational costs.

The state-owned utility company presented its dramatic tariff adjustment request to the Public Utilities Regulatory Commission during stakeholder consultations, citing rising costs of treatment chemicals, frequent damage to equipment, and operational challenges caused by the heavy pollution of water sources from illegal mining activities known locally as galamsey.

Michael Klutse, Chief Manager of Corporate Planning at Ghana Water Company, revealed alarming increases in chemical treatment costs during a September 9 interview with JoyNews. He explained that chemicals have jumped from the fourth or fifth largest expense category to become the company’s second-highest operational cost.

The impact at individual facilities has been particularly severe. At the Bomfa treatment plant, chemical usage has increased forty-fold over recent years, with weekly consumption of ten alum bags now required daily, while current operations demand 40 bags annually compared to previous levels.

Klutse emphasized that the company seeks only cost recovery rather than profit generation, warning that continued operations under current tariff structures remain financially unsustainable. He disclosed that the company has already shuttered at least one treatment facility recently, with additional closures threatened if the proposed adjustment fails to receive regulatory approval.

The tariff proposal has generated significant public opposition, with many Ghanaians questioning the justification for such dramatic increases amid economic challenges including currency depreciation and inflation concerns.

Ghana’s water crisis extends beyond treatment costs, with regulatory officials warning that illegal mining activities could render the country “water poor” within the next decade and a half. The Environmental Protection Authority estimates that restoring polluted water bodies could cost Ghana at least $300 million.

The illegal mining crisis has forced previous plant closures, including a major facility serving Tarkwa, Ghana’s largest mining hub, due to severe pollution levels exceeding treatment capabilities.

Energy policy analysts have cautioned that ordinary consumers will bear the heaviest burden if steep utility tariff increases receive approval from regulators, while some parliamentary committee members have expressed strong opposition to the proposals.

The Public Utilities Regulatory Commission continues stakeholder consultations as it reviews the water company’s request alongside similar proposals from other utility providers seeking significant tariff adjustments for 2025.

Ghana’s water security challenges highlight the broader environmental and economic costs of illegal mining activities, which have contaminated major water sources nationwide and forced utilities to implement increasingly expensive treatment processes.

The company’s financial pressures include substantial debt servicing obligations, with loan repayments representing approximately one-fifth of total revenue requirements, further constraining operational capabilities.