2% URA Levy Already Enforced on Customers’ Water & Electricity Bills

by Jean-Baptiste CALO

Port-Vila, September 10th, 2017— It is done, households in Port-Vila,  Luganville, Lakatoro-Norsup in Malekula, and in Lenakel Tanna are now paying a 2% URA levy or indirect tax that has been recently included in their water and electricity invoices.

Sample of Electricity Invoice with new introduced 2% URA levy or surplus included in the bill.

Partial scan of an electricity invoice with the newly introduced 2%  levy labelled as the URA surcharge by the Utility company who is charging and collecting the fee from the consumers on behalf of the Utility Regulatory Authority (URA). The  levy is purposely framed including the notice below the invoice that says in Bislama that this levy is billed by the utility company to the customers in accordance with the Utilities Regulatory Authority Amendment Act No19 of 2016,

In addition to the cost of water or electricity they have used and the value added tax, consumers are now going to pay for another 2% indirect tax called the URA levy or what some utility companies label in our water or electricity invoices as the URA surcharge.

Although no confirmation was made to the press to announce to the customers about the date of the implementation of that new levy, the information about the  introduction of the 2% URA levy has already been subject to an amendment of the URA Act in Parliament in 2016.

When contacted by email at the end of last week as  he was then out the country , the Chief Executive Officer of the Utilities Regulatory Authority, Dr. Hasso Bhatia confirmed to Vanuatu Info Online that the assessment to utilities or the overall amount of money that will be collected by the utility operators annually from the  2% URA levy should be around VUV70 million (approximately USD 678 294,59).

Mr. Bhatia explained that those funds will be used for the URA day to day operations, and that a little part of that money could be needed by the Vanuatu Government.

The introduction of that levy is charged to the customers via their invoices by the water and electricity providers in accordance with the Utilities Regulatory Authority (URA) Amendment Act No19 of 2016.

M. Bhatia stressed that there will be no surplus and that the URA does not fund projects from these fees.

He added that all the water and electricity extension projects are done by utility companies through their regular funds.

According to a reliable source, this type of levy is a common practice in various countries of the world where utility regulatory authorities established.

In Vanuatu, utilities manage and operate assets that belong to the Government. They produce electricity to supply distribution network of their assigned concession. They also maintain the poles and the connections to the homes.

There are currently two operators in four concessions:

Union Electrique du Vanuatu Limited (UNELCO) is a private company and a subsidiary of GDF Suez. UNELCO has been producing and supplying electricity and water in Vanuatu since 1939. It has concessions on Efate, Malekula and Tanna islands.

The second second one is Vanuatu Utility Infrastructure Limited (VUI). It is a subsidiary of Pernix Group, Inc. VUI started operating a concession in Santo on 1 January 2011 after signing an Operation and Maintenance agreement with the Government of Vanuatu for the Luganville electricity concession.

There are also other minor certified water supply providers who have established their own network in specific limited areas, particularly in the Port-Vila surrounding areas.

It is the case of Mr. David Russet who is providing water supply to all the residents of  Beverley Hills, Bellevue, Montmartre areas; Mr. Franconeri who is doing the same thing with the residents of Bukura and Devil’s point in south west Efate; and also Terry Kerr who’s supplying water to the residents of his subdivision of Teoumaville.

URA is an initiative of the Vanuatu Government with financial support from AusAID through the Governance for Growth (GfG) Program in cooperation with the World Bank.

The funding from Ausaid and the World Bank is coming to an end and the authorities had to come up with way to sustain the operations of the Utility Regulatory Authority.

Therefore as it is commonly done elsewhere in the Pacific, the Vanuatu government via the ministry and department concerned together with the assistance of the URA board of directors have decided to introduce this levy indirectly imposed to the customers through their water and electricity bills.

And that levy is collected by the utility companies.

According to the information gathered by Vanuatu Info Online, the 2% URA levy is applicable to  every services that the water and electricity providers are offering to their customers.

It includes the Smat Meta customers whenever they refill  their prepaid electricity meter. It is also applicable to all the trenching works provided by the utility providers to their customers.

To cut the long story short, the  VUV 70 million annual fee collected by the utility companies will come out of the consumers pockets.

The Utilities Regulatory Authority (URA) is the economic regulator of electricity and water services in Vanuatu. URA approves tariffs for electricity and water services for private providers under Concessions Contracts and the State-Owned water enterprise. URA also assists in resolving consumer complaints and advises the Government on policy and legislative matters related to electricity and water.

URA was created in part to promote the consumers long-term interest and to increase access to safe, reliable and affordable electricity and water services throughout Vanuatu.

In the electricity sector, URA monitors the concessions operated by private utilities in Luganville, Port Vila, Malekula and Tanna islands.

URA may also regulate the small utilities operating outside the concession areas.

In the water sector, the Public Works Department supplies the town of Luganville and other small communities in the country, and a private company operates in the concession area in Vanuatu’s capital city, Port Vila.

Some of the objectives or the URA are to enhance rapid access to power and water, especially in outlying and rural communities; to contain prices for these services to affordable levels through efficiencies in operations, fuel mix, renewable; to create incentive mechanism through pricing and public education to promote efficient use of power and water resources; to ensure safe and reliable services through standards of safety, reliability, performance monitoring and enforcement; to develop mechanism and tools to enhance consumer protection, consumer care and improved relationships between service providers and consuming public; and also to make electricity a vehicle for growth in Vanuatu by offering business competitive prices and reliable supply in the region…

ENDS/-

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