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A Policy on Public Utilities
The Consumers’ Union believes that
every consumer has a right to the basic services. Today,
the purpose of these basic services is that everyone can
enjoy a good standard of living.
The Consumers’ Union acknowledges that
these public enterprises played a very important role in
the development of the country as they set up the
infrastructure that placed our country at par with other
countries.
They also guaranteed that these basic
services are available to all as pricing included a heavy
social element. It was because of this that all
households in the eighties have all essential services.
However, they sought the protection of
the law to refrain from being exposed to compensation
claims by consumers. These claims were made by consumers
for any bad service that may have caused them damage.
Today , it is time that the consumer gets his full share
in return. This protection should be lifted once
and for all.
It is a fact that due to the small size
of the country, the service offered by these enterprises
will be monopolistic in nature. They cannot be given in a
market of free of competition. The great probability is
that the situation would not change, albeit there is
privatisation.
The fact that the sector of essential
services is in the public sector poses another problem,
government interference. It is common knowledge that this
interference has led to overemployment in these
enterprises. Also political interference has led to great
inefficiencies. These inefficiencies led to higher costs
and shoddy service. Since at the end of the day it is
consumers who pay for these inefficiencies, there is a
widespread criticism of these enterprises.
Measures
In order to remedy this situation,
several measures have to be taken. Amongst these we
recommend the following:
1.
Efforts
have to be made to have a more competitive market in the
future.
2.
Political interference has to be eliminated once and for
all. The need for more transparency will serve as a
barrier against political interference. This can only be
achieved if the employees in these enterprises resist
political interference. They have to resist pressure by
the government whenever the interests of their enterprise
are being threatened by the politicians. This concerns
more the officials rather than those employees who are at
the lower level of the scale. On the other hand, it is
necessary that the employees are assured that they will
not be discriminated because they stand up to the
politicians.
3. These
sectors have to be controlled by regulators. These
regulators have to be independent of the government of the
day and report directly to Parliament. Whether there
should be one regulator for each service or for all is a
problem that we have to face. There are pros and cons for
each set-up. Given the size of the country and the lack
of human resources able to task must be given its due
consideration.
4.
These
enterprises which are presently providing these basic
services should, at the first instant, guarantee certain
minimum basic services in favour of the consumer. If
these services are not maintained, the consumer has the
right for compensation, which compensation will be decided
upon by an independent body.
The Price
The price for these services is a very
controversial subject. On one hand, this determines how
many consumers make use of these services. Thus if the
prices are high, consumers can be denied their use. On
the other hand, price should also be indicative of how
much these services are costing society.
We believe that the price of the
service offered has to be approved by the Regulator. This
price has to reflect the price in a competitive market.
It should not reflect the historical costs or monopolistic
pricing. It should not include the social element. It is
only by this means that the interests of all be
protected. The Regulator has to justify the approved
price.
The Social Aspect of the Price
The social aspect forms an integral
part of this sector. These basic services are part and
parcel of one’s everyday life. Having high prices, even
if justified by the costs, will deprive certain sectors of
our community of these services. This is something that
the Consumers’ Union will not accept.
This puts us back to the question of
whether or not the social pricing should be included in
the price. We believe that there should be a social
subsidy for special groups but the price should not
include this subsidy as the practice is currently. Through
this means each and every consumer will know the cost of
these services. Another advantage is that political
interference will diminish to a certain extent. Also
there is the probability that the inefficiencies of these
enterprises will not be borne by the consumer.
The government will still be
responsible to deliver the social element deemed
appropriate to guarantee usage of these services by all to
those special groups in need of subsidy. It is only then
that these groups have their fair share of the services
provided. It is only by this action that these groups
will never be excluded from society.
Customer Charters
The interests of the consumers in these
services is not linked only through the price. There are
other important aspects. It is imperative to formulate
customer charters which will bind these enterprises to
give good quality services. The customer charters should
act as benchmarks and quality and services should be
upgraded periodically. We believe that the Regulator
should be responsible both to guarantee that these
Customer Charters are adhered to and also to see that the
service is upgraded.
We believe that it is only through such
a policy that we guarantee consumers’ interest in both the
short and the long run.
October 1999
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