Business News of Wednesday, 4 October 2017
Recommendations from government’s review of the Teshie Desalination Plant said to be draining the Ghana Water Company of some GHc 6 million monthly will be ready in two weeks.
The losses incurred could be as high as GHc 9 million, according to the Ghana Water Company Board Chair, Alex Afenyo-Markin.
He noted on Eyewitness News that “the reality is that it [the desalination plant] is draining us financially and we are looking at it.”
“…the contention has been every month, we produce at the cost of GHc 11 million, and we generate revenues of GHc 2 million. There is a deficit and it has been so consistently.”
As far as the committee’s mandate is concerned, Mr. Afenyo-Markin said: “we would want to understand whether or not there are some internal issues that have caused this high cost of production or that the financial engineering was not properly situated.”
The Ghana Water Company buys water at about GHc 6.5 per cubic metre, but sells at the regulated rate of about GHc 1.5 per cubic meter.
Citi News’ checks indicated that, the Ghana Water Company makes payments of GHc 8 million a month to the financiers of the project, although it makes only GHc 2 million by supplying treated water from the plant.
The committee will peruse pertinent documents in a bid to properly assess the cost component and reconcile conflicting information.
“We need to get some documents. We have sighted some documents that says something and others saying another, so we have asked the sub-committee to look into the cost component and how a decision was arrived at when it was going to be a debt on the side of Ghana Water from the onset.”
So far, the Ghana Water Company has paid in excess of $36 million, which the company’s Board Chair said could have gone into other projects.
“In two weeks, there will be a report. We will take a firm decision, make the report public, engage on the outcome of our decision and I am sure we will be satisfied” he said.
Mr. Afenyo-Markin noted that, the Ghana Water Company was not singling out the Teshie Desalination project in its review of the company’s operations, and that “there other things on the table.”
“We are looking at how to do things that sustain the operations of Ghana Water without the government having to incur more debt in the supply and production of water,” he said.
In April 2015, the $126 million plant was commissioned to process sea water into potable water for consumers in Teshie Nungua and surrounding areas. It is estimated that it serves 500,000 people with an estimated 13 million gallons or 60,000 cubic meters of water per day.
In 2011, the Government awarded a contract to Befesa Desalination Development Ghana for the establishment of the treatment plant to produce clean water.
This public-private partnership arrangement will see a company, Abengoa, operate the plant for 25 years, and then transfer its management to GWCL.