GWCL $115m Teshie-Nungua Desalination Rip-Off Ghana Loses $1.5m A Month

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The Government of Ghana loses an amount of $1.5 million every month as a result of what is seen as the bogus contract entered into between the Ghana Water Company Limited and Messrs Befessa Ghana Ltd for the construction and operation of the Teshie-Nungua Desalination Plant.

Befesa Ghana Limited, an engineering firm, was contracted by government to build the desalination plant, operate it to defray its cost and hand over to the GWCL after 25years.

Closely associated with the deal, which was signed by Kweku Botwe, then Managing Director of GWCL, include Goozie Tanoh, a leading member of the National Democratic Congress.

Befessa Ghana Limited, operators of the plant whose construction was completed in February 2015, at a cost of $115 million, has over the last nine months supplied an average of 650,000m3 of water per month to the GWCL.

Credible information available to the Daily Statesman indicates that the monthly financial obligation to the GWCL for the supply is $1.5 million per month, in addition to $300,000.00 paid to the Electricity Company of Ghana for power supply.

Strangely, however, the water company gets less than $300,000.00 from the sale of the water every month, which means the nation loses a whopping $1.5 million every month.

The water contract operates on the principle of “use or pay” contract, which compels GWCL to pay fully for the quantity of water produced by the plant, which is more than the distribution network can supply to its customers.

According to Engineers who spoke to the Daily Statesman, the “head” or elevation of the plant is not high enough to push the water by gravity to enable it reach more people and generate more revenue.

They also see the location of the plant at Teshie to be problematic because residents there are poor, and it will therefore be unreasonable or unacceptable to charge them more than everyone else.

“Patronage is also low because of the aesthetics: the “yuk factor”…..this is where the residents poo and dump rubbish,” one engineer told the paper. Engineers say it would have been better to have located the plant at Tema for the water to be used as raw material for industries.

“That would limit customers to a few key industries; and it would make for easier, more efficient revenue collection. Ghana Water Company could then charge higher/ more commercial rates per unit,” one engineer explained.

Alternatively, the engineers believe the best option would have been to bring the water from Ada or Sogakope, where there is too much fresh water to require desalination.

“If the decision makers were really thinking, we could have built a pipeline from the Volta Lake (largest freshwater lake in Africa) for $40 million and gotten the same effect. Or the Ada one would have been cheaper,” one of them explained further.

Meanwhile, the Public Utility Workers’ Union has described the water contract as “bogus,” expressing fears that it is currently rendering the GWCL bankrupt.

While addressing the 11th Quadrennial Delegates’ Conference of the Union in Kumasi, the General Secretary, Bondzi-Quaye disclosed: “Befessa sells this water to GWCL in bulk at $1.50, an equivalent of GH¢6.75 per cubic meter which they, in turn, are compelled by the Public Utility Regulatory Commission to sell to the public at GH¢1.47 per cubic meter. So for every cubic meter of water that GWCL buys from Befessa, it loses a whopping GH¢5.28.”

He added that, the plant’s average electricity consumption of GH¢1.4million per month is paid for by GWCL, according to the agreement.

“In addition, GWCL is under obligation to pay GH¢11.6million as capacity charge under the contract…,” he added.

Mr Bondzi-Quaye expressed regrets about the fact that consumers of utility in the country receive poor services resulting from bad contracts entered into by Government.

“…consumers, through no fault of theirs, have had to suffer serious deficiencies in service delivery of the utility companies through the supply of sub-standard materials through contracts by powerful and politically well-connected personalities while authorities, for very obvious reasons, dare not complain…that is why I am bold to say that, the challenges militating against efficient and reliable service delivery in the sector are self-inflicted,” he complained.

With the experience of the current challenges faced by the country under the water contract between Befessa Ghana Limited and GWCL, Mr Bondzi-Quaye said the union would not allow the Electricity Company of Ghana to be privatized

 

Source: Daily Statesman