The Public Utility Workers’ Union (PUWU) is calling on Government to conduct a thorough investigation into the role played by public officials in the negotiations of the Messrs Befessa agreement to build a desalination plant at Teshie.
The Union is also calling on the Ministry of Finance, as a matter of urgency, to take appropriate steps to take off the albatross hanging around the neck of the Ghana Water Company Limited (GWCL).
A statement signed by Mr Michael Adumatta Nyantakyi, General Secretary of PUWU and copied to the Ghana News Agency in Accra on Monday, said the agreement had seriously weakened the capacity of Ghana Water Company Limited (GWCL) to deliver on its mandate.
“PUWU calls on Government, which guaranteed the agreement, to take over the financial commitments and transaction losses suffered by the GWCL in the purchase and sale of water from the desalination plant, to save the Company from potential collapse so that it can continue to deliver potable water to Ghanaians.”
The statement said, in December 2012, the GWCL signed an agreement with Messrs Befessa to build a desalination plant at Teshie, in Accra, to produce potable water from sea water for sale to GWCL for distribution to residents in the Teshie-Nungua area.
It said this agreement was ratified by a resolution of Parliament and the desalination plant, an investment by a private entity, started operation in February, 2015.
“Under the agreement, the GWCL is required to pay capacity charge of $1.4 million per month to Messrs Befessa. This charge is payable whether the plant is working or not. Again, GWCL is obliged to pay the electricity bills of the desalination plant which stands at an average of GH¢3 million per month (for 2017).”
The statement said, the GWCL buys water from the desalination plant at GH¢6.50 per cubic meter and sells it to customers at the PURC approved tariff of GH¢1.50, therefore, for every cubic meter of water purchased and sold, GWCL losses GH¢5.00.
“In addition, GWCL pays the invoice amount in US dollars even though it sells the water in Ghana cedis, thereby accumulating more losses as a result of exchange rate differentials.”
It said in 2015, GWCL paid to Befessa a total of US $1.8 million leaving an outstanding indebtedness of $13.9 million. Also in 2016, even though GWCL was making a net loss of about GH¢7.2 million a month, the Company was compelled to pay Befessa a total of $ 23.7 million leaving an outstanding indebtedness of $8.1 million.
The statement said, as at the end of September 2017, the GWCL had paid a total of $12.9 million to Befessa leaving an outstanding indebtedness of $7.2 million. The company continued to make a net negative cash flow of an overage of GH¢6.02 million per month.
It said these expenditures by the GWCL on the desalination plant under the agreement, has left the Company in a precarious position affecting the cash flow and expansion works.
The statement said there is no doubt that this agreement between GWCL and Messrs Befessa is not only obnoxious but also beat common business sense. It appears to be a case of a giant conspiracy between foreigners and their local collaborators and public officials, with political influence, to loot the country and share the proceeds among themselves under the guise of a private sector investment or private public collaboration.