Managing Director of Bulk Oil Storage and Transportation Company Limited (BOST) Mr Edwin Alfred Provencal has exposed former President John Dramani Mahama on a $642 million debt the erstwhile National Democratic Congress (NDC) government bequeathed to the current administration.
The NDC presidential candidate whilst on campaign tour of Tema in the Greater Accra Region, claimed he will revive the ‘sinking Tema Oil Refinery (TOR) and BOST’ when voted into power.
He claimed BOST had declared huge profit under his administration.
However, during his tenure as President, Mr Mahama handed over both TOR and BOST to his bosom friend, Mr Kingsley Kwame Awuah-Darko as Managing Director at the same time.
This led to mismanagement of the two state-owned strategic companies under the Mahama-led NDC administration.
Accordingly, the current BOST MD indicated that the performance of the former President with respect to these two important national institutions makes it impossible to believe any promise of restoration.
He indicated that contrary to the propaganda being churned out by the main opposition NDC and its presidential candidate, BOST is at its most efficient peak and therefore does not need restoration from those who sunk it to its lowest ebb in the first place.
In response to the former President Mahama’s pledge on BOST, the MD of the company outlined what he said were unalienable facts of the mismanagement that occurred under the Mahama-led NDC administration.
According to him, as at January 2017, BOST had a backlog of unedited accounts from 2014 to 2016 and wondered how the then government could declare profits during the period.
He disclosed that the 2016 audited accounts of the company showed a total loss of GH¢459 million, the highest loss ever in the history of BOST.
“In January 2017 BOST owed US$624 million to suppliers, BDCs and related parties in respect of crude oil imports for processing at TOR and refined products, which got lost from BOST tanks. Can you imagine how many hospitals, schools & roads this $624million could have built?
“Products not accounted for by BOST from BDCs between 2010 and 2014 amounting to $35.913 million hanged on the neck of the company from eight BDCs while at January 2017, 15 out of 51 tanks owned by BOST across the country were non-operational,” he said.
He disclosed that the Tema-Akosombo Product Pipeline (TAPP) had been non-operational since 2013 before the New Patriotic Party (NPP) government took over while the 77Km of 12” pipes that BOST had acquired in 2008 for construction of a pipeline between Accra Plains and Akosombo Depots were still stuck in Houston and incurring huge additional costs after 9 years.
“In January 2017, 100% of our marine assets (all four BOST river barges, tug boat and floating dock) were broken down and non-operational, which limited transportation of petroleum products across the country. Our Bolga-Buipe pipeline and Bolga Depot were not operational.
“The CBM, which was built on a Build-Operate-Transfer basis for BOST was transferred to TOR and subsequently leased to a South African Company under the single management for BOST and TOR. As we speak, BOST receives no revenue from this operation and TOR is only limited to dividends declared and paid by the South African Company”, Mr Provencal pointed out.
TOR, he said, also owed BOST to the tune of $13.3 million as at January 2017.
Mr. Provencal argued this cannot be evidence of good management of these national assets.
He stressed that under the leadership of President Nana Addo Dankwa Akufo-Addo, BOST has regained its glory days.
Auditing of the company’s accounts from 2014 to 2018, he said, has been completed while the 2019 audited accounts are expected to be completed by first quarter of 2021.
“Whereas the 2018 account showed a 70% reduction in losses from the previous year, the 2019 management account further indicated a 41% reduction in the loss level from the year 2018.
“This steady decline in the loss level of the company from 2017 to 2019 shows that during the year 2020, the company will likely make a profit or at-worst, break even,” he said.
$624m debt repayment
According to Mr Provencal, of the $624 million owed to suppliers and related parties by BOST, 97% has been settled as at October 2020.
This, he said, is a huge progress at getting the company to work again and noted that some of the debts accrued out of losses on BOST/TOR crude import and refinery.
“Of the US$566 Million, BOST paid US$408 million from its own resources amounting to an average of US$136 Million per year. The amount paid from the companies internally generated resources amounts to 72.08% of the total amount settled out of the outstanding debts to suppliers and related parties as at 1/1/2017. Who will refer to this as a total mismanagement of a strategic state enterprise,” he quizzed?
Potential savings of $21 million
Mr Provencal disclosed that an in-house committee vetted the $36 million claim by the eight BDCs and reviewed the volume of claims downwards to $15 million after diligent reconciliation, which represents a potential savings of $21 million.
The Managing Director indicated that government gave a support of US$138 million through the Ghana National Petroleum Corporation (GNPC) to help reduce the exposure of the company to the suppliers and noted that 24.4% of the amount has been repaid.
BOST, he said, has also made a payment of $534,000 towards the rehabilitation of the Tema-Akosombo-Petroleum-Product-Pipeline with the work expected to be completed in the second quarter of 2021.
According to him, two of the four river barges that have been out of commission since 2013 were brought back on stream in October 2019 and are currently operational.
“These two barges generate GH¢400,000 per voyage between Akosombo and Buipe depots; an additional source of revenue to the company,” he said.
He averred that for the safety of the BOST Depot at Buipe and the lives of people in the area, an amount of money was donated for the repair of the fire tender at the Buipe Station in January 2020.
The repair works, he said, are over and the equipment is on standby to provide fire safety for the depot and the people in the area and added that the Bolga-Buipe petroleum Product Pipeline is also complete with export of products to commence in November 2020.
This, Edwin Provencal said, is clear evidence that Ghana is working again under the leadership of President Akufo-Addo and questioned how the NDC flagbearer can replicate this path to true transformation the NPP has recorded.