Henry Ofori, the Chief Executive Officer of Hydrocol Limited, operators of the Teshie desalination plant, has warned that abrogating the contract with them may cost Ghana over $126 million.
In an interview on Eyewitness News on Monday, Mr. Ofori said it will not be advisable to terminate the contract as being suggested by the Public Utility Workers Union (PUWU).
contextly_sidebar id=”1HgkZaKRzj55E2voyhYxXLqBVPN6mdmw”]He said the termination of the contract would “cost Ghana dearly” and even more than the $126 million cost of the plant.
“You have private investors involved in this and there was a lot of money that was borrowed for this project… I can’t give you an exact figure, but it will cost more than $126 million to terminate such a project,” he warned.
Mr. Ofori further blamed the woes of the plant on what he said was the Ghana Water Company Limited’s (GWCL) failings in revenue collection.
The GWCL is reportedly making GHc 6million in losses monthly from the plant, which cost $126 million to set up.
A consolidation of all the costs of the plants culminates in GWCL buying the water from the plant at about GHc 6.5 per cubic meter, and selling at the regulated Public Utilities Regulatory Commission rate of about GHc 1.5 per cubic meter.
This arrangement meant that, the GWCL is said to be losing about GHc5:00 for every cubic meter of water sold from the Teshie Desalination Plant.
Citi News‘ checks indicate that the GWCL 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.
We’re in talks with gov’t on our future
Meanwhile, the GWCL has indicated that it is in talks with government to decide on the way forward.
The Chief Executive Officer of GWCL who made this revelation on Eyewitness News , Clifford Braimah said: “Government is working on it. We have series of meetings, series of interactions and then we are getting into the conclusion stages so we need some time to finalise whatever we are doing.”
“It is a project for the Republic of Ghana. It is a PPP project between the government of Ghana and the people who promoted the project. It went through Cabinet to Parliament and so it is a national project. If there is going to be anything, we have to go through due process to take any decision.”
Background
In 2011, the Government of Ghana awarded a contract to Befesa Desalination Development Ghana for the establishment of the sea water treatment plant to produce clean water, which will be channeled into the pipelines of GWCL.
Messrs Befesa Limited, an engineering firm, was contracted by the government to build the desalination plant, operate to defray its cost, and hand over to the GWCL after 25 years.
The project was executed by Abengoa, a Spanish company, and Sojitz Corporation, Japan’s largest importer of rare earth metals.
The two hold a 94% equity in the project. The plant was designed, constructed and is being operated by Befesa Desalination Developments Ghana, a joint venture of Abengoa Water Investments Ghana, Daye Water Investment (Ghana), and their local partner Hydrocol.[
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By: Jonas Nyabor/citifmonline.com/Ghana