Vice President Mahamudu Bawumia has challenged State Owned Enterprises (SOEs) to aggressively review their mandates to contribute their quota towards national development programmes.
According to him, a well-focused and managed SOE was crucial towards sustained national development, therefore, the Managements and Boards of such entities should live up to expectation.
The Vice President made the call in Accra when he commissioned the new Head Office of Bulk Oil Storage and Transportation Company Limited (BOST).
“I was delighted when I was informed that for the first time in ten years, BOST made a profit of GHS¢163 million in 2021. It is evident that the turnaround of BOST has taken root,” he said.
The Vice President congratulated the Board, Management, and staff of BOST for ensuring the prudent management of the resources of the Company on behalf of the Government and people of Ghana.
“This should be the blueprint for SOEs to enable them to contribute to the execution of government policies.
“Imagine if 100 SOEs each made GH¢163 million profit every year,” Dr Bawumia noted.
The BOST was established in 1993 to operate as a monopoly in the petroleum products storage and sales business until 2004 when the government liberalized the sector by introducing privately owned Bulk Distribution Companies (BDCs).
At some point in its history, despite its wide geographical presence across the country, with assets such as storage facilities, pipelines, and marine infrastructure, BOST could not fulfil its mandate due to a number of reasons, including the freezing for almost a decade of the BOST margin, intended for developing, operating, and maintaining the company’s storage and transmission infrastructure.
This resulted in the lack of investment in the maintenance and upgrading of the infrastructure.
Furthermore, inadequate management systems and corporate governance led to significant operational losses recorded by the company.
The records indicate that as at 2017, BOST was saddled with trade liabilities of USD 624 million, legacy loans of GH¢284 million, BDC claims of USD 37million, CAPEX liability of USD 109 million and GRA tax liability of GH¢47 million
Additionally, 30% percent of its tanks had been decommissioned, with three out of the company’s six depots non-operational; four river barges were out of commission; the total network of pipelines (361km) across the country were out of service and 77 kilometres of 12-inch pipes, procured under a US EXIM facility, had been detained in Houston for over 10 years as a result of contractual disputes.
Moreso, BOST accounts have also been unaudited for three years, making it difficult to determine the Company’s financial position.
However, through the proactivity and major reforms undertaken by the present Board and Management, BOST is now a shining example of an effectively run State-Owned Enterprise, Dr Bawumia stated.
The Vice President expressed delight that in 2017 the Company’s new Board and Management ensured that 13 out of the 15 defective tanks had been repaired, all four river barges were fixed.
Also, all pipelines out of service were repaired whilst obsolete pumps, meters, and loading arms were replaced at BOST depots.
“The result has been an increase in the utilization of BOST’s revenue-generating assets from 34% in 2019 to its current level of 97%.
“The increase in the BOST margin, from 3 to 6 pesewas per litre in 2019 and subsequently to 9 pesewas in 2020, has contributed significantly to the execution of these projects,” Dr Bawumia said.
Mr Ekow Hackman, the Board Chair of BOST, in his welcome remarks, hinted of even more reforms in the Company’s operations, including automation of BOST depots across the country.
The new Head Office complex was conceived in 2015 but bedevilled with challenges over the years
It has 7 floors, including a Board Room, office suites, kitchenette, three elevators, two generators and a 100 car parking space.
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