Ghana union calls for review of Teshie-Nungua water purchase deal
Ghana's Public Utility Workers Union (PUWU) has called for a review of a water purchase agreement between supplier, Ghana Water Company (GWC), and Korean firm, BEFESA Desalination Developments Ghana, explaining that the current agreement jeopardized the water supplier.The union said that under the agreement relating to the Teshie-Nungua Desalination Water Project, GWC buys the water from BEFESA - which constructed the US$ 110 million seawater desalination plant last year - at US$ 1.50 /m³ and it retails it at the Public Utilities Regulation Commission's approved tariff of GH¢ 2.39 /m³ (US$ 0.59 /m³). With a power bill for the plant of GH¢1.3 million (US$ 300,000) a month, GWC is, according to the union, losing some GH¢ 3.39 /m³ (US$ 1.65 /m³) from the BEFESA deal.
The electricity costs at the 60,000 m³/d Teshie-Nungua plant brings GWC's monthly electricity bill to GH¢ 11 million (US$ 2.75 million) which deputy general secretary of the PUWU, Michael Adumatta Nyantakyi, said was "unbearable for a company that is struggling to break even."
The union said the BEFESA water purchase agreement was based on a 25-year build, own, operate and transfer arrangement for the Teshie-Nungua plant, financed through a parliament- approved loan.
It said the company was battling to break even in its operations, with dozens of corporate and individual consumers unable to pay for water consumed.
According to the PUWU the Volta regional office of the GWC has revealed that consumers in the region owed the GWC GH¢11.02 million, (US$ 2.75 million). And it said the Ashanti regional office had disconnected the water supply to Kwame Nkrumah University of Science and Technology and the Kumasi Polytechnic for failing to settle their debts to the water supplier.
The union has alleged that Ghana's Ministry of Water Resources, Works and Housing has mandated the GWC management to recoup arrears or have their salaries reduced by about 20%.
Nyantakyi said that while most of GWC's debts were withminstries, departments and agencies, much of them also resulted from "bad contracts," such as the BEFESA deal. He said no company could operate profitably under current arrangements and called for the cancellation or renegotiation of the contract terms.