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Business News of Sunday, 13 April 2014

Source: myjoyonline.com

Board member of BOST rejects BDCs' consortium bid

A board member of the Bulk Oil Storage and Transportation Company Ltd (BOST), Kofi Adams, has dismissed the decision of Bulk Distribution Companies (BDCs) to form a consortium to manage BOST’s tank farms in Accra.

According to him, the consortium would rather disadvantage small companies government have been helping to grow.

He stated on Joy FM’s current affairs programme Newsfile on Saturday that, the managerial problems with the tank farms “can never be resolved by a consortium...a consortium of who and who?”

The Bulk Oil Storage and Transportation Company has outsourced the management of its petroleum storage facilities within the Accra Plains Depot to TSL Logistics Ghana Limited, a subsidiary of a Nigerian company.

Bulk Oil Distribution Companies are, however, against the arrangement, arguing that local companies have better capacity to manage it to the country’s economic advantage.

CEO of the Ghana Chamber of Bulk Oil Distributors, Senyo Hosi, insisted local companies have invested enough to be able to form a consortium to manage BOST’s facilities.

Their position gained the backing of Chairman of Parliament’s Select Committee on Mines and Energy, Dr. Kwabena Donkor.

But Mr. Adams suspects the consortium would be made up of largely big players coming together so that the small ones “we want to encourage to also grow will not be able to grow”.

He said the issue of outsourcing the facilities to a foreign firm is not new. He recalled that as far back as 2009, before the current board took over, the management was outsourced to Sahara, another Nigerian firm.

TSL is only going to play a gate-keeping role, Kofi Adams clarified, adding “we did not want any BDC to be responsible for playing a gate-keeping role, other than that the one that wins will disadvantage the other ones”.

He also denied claims by the BDCs that they were not consulted before the facilities were outsourced to TSL.

“There was serious consultation,” he maintained.

He explained that, as a result of the losses in the running of the tank farms, BOST owes BDCs to a tune of almost 35 million Ghana cedis.

“So what did BOST do? Let's pass on the risk of the losses to a management entity, let them play a watchman role, it is not like they are holding a BDC licence – the TSL is not a BDC,” he stressed.

“This arrangement is going to favour the BDC,” he indicated and assured “that the Ghc35 million they are chasing will no longer happen” because any loss would be paid for by TSL, he placed on record.

Kofi Adams also pointed out that the board did not seek cabinet approval because it was not necessary, indicating that it only needed a ministerial approval.

On the issue that TSL is not a licensed company, the board member said the company is registered in Ghana, but a “positive” response they got from the regulator, National Petroleum Authority, was obvious that TSL does not need a licence for its engagement with BOST.

The board will, however, meet over the ensuing concerns and issue an appropriate response, he promised.

The Minister of Trade and Industry, Haruna Iddrisu, shared his observation that he is personally aware of some BDCs who have over the years invested into bulk tank farms, suggesting their capability to manage the BOST facility.

Nonetheless, he said, the government is ready to review a petition by the BDCs. He assured that stakeholders - Minister of Energy, BOST board and management – would be summoned by the president to find out if among others, due process was followed and BOST got value for money.

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