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General News of Thursday, 9 May 2013

Source: New Crusading Guide

GWCL abandons water treatment chemicals at port again

Evidence collected so far by the New Crusading Guide with regards to the issue of procurement of water treatment chemicals for the Ghana Water Company paints the picture of a well organized ring, hatching schemes aimed at weakening an entity whose recent entry into the sector ensured the total collapse of the activities of the clique that for many years succeeded in monopolizing and hijacking the water chemicals market at the expense of the state.

With a philosophy of ‘you either belong or you are booted out’, the clique with the blessing of top officials of the Ghana Urban Water Company Limited ensured their dominance in the water chemical market which led to the continuous control and artificial inflation of prices of the product.

This situation, however, injured the finances of GUWL, suppressed competition, prevented entry and expansion by rivals, imposed supercompetitive prices and also stifled innovation in the sector.

Readers would recall that the Collins Dauda committee instituted to probe the expired chemical scandal that recently rocked GUWL and the circumstances that led to the delay of the chemicals at the ports established that the supplier (Santa Baron Ventures) handed the original documents needed for the clearing of the chemicals to the procurement officer of GWCL, who agreed to receive the document but did not open it until a week when the logistics officer returned from leave.

The report also indicated that the logistics officer after taking the unopened folder to his office, returned to inform his boss that the documents were photocopies, and so could not be used to clear the chemicals, causing the delay in clearing the chemicals until January 2013, when the label on them indicated that they had expired.

This paper can categorically report that, in a similar attempt to sabotage Santa Baron Ventures (a competitor), again at the expense of the state, officials of GUWL have plainly refused to open a new letter of credit for some 4000 tonnes of alum sitting in Romania - a condition that was boldly stipulated in an agreement entered into by Santa Baron and the water company.

Sources at GUWL whispered to this reporter under strict conditions of anonymity that all efforts by the manufactures of the chemicals to convince management of the water company to prepare an L/C for the 4000 tonnes of alum has fallen on deaf ears as management saddles the company with additional costs accumulated from purchases of chemicals from its treasured sources.

The effect of such deliberate delay tactics is not only directed at hurting Santa Baron, but it also ends up helping to line the pockets of cronies of some GUWL bosses who are made to supply chemicals to the company, as a stop gap measures in the wake of the artificial shortages created by these state officials.

For instance when the 12,000 metric tonnes of alum was abandoned by GUWL at the ports to expire, management quickly used that opportunity to buy the bulk instead of the bagged and palletized chemicals at a relatively higher price from their buddies who have over the years remained sacrosanct allies of the company.

Although the mother company, GWCL has on countless occasions had cause to question some contractual breaches, like supply of underweight chemicals among others on the part of the so called untouchable company (name withheld), it continues to enjoy some preferential treatment from management with regards to the allocation of contracts.

It has been established that instead of the required yearly 12,000 tonnes of chemicals needed by GUWL, the company ends up purchasing from 16,000 to 18,000 tonnes because of these carefully engineered artificial delays.

This paper’s checks have also revealed that about 4000 tonnes of alum is currently stuck at the ports, attracting huge demurrage charges because GUWL officials ostensibly bent on discrediting Santa Baron, the supplier and ruining its chances of securing any contract from the State entity has scandalously refused to clear the chemicals for use.

Already an accrued expense of over $ 20,000 has been incurred by the company as demurrage.

This paper anticipates a recurrence of the issue that earlier led to the supposed expiration of the alum that stirred some controversy in the sector and the subsequent payment of GH¢166,386.36 (¢1.66.386.36 billion old cedi) as demurrage.

With the opening of the tender for the 2014 supply of chemicals, it is clear that in the course of another round of competition, interested suppliers would jockey for positioning, with the usual price war taking a better part of the contest.

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