Transitional Arrangement for Management of Ghana’s Urban Water Favoured after End of Current Contract

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Ama Kudom-Agyemang
13th May, 2011

GHANA, In less than 60 days from today, technically on the 6th of June 2011, the current management contract for the delivery of urban water in Ghana will expire. In November 2005, the government of Ghana initiated a five year “Management Contract,” between the Ghana Water Company Limited (GWCL) and the Dutch South Africa establishment “Aqua Vitens Rand Limited” (AVRL) for the delivery of urban water under a Public Private Partnership (PPP) deal. The contract came into force on 6th June, 2006. This was the option selected by the government following recommendations by a consultant in 1994 of various restructuring options for urban water delivery in the country.

Normally, by now a system should have been identified to take over the helm of affairs once the contract ends. Unfortunately, this has not been the case and the country is seemingly caught in a state of un-preparedness as the expiry date draws closer. This was evident at the recent stakeholders’ forum in Accra on Urban Water Delivery, during which several options for interim management such as an extension of AVRL’s contract for a period of 12 to18 months were proposed. The other proposal was for an interim management team to be formed to manager affairs until a permanent management system was put in place.

The proposal to extend AVRL’s contract did not go down well with majority of the participants at the forum, who were expecting a decisive position on the issue on the part of the government –“not to extend or renew AVRL’s contract.” The contention was that “nothing has changed as far as the country’s urban water delivery situation is concerned.” However, the moderator for the forum, John Nkoom reminded the participants that the purpose of the forum “is not for a decision to be made on the issue nor is it to make a decision for the government, but it is to debate on what next steps to take and to make appropriate recommendations.”

The issue is still being hotly debated as individuals and organisations including the Coalition of NGOs in Water and Sanitation (CONIWAS) continue to urge the government not to retain AVRL. At a recent press briefing in Accra, the Executive Secretary of CONIWAS, Benjamin Arthur said after five years of operation, AVRL had failed to meet targets including improving water quality and reduction in revenue water. Therefore, government should not extend its contract.

The General Secretary for the Public Utilities Workers Union (PUWU) of the Trades Union Congress (TUC), Jerry Addo described the contract as having “failed to meet the expectation of the consuming public.” In an interview I asked him to mention some of the expectations he was referring to. Mr. Addo explained that “the things that drove the contract included reduction in non-revenue water, efficient use of materials, and effective management of the distribution system to make water accessible to all consumers.” He added, “The bottom-line was availability, affordability and accessibility of water to consumers, but these things have not been met and all of AVRL’s activities hinged on these three elements.”

Mr. Addo said AVRL’s introduced attempts made to boost distribution were based on development programmes of the GWCL. “Yet most areas still do not have water,” he added. According to the PUWU Secretary General, all the examples of improved urban water delivery such as in Koforidua, Tamale and Kumasi, citied by AVRL “are actually the results of GWCL’s development programmes and not that of the activities of AVRL.”

During a health walk in Accra, Ghana as part of activities marking World Water Day 2011, some members of the Public Utilities Workers Union of the Trades Union Congress wore red bans in protest against any extension of the contract of Aqua Vitans Rand Ltd

On what he thought about the proposal to retain AVRL after the expiry of its contract, Mr. Addo said “it is one that all the workers are against and therefore any transitional arrangements that features AVRL after the end of the contract, will have to consider the workers position and a possible industrial unrest.”

What kind of management system was he envisaging for urban water delivery eventually? “GWCL should be put in charge of urban water delivery, but operate within the current structure, which is strategically the best for continuous donor support,” Mr. Addo said.

His sentiments were shared by the Acting Managing Director of the GWCL, Kwaku Botwe. He stated in an interview, “I would prefer to operate on the same structure where operational activities are based in the regions and districts, and the head office is a small unit with supervisory responsibilities.” He was of the view that given the same opportunity and logistical support that AVRL had, GWCL will perform. “I am asking that we should be given the chance to sign a management contract and we will work.”
Mr. Addo however added that “this requires staff to critically examine themselves, re-orient their mindset with some managerial skills and adopt a posture of boldness, commitment and responsibility.”

The Communications Manager of AVRL, Stanley Martey could not predict an extension would be granted the company to handle the transitional period after the end of the contract on the 6th of June, 2011. He however maintained that AVRL had performed creditably under the circumstances, “where the contract did not set out any baselines for measurements.” He therefore wondered the basis for which the company’s work has been judged as a failure. Mr. Martey enumerated AVRL’s success stories as including improved water quality at some major treatment plants, reduced illegal connections that translates to a reduction in non-revenue water, and reduced commercial losses.”

In an interview, a Development Partners (DP) source said, “the contract was a failure.” He attributed the said failure to shortcomings in the Memorandum of Understanding (MOU) signed between the GWCL and AVRL. According to the source, AVRL failed to provide the right calibre of managerial personnel as it indicated in its bid. He said “those who were eventually brought to manage the operations did not have a grasp on the issues on the ground and this was overlooked by the GWCL.” He added that GWCL also failed to put in place institutional arrangements to monitor the performance of AVRL.

The source agreed to the putting in place of a transitional arrangement to manage urban water delivery after June 6th, 2011 and hinted that a consultant supported by the World Bank has developed an interim arrangement for the sector’s management. The details will be made known by the Minister of Water Resources, Works and Housing.

The source said the interim arrangement will provide the basis for the sector Ministry to take “a more comprehensive look at how the entire system should be managed.” He cautioned that any future Public Private Partnership (PPP) arrangement for water delivery in the country should also focus on institutional governance and capacity to monitor. He stressed that “any weaknesses on any side of the contract, will affect the entire performance and the set targets will not be achieved.”

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