- Salutations
- Ministers of State Present
- The Chairman and Members of the Board of Directors of BOST
- The Managing Director and Members of the BOST Management Team
- Distinguished invited guests
- Ladies and gentlemen
ALL PROTOCOLS OBSERVED
I bring you warm greetings from the President, His Excellency Nana Addo Dankwa Akufo-Addo.
It gives me great pleasure to be present at such a momentous occasion in the history of the Bulk Oil Storage and Transportation Company Limited, BOST. I must say, and it deserves to be said loudly, that BOST is now a shining example of an effectively run State-Owned Enterprise.
I am well aware of the history of BOST following its establishment in 1993, when it operated mainly 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).
Unfortunately, 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.
These include the strategic stock levy, which was zeroed out in the petroleum price build-up in 2006, resulting in BOST’s inability to meet the mandated requirement of holding six weeks of strategic stocks on behalf of the country.
Additionally, the BOST margin, intended for developing, operating and maintaining the company’s storage and transmission infrastructure, remained at 3 Ghana Pesewas from 2011 until 2019, when it was increased to 6 Ghana Pesewas. 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.
I have been informed that, as at 2017, BOST was saddled with trade liabilities of USD 624 million, legacy loans of GHS 284 million, BDC claims of USD 37million, CAPEX liability of USD 109 million and GRA tax liability of GHS 47 million.
Additionally, 30% percent of BOST tanks had been decommissioned, with 3 out of the company’s 6 depots non- operational; 4 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.
To complete the picture of chaos and decrepitude, BOST accounts had been unaudited for 3 years, making it very difficult to determine the company’s financial position. Turnaround after implementing several measures to prevent BOST from entering insolvency, the Board, under the chairmanship of Ekow Hackman, approved a 5-Year Turnaround Strategy from 2020 to 2024 prepared by the Management led by the Managing Director Edwin Provencal.
This strategy, which focused on “Enhancing Operational Excellence” and “Aggressively Growing the Business” sought to make the company profitable, ensure the development and effective implementation of policies, fully utilize all assets and automate the company’s processes, and, most importantly, be the beacon of corporate governance in the country.
I am delighted to state that between 2017 and now, 13 out of the 15 defective tanks have been repaired, all 4 river barges have been fixed, all pipelines which were out of service have been repaired whilst obsolete pumps, meters, and loading arms have been 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. The turnaround of the business is significant, and this is demonstrated by the improved operational efficiency.
From a debt position of USD624 Million owed to suppliers and related parties, BOST paid USD611 Million with Internally Generated Funds (IGF) comprising about USD 423 Million.
I was heartened when I heard that an internal Committee of BOST vetted the claims of eight (8) Bulk Distribution Companies, BDCs for Products stored with BOST and lost from the period of 2009 to 2014 amounting to Thirty-Seven Million United States Dollars ($37 Million) and succeeded in reducing this figure to 11 million dollars resulting in a saving of USD 26 million. This is worthy of emulation.
CONGRATULATIONS!!!
I was delighted when I was informed that for the first time in eleven years, BOST made a profit of GHS 163 million in 2021. It is evident that the turnaround of BOST has taken root. I would like to congratulate the Board, Management and staff for ensuring their stewardship and prudent Management of resources 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 GHs163 million profit. That will be GHS16 billion cedis.
Today marks a significant milestone in the thirty-year history of the Bulk Oil Storage and Transportation Company Limited (BOST); having transitioned from Diamond House, through Heritage Towers, to Roman Ridge, Airport Residential, and Dzorwulu. Finally, the company has found its permanent location. The Head Office Project. This building, which we see here today, was conceived in 2014 as part of plans to ensure that BOST staff work in a conducive environment. On 15th June, 2015, BOST engaged the services of Rolider Limited to design, build, and finance the construction of a new Head office building – 7-storey twin blocks at a total cost of Thirty-Nine Million United States Dollars ($39m) exclusive of VAT and all other taxes. The building was to be completed in 24 months. This project, which has transitioned from the previous Government to this Government, has been bedevilled with many challenges. Between 2016 and 2022, the project underwent a Value for Money Audit, an EOCO audit, a revaluation by an independent valuer, PPA ratification, and variation for the updated scope.
I am satisfied that after this extensive period, the project represents a wise investment for the company and our country.
Gold for Oil Initiative
In line with Government’s agenda to keep the nation moving and making fuel affordable, Government is making every effort to make sure BOST is given the requisite resources to hold adequate stocks of fuel products to meet its mandate. BOST is working closely with the NPA, Bank of Ghana and PMMC under my leadership to execute the Gold for Oil policy.
Under this program, Government seeks to purchase gold locally in cedis and use this gold to procure oil products, thereby reducing the demand on the domestic pool of foreign exchange for such transactions. This novel program will reduce our need for forex by about USD 4.8 billion annually and result in significant savings on the price at the pump.
I am told that as of 3rd March, 2023 the first four cargoes of 82,000 metric tons of diesel and 65,000 metric tons of petrol had resulted in a Ghc9.69 and Ghc4.19 savings, respectively, fuel prices at the pump as compared to November 2022 pump prices.
Comparing to 1st February prices, savings are Ghc2.2 and Ghc2.05 respectively for diesel and petrol. These are HUGE savings!
Alleviating the suffering of our people is of utmost importance to Government, and Ghanaians should look forward to more of these innovations as we bring the economy back to life.
Conclusion
In conclusion, I wish to also congratulate the Board and Management of BOST for the sterling performance of the company. I believe that with the same passion and commitment, the company can achieve more success and grow its revenue.
They have clearly demonstrated that with the requisite leadership and commitment, public enterprises can be a significant source of revenue for Government. As a shareholder, Government expects SOEs to make a profit and pay dividends to Government to support flagship programs. In line with this, the Ministry of Public Enterprises, together with the State Interests and Governance Authority, will ensure that all SOEs fulfil their mandates and support Government to improve the lives of our citizens.
With dedication, commitment and the right focus, we will deliver the mandate that Ghanaians have entrusted into our care.
I thank you for your time and attention. May God continue to bless our homeland Ghana.
