Selling TOR is suicidal—Analyst
A management consultant and former MD of the Bulk Oil Storage Transportation (BOST) Company, Dr. Kwabena Donkor has criticized government's decision to privatize the Tema Oil Refinery (TOR), arguing among others that the decision is most suicidal.
Reacting to the announcement in an interview with the dailyEXPRESS, Dr. Donkor agreed with MP for Asikuma Odoben- Brakwa P. C. Apiah- Ofori that it will not be in the best interest of the country for the refinery to be privatized because the entire country depends on it.
'TOR is a monopolist and considering the fact that without TOR or petroleum products, the economy of Ghana would grind to a halt overnight, then until more refineries are established in Ghana to break the monopoly of TOR, it is not in the best interest of Ghana for the Government to cease to exercise control over TOR' said the MP.
Dr. Donkor further added that the refinery is currently not in a state to be sold or privatized and rather advocated it's revamping and expansion of plants, recapitalization and an increase in capacity.
He also rubbished the proposition to sell off 35% of shares on the stock market and give away another 35% to strategic investors. According to the former BOST MD, a company must be profitable before considering enlistment on the stock market, adding that the refinery currently produces a maximum of 45,000 barrels only per day.
This he said means TOR is confronted with a high overhead cost which makes it unprofitable and impossible to be listed on the Ghana Stock Exchange.
In announcing the decision to sell off the refinery, Finance Minister Kwadwo Baah Wiredu who was speaking after a trip to Korea said two South Korean companies S.K. Corporation and Samsung of Korea have already expressed interest in the company and would make follow-ups for discussions on the modalities to be adopted in respect of the transaction. S. K. Corporation is reported to be controlling nearly a third of South Korea's oil market and has a refining capacity of 1.115 million barrels per day.
Dr. Donkor however advocates the need for caution, saying it is possible for these oil giants to import already refined oil from their home countries to meet the demands of the country, thus, making our refinery a storage center.
This he said can affect the engineering base of TOR since many of the workers would not be needed because the work load would be reduced.
P. C. Appiah Ofori in his statement to the president, parliament and some ministers last week stated that if TOR ceases to be a state owned company, the government would not be able to easily impose taxes and levies on petroleum products. If that happened, government will lose steady sources of revenue and this will impair government's development and growth agenda for Ghana.
"The effect of this is that the people of Ghana would suffer unbearable hardships resulting, sometime, in strikes and this would make the Government unpopular and impair the chances of New Patriotic Party (NPP) to retain power" the statement added.
The statement also said Ghana has not benefited from the privatization of Ghana Telecom and some other similar state owned enterprises as the new owners of some of such privatized enterprises engaged in capital flight to the detriment of the national economy.