A fact sheet on the five-year management
contract between Aqua Vitens Rand Limited (AVRL) and Ghana Water
Company Limited (GWCL) says it is not the policy of AVRL to
participate in privatization of water.
It said the two entities that own AVRL, Vitens from Holland and
Rand Water from South Africa, were both public sector entities and
would not be interested in privatization of Ghana’s water sector should
the government even decide on that.
“The AVRL contract is not a privatization and it is not AVRL
corporate or social policy to participate in privatization or undertake
financial in investments,” the fact sheet said.
“Should the government of Ghana, at any point decide to privatize
the water sector Vitens and Rand will withdraw their staff and services.”
In spite of what the contract said and the several efforts on the part
of AVRL to explain that the contract only mandated them to manage the
urban water system to restore the financial stability of the water sector
and to assist GWCL to increase access to piped water, several critics till
date continue to insist that AVRL’s involvement in the water sector
“AVRL is a not-for-profit partnership between two state-owned
water companies, Vitens and Rand - both Vitens and Rand consider
their involvement in Ghana to be part of their overall corporate and
social responsibility, to support development of the water sector in
Ghana,” the document said.
An independent consultant’s report on the nature of the contract and
performance of the AVRL so far indicated that, “the main element of
this contract is a private sector participation (PSP) Management
Contract and not a privatization of water”.
The independent consultant, Timothy John Kingman, in his 14-page
December 2008 report noted that AVRL was not making any financial
investments into the water sector and was therefore not involved in any
commercial activity like setting of water tariffs to recoup their
investments and make profit.
“The Public Utilities Regulatory Commission (PURC) still has the
roles of economic and environmental regulations – as regards economic
regulation the principal role of PURC is in the setting of tariffs,” the
In terms of the staff composition of AVRL, the fact sheet noted that,
there were only seven expatriate staff members from Vitens and Rand
working at AVRL, saying that the senior management team comprised
of both expatriates and local Ghanaian experts.
Additionally 2,840 staff members of AVRL were seconded from
The fact sheet noted that under the management contract the
expatriate staff drew their emoluments and other benefits for the
five-year period from some US$11 million taken from a US$103 million
World Bank grant to support the Urban Water Development
“World Bank gave the grant specifically because of the confidence it
has the ability of Vitens and Rand to restore some viability and
efficiency into the urban water management system based on their own
performance in their respective countries,” it said.
It said the expatriate staff did not benefit from the revenue generated
by AVRL in their operation, adding that it was only the local staff, most
of who were seconded from GWCL, who were paid from a base
operation fee taken from revenue generated from the operations of
Statistics on the performance of the urban water sector made
available to the GNA indicated a drastic increase in financial
performance between the pre- and post- AVRL period.
According to the statistics, net operating surplus (profits) at the end
of 2005 was GH¢1.9 million cedis but increased drastically to GH¢9.1 in
2006 after AVRL came onboard in June 2006. In 2007 it increased to
GH¢13.4 million cedis and last year it hit GH¢20 million cedis.
The fact sheet states that one of the major challenges of AVRL had
been to help anti-privatization organisations like Coalition of NGOs on
Water Sector (CONIWAS) to understand the development role of
Meanwhile, CONIWAS said recently that the involvement of AVRL
in the management of urban water constituted privatization and therefore
called on the new political administration to abrogate the AVRL contract
before it ended in November 2010.