The Minister of Water Resources, Works and Housing, Alban Bagbin, has justified the non-renewal of the contract between the Ghana Water Company Limited (GWCL) and Aqua Vitens Rand Limited (AVRL), in the management of urban water, saying the overall performance of the company was not encouraging.
'In spite of the achievements claimed by AVRL, the review report concludes that not much was achieved in the early years of the management contract by the operator, but some progress was made in the third to fourth years, although the service standards were not fully met.'
Mr. Bagbin made the justification in Accra yesterday when he took his turn at the Meet-the-Press series organized by the Ministry of Information to offer a platform for appointees to articulate government policies and programmes.
AVRL came into the scene in November 2005 when it entered into a management contract with GWCL under the erstwhile New Patriotic Party (NPP) regime to handle 81 urban water systems in the country, and by June 6, 2006, it commenced operation.
Mr. Bagbin said as the date for the contract to end drew closer, public anxiety heightened and many civil society organizations, NGOs, media and others encouraged the government not to renew the AVRL contract so that the status quo would prevail.
He said, 'In the interest of industrial harmony, and ultimately the protection of the interests of the good people of Ghana, the government had to pay heed to these developments in the sector and take action.'
He said the government had considered 'the longer term and more holistic implications of all the other options available to us in the management of urban water sector' in not renewing the AVRL contract.
The minister said although AVRL made some strides in its management, the company was unable to meet the water quality service standard and delayed in customer account receivables, apart from the unimpressive targets for treatment plant operations.
He said in the interim, the government instituted what he called 'a dispassionate process of auditing AVRL's performance over the past five years' and also 'the nature of the terms and conditions of the management contract that tended to frustrate the partnership between the two.'
The minister said, as a result, the government made arrangements in the form of a 'Special Purpose Vehicle' (SPV) that would ensure the establishment of Ghana Urban Water Limited (GUWL), which he said was in the process of incorporation to manage the situation in the interim for 12 months.
He said during the 12-month period, GWCL would continue to play its role as an asset holder with the responsibility for asset expansion, while GUWL would assume the role of managing the water system in 81 urban areas, saying, 'We will be vigilant and play our respective oversight roles to make it happen.'
Mr. Bagbin said during the period, the government would take a comprehensive look at the entire water sector of the country, review legal and institutional arrangement to ensure effective urban water delivery.
By William Yaw Owusu
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