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23.08.2004 Business & Finance

GWCL - Aquamet Affair Turns Sour

By Public Agenda

Ghana Water Company Limited (GWCL) and Aquamet Metering Services Limited, the company which won the contract to pilot pre-paid water meters in Ghana, as part of Ghana's Private Sector Participation in water, are locked in a bitter legal wrangle over aspects of their relationship, following attempts by GWCL to abrogate the 5-year contract three years into its implementation, without recourse to the provisions in the contract.

Aquamet, a Lebanese owned company, registered in Ghana, won the contract to collect revenue on behalf of the GWCL, through an open bidding process, which is said to have been poorly publicized. The financial arrangement between the two companies, which had remained a closely guarded secret, required Aquamet to pre-finance the installation of the meters and recover its costs from its percentage revenue retention over the period of the initial contract term. Under the arrangement, Aquamet was to pay 77% of total revenue collected to GWCL, and retain the rest, to offset its operational and other costs.

Disaffection with the contract had been widespread within GWCL. According to insiders the management was divided over the manner of the contract award, as well as the terms and manner of its implementation. The Tema Regional office of GWCL, which has jurisdiction over the pilot project area, was, according to Week-end Agenda sources, kept in the dark about the whole contract, from the drafting through the award, to the implementation stage. Even at the Head Office, where the project was designed, only a select few were in the known about the goings-on.

Meanwhile, some consumers in the project area, as reported in the May 14 - 20 2004 edition of the Week-end Agenda, were unhappy with the services they were being provided with under the arrangement.

Having expressed concerns about an apparent lack of transparency and proper accountability on the part of Aquamet, and seen no attempt to address them, GWCL went to court sometime in June to seek an interim injunction, restraining Aquamet from the exercise of its right granted it under the project contract to collect revenue on behalf of GWCL. This was granted, following which GWCL, quickly moved in to replaced all the pre-paid water meters in the project area with conventional meters. According to GWCL management, the action was necessary to forestall further loss of revenue to the company.

Meanwhile, Aquamet is unenthused about the pre-mature abrogation of its contract, and is seeking to set aside the earlier injunction granted GWCL. It looks like it's going to be a long drawn legal tussle. The next court hearing has been set for mid October. Week-end Agenda shall be there to bring readers reports on the proceeding.

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