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20.09.2004 General News

Attempts to dribble Ghanaians into accepting water privatisation

By Weekend Agenda

Enimil Ashong, the Communications Consultant to the Water Sector Restructuring Secretariat, the outfit set up and funded by the World Bank, within the Ministry of Works and Housing, to propagate the Bank's water privatization ideology in Ghana, has said, government has now realized that the earlier proposed lease arrangement for the water sector is flawed, which he pointed out, is the reason the government is now going after management contract.

He however did not say how and when the government came to that realization; neither did he provide any indication as to the basis for assuming that management contract would provide the answers to the challenges facing Ghana's beleaguered water sector. Reacting to a Weekend Agenda story on a recent World Bank loan approval for Ghana's water privatization programme, on Choice FM's Streetproof, on Friday afternoon, Ashong conceded that under the lease proposal, the operators were indeed not going bring in their own funds for investment.

That responsibility, he said, rested with the Government of Ghana. The confession, which has raised eyebrows, vindicates the position of civil society groups who sounded the alarm bells when the government under the instigation of the World Bank, decided to fast track the privatization process. Ashong argued that, the now proposed management contract is a better option, because the choice has been informed by flaws identified in the earlier proposal.

Public Agenda's investigations into aspects of Ashong's statement have revealed a senile plot to deceive Ghanaians into accepting water privatization. There is a lot more shrouded in secrecy than Ghanaians maybe aware.

First, Ashong's own job was borne out of the World Bank's thinking that, far from whatever flaws identified in the earlier lease proposal, the failure to push through the programme was more of public relations ineptitude on the part of Kwamena Longdon and Victor Ansah who handled that aspect of the programme at the onset. Ashong, selected directly by the World Bank, therefore has an onerous job, to make Ghanaians accept that privatization is the best that can happen to their water.

Again, what Ghanaians are not being told, is the fact that, the World Bank's Project Information Document (PID), Appraisal Stage, Report No.: AB423, prepared on April 21 2004, and expected to receive the Board's approval on September 23 2004, envisages the management contract rolling eventually into a lease agreement, after the initial five year contract period. The document also includes the following information about the privatization plan:

¨ $6.5 million of loans contracted, will go directly to pay the private sector company that wins the bid. $2.5 million will go to technical assistance largely contracted to foreign private consultant firms.

¨ $11 million will go toward the severance payment program that will be needed to serve the thousands of Ghana Water Company employees who will lose their jobs. ¨ Water tariffs (rates) will be increased 20% in real USD terms, first time in 2005 and secondly in 2013.

*Automatic quarterly water tariff adjustments will be made to cover fluctuations in the cedi-to-dollar exchange rate. This is to cover outstanding debts that must be paid back in dollars.

*Water tariff increases of approximately 30% to 40% will be necessary to service loan project debts.

The Government of Ghana, in addition, is obliged under the terms of the contract, to continue subsidizing a portion of GWCL's electricity bill during the term of the management contract.

Plans are already, far advanced to manipulate the workers, and get them to accept the retrenchment deal. Information picked up during our investigations indicate that the technical and managerial staff of Ghana Water Company, have been promised handsome remuneration, close to that of AngloGold Ashanti, if they supported the management contract proposal. Meanwhile, anxiety is rife among the junior workers, diminishing in the process, their morale.

The workers, 1,600 of who are to be laid off when the project takes off, with 400 more to follow over time, are worried because they have so far been kept in the dark about their fate: when they are going home, who exactly is going, and what they are going with. This has created a stifling atmosphere, with many fearing to comment on the merits or demerits of the policy.

Arguments gaining currency among the citizenry as the privatization saga unfolds, is that, given a performance contract, and the resources, the Ghanaian technical and managerial staff, who Enimil Ashong concedes can be counted among the best in the world, could turn the fortunes of the company around.

"If Ghanaians are managing a more complex and a world class for that matter, an endeavour, such as Volta River Authority, why can't they handle Ghana water?" queried Taura, a member of the Sukura Local Action Committee of the National Coalition Against Privatisation of Water.

"If the foreign management firms are any better, let them come and work under the same conditions of service as their Ghanaian counterparts, so we can compare their outputs," challenged an irate engineer of GWCL who for obvious reasons wants to remain anonymous.

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