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22.09.2004 Business & Finance

Govt to sign agreement with World Bank

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Accra, Sept. 22, GNA - Tariff determination would still be the exclusive responsibility of the Public Utility Regulatory Commission when the Public Private Partnership project of urban water supply begins this year.

The project is not outright privatisation of water as critics are seeing it and kicking against its take-off.

Mr Enimil Ashon, Communication Specialist at the Urban Water Project Management Unit said the project has more advantages than disadvantages.

To this extent, the government of Ghana and the World Bank (WB) would sign an agreement in October, this year to enable Ghana to access a 103 million- dollar loan from the WB for work to begin on the Urban Water Project.

The loan is payable over a 40-year period with at less than one per cent interest.

He said the private sector operator in the supply system would take their remuneration from the project fund and be paid a fixed fee at the end of every month.

The project is expected to take off before the end of the year and it would assist Ghana Water Company Limited (GWCL) in the effective management of its urban water systems, rehabilitate existing water treatment and transmission facilities and expand distribution network in urban areas.

It involves 120 million dollars with International Development Association offering the 103 million dollars, a parallel funding of five million dollars from the Nordic Development Fund, while Ghana is also providing counterpart funding of 12 million dollars.

Mr Ashon was explaining to the Ghana News Agency in Accra the objective of the project and its intended benefits to seven out of the ten regions.

He said the explanation of members of the National Coalition Against Privatisation and TUC, who were kicking against "privatisation of water", was not correct because private sector teaming up with government in partnership to improve the water delivery system could not be termed absolute privatisation.

He said government was not selling the assets of the Ghana Water Company but was only permitting the private sector to operate the water system owned by the people of Ghana, in a more customer friendly manner.

He said 91.8 million dollars out of 120 million dollars would be spent on civil works with the project to be undertaken in phases lasting for a period of five years.

He said the first phase involving 15 million dollars out of 120 million dollars was expected to start before the beginning of next year under which replacements and extensions would enable pipe-borne water to reach 250,000 more people and to connect water to 25,000 additional houses.

About 350 stand-pipes would be provided in areas without house connections and, "Ghanaians will begin to experience the benefits of uninterrupted and regular flow of water by the end of 2005", Mr Ashon said.

He said as much as 92 million dollars or 74 per cent of the 120 million dollars would be used to replace the broken down pipe-lines and expand the network to make water available to all in the earmarked areas.

Mr Ashon said the project was the phase three and the final of the country's water sector structuring programme.

The GWCL has incurred a debt of over 300 million dollars over the years and it is expected to pay four billion cedis a month to ECG for electricity supply and other chemical suppliers an amount, which the company cannot afford and this makes GWCL inefficient in its management. He said most pipelines were laid in 1928 and had not been replaced, which was causing the interrupted water supply to certain urban areas.