A mood of excitement has gripped the management and staff of Bulk Oil Storage and Transportation (BOST) as regards the implementation of a strategic plan that is reviving the operations of the state-owned firm.
The strategic plan which is expected to increase the fortunes of BOST on the financial market in the coming weeks will transform it from a loss-making low capitalisation company to a profit-making performance based professional organization.
Over the years, BOST has been in the news for the wrong reasons as a result of misunderstanding between staff and management and past MDs leading to some resignations.
Edwin Provencal, the new Managing Director of BOST who has been on the hot seat for barely three months is working to turn things around with the implementation of this strategic plan.
One of these plans is to be fair, firm and transparent in his engagement and management operations with his team. He believes that teamwork will do the magic for the growth of BOST.
As part of the strategy, the MD with his management team and staff are working to put all its four badges in operation to facilitate transportation of petroleum products from the south to the northern part of the country through the Volta Lake Transport system. The long term strategy is that BOST is working to earn a revenue of about US$ 810million in five years from an expected investment of US$180 million.
The state enterprise has asked government for a financial support of US$150 million out of which US$ 65 million would be used for infrastructural development, thus fix broken down facilities, over-aged pipelines among others and about US$75 million to engage in fuel trading. Such capital injection is expected to generate a targeted revenue of US$ 810 million.
Meanwhile, management is in talks with other strategic investors to secure funds to aid in operations. The plan is to widen the scope of operation and position BOST as the leading transporter and bulk operator of Petroleum products in Ghana and the sub-region.
Currently, 2 out the 4 badges that were broken down for over four years have been repaired under the direct supervision of Oscar Provencal, the MD. These two badges are transporting over 780,000 litres of fuel each to depots across the country.
The other 2 badges are under repair works and are expected to be completed by the end of this month. Currently, BOST has insured all its depots and as a result of losses, if recorded would be paid by the insurers TSL is the firm that manages BOST depots. Since this structures were put in place, BOST has not recorded any losses and there hasn’t been any incident of theft. With the level of progress made, the state enterprise is in talks with its insurers to renegotiate the insurance premium downs to save some revenue.
On 28th October 2019, BOST signed a progressive contract with The Volta Lake Transport Company Limited (VLTS) to start shipping products through the badges from the Akosombo depot to Buipe. The remarkable progress made within this short period has increased the value and fortunes of BOST within the investor community. The effort is yielding results and has started attracting investment inquiries. It's quiet disheartening that BOST has for many years not paid dividend to its shareholders that’s government but things are turning around. These measures outlined and being implemented by the MD, Edwin Provencal, with his team is bringing back hope and BOST is planning to pay dividend within two years.
THE CALM AT BOST, WHAT’S DOING THE MAGIC
Our new boss, Edwin Provencal is a leader who is motivating staff and management to work harder. His administration has been very transparent and I can tell you that management is rallying support for him. This act of transparency, accountability and fairness exhibited by the MD has brought unity among us at the workplace and thus everybody is playing a key role to increase productivity. Edwin Provencal has brought a breadth of fresh air and established a good transparent relationship with the union. He has made a lot of commitment and we are all supporting his agenda for growth. A statement from the management team indicates
REQUEST TO INCREASE BOST MARGIN
The management of BOST t is requesting Parliament to review the BOST t margin and adjust it upward from 3 pesewas to 6 pesewas to help make it strong and efficient. There is another school of thought that the margin should be pegged in a percentage rate to keep it firm against inflationary trends the margin which was approved in 2011 has seen its value diminished to 1 pesewa as a result of inflation. In this regard Ghanaians are indirectly paying high fuel prices due to instability in storage and distribution rates. The low margin rates is also preventing BOST from purchasing and storing fuel at full capacity to stabilize the price, a situation that is causing price increment locally whilst prices are dropping on the international oil market. An increase in the margin will resource BOST adequately to implement its zonalisation programme.
BOST ZONALISATION PROGRAM
As part of the zonalisation program, tank farms are expected to be established in regions with pipelines through which fuel products will be transported directly from the storage facilities to other networked facilities within the country.
Zonalization limits tanker trucks from travelling long distances to offload fuel. The constant use of Ghanaian roads by these tanker or fuel trucks put stress on the roads, they cause accidents unnecessarily and thus create carnage on our roads. Aside this, zonalisation will help in fuel cost reduction, cost saving, minimizes accidents and carnages on our roads. BOST is therefore urging tanker owners to engage in this partnership drive and invest in the facility and pipeline construction for long term profit. Operational success of BOST will sustain the activities of the tanker owners and their drivers.
With the increase in the BOST margin and BOST plans to position itself as an off taker, that’s purchased fuel products directly from oil refineries around the world for storage and distribution. The huge volumes are likely to help reduce the price of fuel since there would be enough to store and supply for a long time. This will promote price stability and reduction. The purpose of the BOST margin is to build and maintain infrastructure.
BOST is thus positioned to be an off taker to lower the burden on the citizenry who have many years relied on high cost of imported fuel from BDC’s. Automation and upgrade of depots is one of the strategies being considered by BOST to promote monitoring and supervision.
BOST is aiming at lifting close to 35 cargoes between now and end of 2020 as part of the efficiency drive. In 2019, BOST lifted only 4 cargoes compared to 36 cargoes lifted in 2016. This explains the operational and financial difficulties that BOST finds itself today.