AVRL not interested in a privatized water sector

Aqua Vitens Rand Ltd (AVRL) say they are not interested in bidding for a privatized Ghana Water Company Ltd (GWCL). They say they are not even interested in operating a leased facility from the government of Ghana.

They would however not reject an offer of an extended contract when their current management contract with GWCL expires in 2011 or be pleased to work with the water sector in areas of consultancy.

Andrew Barber, Managing Director of AVRL who made this known to the media during a day’s sensitization tour for a section of the media explained that both of the parent companies of AVRL, Vitens of Holland and Rand of South Africa are public sector organizations which are non-profit entities.

This status, according to him, precludes them from participating in a privatized entity which has as the motive of profit in the background.

Mr Barber informed the media that the Dutch embassy recently passed a vote of confidence in the operations of AVRLA by topping up their operational fund with a $6 million.

“This is clearly a vote of confidence in AVRL for the level of efficiency we have brought into the management of the urban water sector in Ghana,” he said.
AVRL was awarded a five-year World Bank-funded contract in November 2005 as operator of the urban water sector, with GWCL as the grantor.

At the beginning of the contract which was at the instance of the World Bank which gave a grant of $103 million for water sector improvement, AVRL got $5 million from the grant.

Under the contract, AVRL was mandated to make the urban water sector financially viable by improving water distribution and revenue collection, cutting down on non-revenue water, reducing chemical usage and cost and reducing energy consumption and cost.

According to the MD, AVRL, in the course of the first three years, made some non-contractual expenses, particularly on customer-based activities, partly owing to which the company’s administrative allocation was heavily burdened, warranting the intervention of the Dutch government.
According to him, AVRL made those decisions because it wanted to shift the focus of water delivery from an engineering-centred approach which used to be the case under GWCL, to a Customer-centred one.

“From this investment, a new Customer-Care –Centre and a Geographic Information System (GIS) have been established”, said Mr. Barber, adding that about 4,000 school children have also benefited from educational programmes organized by AVRL.

However, in a sharp reaction, Alhassan Adams of the Coalition Against the Privatisation of Water (CAPW) said although the two mother companies of AVRL are public sector operators, they formed AVRL as an international profit making orgnisation to bid for profitable ventures across the globe.

“They bided with private sector operators for the Ghanaian contract and won it, so they should stop throwing dust into people’s eyes”, he said, questioning what they were doing in Ghana if they are not a private sector operator.

AVRL came into Ghana after successfully wining the World Bank sponsored contract to operate facilities of GWCL on non-profit basis.
GWCL which is tagged the Grantor in the contract controls the contract sum of US$103 million grant from the World Bank, US$12 million counter-funding from the government of Ghana and five million dollars from the Nordic Development Fund (NDF), which went directly to AVRL for minor repairs, replacements and rehabilitation (RRR) works over the five years.

The current management contract between AVRL and GWCL has had its mid-term review carried out a couple of weeks ago with government expected to come out with its comments on it soon.

This mid-term review, according to General Manager in Charge of Communication at AVRL, Kwaku Sakyi Addo is a World Bank requirement, and would be done, no matter the party in power. This, Andrew Barber explains is about improvement in urban water delivery, and not on the contract per se.
By: Justice Lee Adoboe