Business News of 2014-04-11

‘BOST has not outsourced its operations’

The Managing Director of the Bulk Oil Storage and Transportation Company (BOST), Mr Kingsley Kwame Awuah-Darko, says reports that the company has outsourced its operations to a foreign firm are incorrect.

According to him, what has happened is that a company registered in Ghana, TSL Logistics Ghana Ltd, has been contracted to manage the risk of BOST on a 12-month pilot basis.

Speaking to the Daily Graphic, Mr Awuah-Darko explained that the move was to ensure that BOST concentrated on its core business of developing a network of storage tanks, pipelines and other bulk transportation infrastructure throughout the country and also manage the country’s strategic reserve stocks.

He explained that TSL Logistics was only a service provider and that BOST was still committed to its mandate.

According to Mr Awuah-Darko, the current debt stock of his outfit stood at $35 million with $24 million out of the debt attributed to losses at the depots, while $11 million was lost in transit, which is not acceptable.

“Therefore, our main focus now is to tackle where the bigger losses are coming from, which are the depots, and that is why we have contracted a partner with expertise to work with our staff, who constitute 99 per cent of employees at the depots,” he said.

The managing director also said the current situation where products were hauled across the country to the north would be eliminated since barges positioned at Akosombo would be transporting the products to the north via the Volta Lake.

“Handing over the risk management to the company engaged means BOST can now focus on stocking its strategic reserves so that in the event of any challenge, the country can comfortably fall on its reserve,” he stated.

He said over the years, product losses had become an unacceptable part of the company, and they had to be eliminated to enable BOST to focus on keeping the strategic stock for the country. That was why engaging TSL Logistics was crucial, he said and added, “If we are not able to deal with product losses, then BOST is no longer fit for the purpose for which it was established.”

Vibrant BOST

A vibrant BOST, Mr Awuah-Darko said, was very important to the country and every effort must be made to protect the company.

He said it was also important to note that the operations of BOST were different from those in the bulk distribution chain and that the revamping of his outfit should not be seen as a threat to their operations.

The sector ministry

The Daily Graphic also spoke to the Minster of Energy and Petroleum, Mr Emmanuel Armah Kofi Buah, who maintained that it was important to find ways to eliminate the colossal losses that were currently being recorded at the depots.

“These huge losses running have over the years been passed to the consumer, which was not acceptable,” he said.

Mr Buah drove home the fact that the move taken by BOST was going to save the country millions of cedis in revenue and be a relief to the consumer.

Establishment of pipelines

The minister said the government’s huge investment in the construction of a pipeline from Tema to Akosombo to ensure the transportation of products to the northern part of the country was not being used to the country's advantage.

"I can tell you that the losses at BOST have warranted the move to inject efficiency and the team at BOST must accept that," he said.

BOST's primary responsibility, he said, was to keep strategic stock that the country could fall on in emergencies. However, with the emergence of a company to handle the easy and efficient delivery of the products to the barges for onward transport to the north, BOST could now focus on building the strategic stock for the country, he said.

The barges

The ministry, Mr Buah said, had since directed BOST to hand over the operations of the barges to the Volta Lake Transport Company (VLTC), after its refurbishment. He also said BOST, which owns the barges, was discussing the use of the barges with the VLTC.