The Managing Director (MD) of Bulk Oil Storage and Transportation (BOST), now Bulk Energy Storage and Transportation, Edwin Provencal, has refuted assertions that the company was recording losses.
According to him, the fact, as contained in the audited financial reports of the company, exposes the misinformation in the claim by the former President, John Dramani Mahama.
Mr. Mahama had made the claim that BOST was making profits under his tenure, but that was not the situation today.
In an interview with The Chronicle this week, the MD said the former President misinformed the public. He noted that Mr. Mahama did not base his claim on an audited report, but rather on a management report the company submitted to the Ministry of Finance for purposes of preparing the budget.
He remarked that conversional wisdom would get individuals to believe the audited financial report of a company instead of the management report, especially as the latter was submitted in October, three months to the end the year.
“That’s why you need independent auditors to come into an organisation to audit the company after the year has ended,” he remarked.
He explained that they send reports to the Ministry of Finance in October every year for budget preparation, and that could not be the end-of-year report, thus the need to rely on the Auditor’s report to assess the performance.
He indicated that the truth of the performance of a company was known when its books were audited, but management accounts may not be considered entirely true.
LOSSES UNDER MAHAMA
A cursory look at the audited financial report of BOST reveals a difficult financial trajectory. In 2013, BOST reported losses of GH¢30.91 million; in 2014, the loss was GH¢89.37 million (revised: GH¢68.01 million); in 2015, GH¢36.34 million; and in 2016, GH¢458.64 million.
Mr. Provencal mentioned that Pricewaterhouse, an accounting firm, audited the accounts of BOST for 2015 and 2016 in 2017 and found that the company made huge losses.
GAINS UNDER AKUFO-ADDO
However, he added that under the administration of Akufo-Addo, BOST saw some transformation and began to make profit from 2021 until date.
“So, in terms of performance, apart from 2012, when we (BOST) made some profit between GH¢11 million and GH¢13 million, we made losses all along until 2021, when we made a profit of GH¢161 million, and in 2022, we more than doubled it to GH¢342 million,” he said, describing it as “tremendous performance.”
TURN AROUND
The MD, who was recently adjudged the Energy Personality of the Year at the 7th Ghana Energy Awards, Mr. Provencal, chronicled what had been done to turn around the fortunes of BOST.
According to him, through prudent management, all their badges and pipelines are working, and 12 out of their 15 defective tanks have been repaired.
“So, a lot of these repair works—the operational efficiency bit—is what has helped us bring the company back to life. No bank wanted to do business with us. Today, the banks are queuing to do business with us. Because we have used the same staff, we have run the company like a proper business. If you are state-owned, you have the state behind you, so you should not be making losses.”
He indicated that pipelines procured under former President Kufuor were abandoned in Houston throughout the eight years of the NDC, but the Akufo-Addo government had brought them and was in the process of installing them.
ARREARS
He told this reporter that BOST, under the Akufo-Addo administration, has paid off all its trade liabilities, amounting to US$624 million. The government, he said, paid 30%, and BOST, with internally generated funds, dealt with the rest. With respect to its local debt of US$416 million, they have paid everything, as well as a huge portion of the debt to Bulk Distribution Companies (BDCs).
The MD stated that an internal forensic audit conducted into the US$37 million claims by BDCs resulted in a significant slash.
“When we finished that job, the US$37 million BDC claims had reduced to US$11 million. But the US$37 million BDC claims, the same BDCs had signed off that it is no more US$37 million, but its US$7 million. We saved this country a whopping US$26 million, which would have gone into people’s pockets for no work done,” he noted. Out of the amount, he indicated that 98% had been cleared.
