AVRL: Extend The Contract

Aqua Vitens rand Limited, the Operator of Ghana’s urban water system, is recommending an extension of its management contract to enable it to complete the tasks set for it in 2006.

“We should be here longer, “AVRL says, advising against a progression to a lease contract which, it says the Ghanaian utility is not ready for at this stage of its development.

The recommendation was contained in an e-mailed written response to a questionnaire submitted to Rand Water Service Limited during a visit by the Times to its headquarters in Johannesburg.

The consortium has been managing the utility on behalf of Ghana Water Company Limited (GWCL) for upwards of three and-a-half years. Rand Water Service Pty is a partner with Vitens International B.V of Holland in the consortium, a partnership created for the purpose of bidding for the contract in 2004.

Its recommendation against managing Ghana’s urban water system under a lease contract is based on the fact that “the tariff regime (in Ghana) is not sufficient to attract a lease.”

Under the grand agreement signed with the World Bank, the government of Ghana may, if it finds significant improvement in the water supply system after the five years, decide to opt for a lease under which the lessor (the investor) brings in capital and operates the system for a period of time to recoup its investments. The management contract option was supported by the World Bank principally on the grounds that it would help improve the utility to enable it to attract private investors.

In categorical language, however, Rand Water, itself a public utility, says “we will not be interest in participating in a lease ourselves,” regarding its participation in Ghana’s water sector as “a corporate social responsibility project of our shareholders. We are not in Ghana motivated by profit.”

It made it clear, though, that “our role is to support whatever the government, through GWCL, chooses. But we will be ready to help attract bids or candidates for GWCL, it that (a lease) is the pat that they (the government and people of Ghana) wish to pursue.”
To the charge that it has under-performed, the Operator says, “The (public’s) expectations of the short-term impact of the management contract and the participation of AVRL in the water sector were not realistic,” to begin with.

To a comment by the Times that people still complain of water shortages and poor service three years into the Management Contract, its reply is that “the management contract was not meant to resolve all the water supply problems within five years. It was meant to address some of the fundamental concerns contributing to poor service, particularly that of insufficient investment.

Our role, then, is that of providing technical support and helping to restore the financial viability of GWCL so that GWCL can attract resources to invest in infrastructure.”

As to what have been the major successes of AVRL, the Operator cites its success at introducing modern and efficiency in the use of chemicals and electricity.

“We have also improved billings and revenue collection, and provided remarkable man-days of training for all categories of staff” the operator said, adding that, “we have brought a higher level of attention to the water sector on the part of political decision-makers, which is critical for addressing the service through a long-term, sustainable approach.”

The Times also sought to know the company’s greatest challenges. Hear the Operator: “Our biggest challenge has been the big backlog in maintenance and investment in the system. Insufficient town planning in the past is the bane.”

It also cites misunderstanding in the relationship between AVRL and GWCL as a key challenge stressing that “the public is never quite certain who is responsible a public relations problem”, assuring that both sides had been working hard to overcome the challenge.

The management contract comes to an end in 2011. Would the GWCL staff who were seconded to the operator to imbibe modern ideas in operations and management be ready to take over?

Its response to this is that “we believe when our contract expires in mid-2011, we will leave behind a highly enthusiastic staff who are open and willing to learn continuously, who will strive for higher performance and are deserving and capable of managing the operations.”

An Answer to this question also elicited a disclosure about a process put in place by the Operator to indigenize the top management of AVRL. Currently, the operator revealed, “there are five expatriates, two of whom will leave by the second quarter of 2010. They will be replaced by Ghanaian staff. In addition, a Ghanaian Chief Operating Officer is soon to be appointed at AVRL”.

What is the future of AVRL in the Ghana water systems? To this question by the times, the AVRL says “we are establishing a system tat takes the best from South Africa, Holland and, even more importantly, Ghana.”

Meanwhile, the World Bank says it is satisfied with the performance of AVRL. Speaking to the Times on phone from its Accra offices, Mrs Ventura Bengochea, the Bank’s lead Water and Sanitation Specialist, said AVRL had obviously operated against some odds.

Source: The Ghanaian Times/Ghana