Bulk Oil Storage and Transportation (BOST) Company Limited, a State Owned Enterprise (BUMN), has been decided to be a beacon of corporate governance by Vice President Dr Mahamudu Bawumia due to its operational excellence and strategic growth to become a profitable company.
BOST, in 2017 was saddled with liabilities of $624 million, Inheritance loans of GHS284 million, Bulk Distribution Companies (BDCs) claims of $37 million, and Tax GRA of GHS47 million, making the company unattractive for a line of credit to stay in business.
The Vice President spoke at the commissioning of the new Head Office of BOST, saying that 30 percent of the company’s tanks have been decommissioned with three of the company’s 6 depots being non-operational.
“Four river barges are out of commission, all 361km of pipelines across the country are not working and 77km of 12-inch pipes sold at the US Exim facility have been held up in Houston for more than 10 years as a result of a contract dispute.
“There is a picture of the company thrown out. To complete this chaotic picture, the BOST account has not been audited for 3 years, so it is very difficult to determine the financial position of the company and no bank will give credit to a company that does not have an audited account”, he said.
Dr. Bawumia applauded the Board under the leadership of Mr. Ekow Hackman for the approval of the 5-year turnaround strategy from 2020 to 2024 prepared by the BOST management led by the Managing Director, Mr. Edwin Provencal to save the company from insolvency.
He added that “the strategy between the board and the management focused on improving operational excellence and growing the business aggressively seeks to make BOST profitable, ensuring the development and implementation of effective policies using all BOST assets and automating company processes and most importantly the beacon of corporate governance in the country.”
He said the implementation of the BOST strategy enabled the company to repair 13 out of 15 damaged tanks, all four river barges that were out of commission, all non-functioning pipes repaired and non-functioning pump meters. the loading machine was replaced at the BOST depot.
“The result is an increase in the utilization of assets produced by BOST from 34 percent in 2019 to the current level of 97 percent. That is extraordinary. The increase in BOST’s margin from 3 pesos to 6 pesos per liter in 2019 and then to 9 pesos per liter in 2020 has contributed significantly for the execution of the project,” he said.
Commenting on BOST’s operational efficiency, Vice President Dr Bawumia noted that the company has paid $611 million with internally generated funds, about $423 million of the debt position of $624 million owed to suppliers and related parties.
“I am happy to hear that the internal committee of BOST examined the claims of eight BDCs for products stored with BOST, losses from 2009 to 2014, amounting to $37 million and after the examination, the internal committee succeeded in reducing the figure to $11 million, resulting in savings of $26 million…This is worthy of imitation and worthy of congratulations,” he said.
He again stated that BOST, for the first time in 11 years made a profit of about GHS164 million, congratulating the board, management and staff for ensuring stewardship and prudent management of resources on behalf of the government and the people of Ghana.
Therefore, he called on other State Owned Enterprises to emulate the BOST blueprint so that they can contribute to the implementation of government policies.
“Imagine if 100 State Owned Enterprises make a profit of GHS164 million, that will be some GHS16 billion for the nation. This just shows that with good leadership and vision, state enterprises can be profitable. It only takes a few good men and women to make this happen and what happened at BOST,” he said.
Dr Mahamudu Bawumia however, commissioned the new $39 million BOST Head Office to mark the company’s 30-year milestone in finding a permanent location.
“Today marks an important milestone in the 30-year history of BOST, has transitioned from Diamond House through Heritage Towers to Roman Ridge, Airport Residential and Dzorwulu; finally, the company has found a permanent location,” he said.
The building was constructed around 2015 as part of a plan to ensure that BOST staff can work in a conducive environment.
On June 15, 2015, BOST engaged a construction company to design, build and finance the construction of the new Head Office building, a 7-story twin block with a total cost of $39 million, excluding VAT and all taxes.
This building should be completed in 24 months. This project that has changed from the previous government to this government has experienced many challenges.
Between 2016 and 2022, the project underwent a value-for-money audit, an EOCO audit, re-evaluation by an independent assessor, PPA ratification and evaluation for an updated scope. But despite all these challenges, the building was finally completed and commissioned.
Source: Peacefmonline.com
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