Bulk Oil Storage and Transportation (BOST) has said it paid off all its trade liabilities, amounting to $624 million, settled its local debt of $416 million and paid off 98 per cent of its debt to Bulk Distribution Companies (BDCs).
After an internal forensic audit conducted into the $37 million claim by BDCs, the amount was reduced to $11 million, saving the country a whopping $26 million, which would have gone into people’s pockets for no work done.
The State-owned strategic BOST, which in previous years recorded losses, made a remarkable turnaround when it recorded a net profit of GH₡168.8 million and GH₡342.5million in 2021 and 2022, respectively. The company is expected to make a net profit of over GH₡800 million this year (2023), more than the 2022 figure.
The Managing Director of BOST, Mr Edwin Alfred Provençal, who disclosed this in an interview, said the company’s turnaround strategy, aside from paying down all its debt through various interventions, brought back 12 of its 15 storage tanks, revamped its transmission pipelines and rehabilitated its tugboats and barges which has contributed to its revenue streams.
Mr Provençal said BOST’s infrastructure challenges, besides its financial challenges before 2017, showed that only 17 percent of its assets brought in revenue.
For instance, before 2017, BOST’s 15 out of the 51 tanks were decommissioned, pipelines from Tema to Akosombo and the Bolgatanga-Buipe pipelines were out of service, including the company’s marine facilities.
Fast forward to 2021, Mr Provençal, a management consultant, turned around the fortunes of BOST by repairing 12 out of the 15 tanks, fixing the pipelines, bringing in the pipelines procured and abandoned in Houston, USA, the barges all back on track and fixed the jetty.
In terms of BOST’s performance in the past, the Managing Director said apart from 2012 when the company made some profit between GH₡11 million and GH₡13 million, it had made losses until 2021, “when we made a profit of GH₡161 million and in 2022, we more than doubled it to GH₡342 million.”
Mr Provençal said pipelines that were procured in 2008 were abandoned in Houston until recently when they were brought in and assured that installation would soon begin and be completed in 24 months.
Responding to claims that BOST was making a profit before 2017, Mr Provençal said a look at the audited financial reports of the company before 2019 revealed a staggering financial trajectory.
“For instance, 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.”
An audited account by Price Waterhouse, an acclaimed accounting firm, showed that BOST in 2015, 2016 and 2017 made huge losses.
Mr Provençal said the claim that BOST was making a profit before 2017 was not accurate as the said claim was based on management reports submitted to the Finance Ministry that had not been audited by the Accountant General.
He explained that management reports are sent to the Ministry of Finance in October every year for budget preparation, “and that cannot be the end-of-year report, thus the need to rely on the auditor’s report to assess the performance.”
The truth of a company’s performance, according to him, is known when its books are audited, “but management accounts may not be considered entirely true.”
To the BOST M.D., the fact, as contained in the audited financial reports of the company, exposes the misinformation in the claim that the company, particularly in the past 11 years was making profits.
Rex Mainoo Yeboah, ISD
